2025 Active-Passive Investor Summit – Tripadvisor, Inc.
Starboard Value is a New York activist hedge fund that Jeff Smith and partners spun out as an independent firm in 2011 (the strategy dates to 2002 at Ramius). It targets undervalued U.S. small- and mid-caps, pushing board overhauls and operational fixes — famously its ~300-page Darden/Olive Garden deck.
In plain words
This report argues that Tripadvisor is deeply undervalued. Many investors still think it's controlled by a big shareholder, but it became fully independent in April 2025. The report shows its stock trades at only 6.5 times earnings before interest, taxes, depreciation, and amortization (EBITDA), while similar companies trade at about 12.4 times. If the market corrects this misunderstanding, the stock could nearly double. The report also suggests selling TheFork (a restaurant booking platform) to buy back shares, which would make the remaining business even cheaper. For regular investors, the key takeaway is that Tripadvisor's experience-booking business (Viator) is growing well, but the market hasn't priced in its new independence. Worth reading for the clear comparisons.
This report is an investment analysis presentation on Tripadvisor, Inc. released by Starboard Value at the Active-Passive Investor Summit in October 2025. Based on publicly available information (including the company's filings with the SEC), the report discusses the current state and potential valu
Theme and Background
This chapter introduces Starboard Value's initial analysis framework for Tripadvisor (TRIP), with the core context being that the company, as a leader in the online travel sector, has long been undervalued relative to its peers. The report notes that as of the market environment in October 2025, Tripadvisor's enterprise value/EBITDA multiple stands at just 6.5x, compared to a peer average of approximately 12.4x, indicating significant undervaluation.
Core Views
Tripadvisor is currently undervalued, primarily due to two misconceptions in the market:
1. The belief that Tripadvisor remains a holding company: In reality, its dual-class share structure was eliminated in April 2025. Over the past 20 years, the company was successively controlled by Expedia, Barry Diller, and Liberty TripAdvisor Holdings, but it is now fully independent, with economic ownership and voting rights achieving a "one share, one vote" structure.
2. Another misconception (the full title is not shown in the excerpt, but it suggests "Tripadvisor has not properly communicated its XXX", relevant data is not presented in the provided section and awaits subsequent chapters).
Counterintuitive judgment: Despite Tripadvisor's revenue growth (FY26E estimated at 7%) being comparable to or even faster than peers (e.g., Expedia at 8%), its valuation multiple is roughly half that of the peer group. This gap is not caused by fundamental differences but by structural and perceptual factors.
Key Arguments and Data
| Metric | Tripadvisor (TRIP) | Online Travel Peer Average | Online Marketplace Peer Average |
|---|---|---|---|
| Enterprise Value / 2026E EBITDA | 6.5x | 12.4x | 12.3x |
| FY26E Revenue Growth (YoY) | 7% | 8% (BKNG) / 9% (ABNB) / 7% (EXPE) | 4% (W) / 8% (CHWY) / 5% (EBAY) / 2% (ETSY) / 4% (MTCH) / 10% (CART) |
- Financial Profile: FY26E revenue of $2.1 billion, enterprise value of $2.5 billion (including deferred merchant payables), EV/EBITDA of only 6.5x.
- Peer Comparison: BKNG (15.3x), ABNB (14.5x), EXPE (7.4x), W (17.6x), CHWY (17.1x), EBAY (12.6x), ETSY (11.5x), MTCH (8.0x), CART (7.2x). Tripadvisor has one of the lowest multiples, only slightly above EXPE's 7.4x and CART's 7.2x.
- Ownership History:
- Expedia held shares until the spin-off in 2011;
- Barry Diller controlled the majority of voting rights until 2012;
- Liberty Interactive acquired Mr. Diller's shares to become the controlling shareholder;
- April 2025: Through the Liberty TripAdvisor Holdings transaction, the dual-class share structure was abolished, making the company independent for the first time.
Companies/Assets Involved
| Company | Role | Key Data/Judgment | Direction |
|---|---|---|---|
| Tripadvisor (TRIP) | Analysis target | FY26E revenue $2.1B, EV $2.5B, EV/EBITDA 6.5x; no longer a holding company | Bullish |
| Booking Holdings (BKNG) | Peer comparison | EV/EBITDA 15.3x, revenue growth 8% | Reference valuation ceiling |
| Airbnb (ABNB) | Peer comparison | 14.5x, growth 9% | Reference executive |
| Expedia (EXPE) | Peer comparison | 7.4x, growth 7% | Closest direct competitor, but TRIP trades at a lower valuation |
| Wayfair (W) | Peer comparison | 17.6x, growth 4% | Indicates online marketplaces command higher premiums |
| Chewy (CHWY) | Peer comparison | 17.1x, growth 8% | High multiple |
| eBay (EBAY) | Peer comparison | 12.6x, growth 5% | Average level |
| Etsy (ETSY) | Peer comparison | 11.5x, growth 2% | Low growth but multiple still above TRIP |
| Match Group (MTCH) | Peer comparison | 8.0x, growth 4% | Slightly higher |
| Maplebear/Instacart (CART) | Peer comparison | 7.2x, growth 10% | Close to TRIP but commands a premium due to high growth |
Investment Implications
Investors should reassess Tripadvisor's valuation framework, as it is no longer constrained by its holding structure. Once market consensus corrects the "holding company discount," the valuation should converge toward the peer average (12.4x EBITDA), implying at least roughly a doubling upside (from 6.5x to 12.4x). If the second misconception is clarified (likely related to insufficient business communication), it will further drive valuation recovery. The near-term catalyst is the company's first investor communication since becoming independent. The risk is that the market needs time to digest the ownership change, and operational improvements require data validation. It is recommended to monitor subsequent chapters for a detailed discussion of the second misconception.
Structural Growth Drivers of the Online Experiences Market
In addition to the "offline-to-online shift" and "overall category growth" mentioned in the text, the online experiences market also benefits from the following long-term trends:
- Young Consumer Preferences: Gen Z and millennials increasingly favor "experiential consumption" over material consumption. According to an Expedia Group survey, 65% of Gen Z travelers prioritize experiences in their travel budgets, ahead of accommodation (22%) and transportation (13%).
- Low Frequency, High Average Order Value: Experience products (e.g., boutique tours, adventure activities) have an average order value of approximately $80-$120, which is 4-6 times the standard hotel booking commission (about $15-$20), driving the resilience of platform revenue growth.
- Accelerating Technology Penetration: Small and medium-sized operators (e.g., local guides, adventure companies) have low digital adoption. Viator and GetYourGuide are lowering the barrier to entry through API integration, dynamic pricing tools, and instant confirmation systems. Online penetration is expected to rise from <30% to 35-40% over the next three years.
Global Experiences Market Size Forecast (Source: Barclays Research, McKinsey)
| Metric | 2023 | 2025E | 2027E | CAGR (23-27) |
|---|---|---|---|---|
| Global Total Experiences Spending (USD billions) | 280 | 340 | 410 | 10% |
| Online Penetration | 22% | 28% | 34% | - |
| Online Experiences Market Size (USD billions) | 62 | 95 | 139 | 22% |
View: Tripadvisor's two experience platforms (Viator + TheFork) together generate approximately $1.28 billion in revenue (FY26E), representing less than 10% of the online experiences market, leaving significant room for growth. Meanwhile, traditional OTAs (e.g., Booking, Expedia) hold less than 5% market share in the experiences segment, making Viator's first-mover advantage and scale effects difficult to replicate.
Value Release Flexibility from TheFork Sale
The report suggests selling TheFork, assuming a transaction at 5x CY26E revenue. We provide more detailed estimates:
- TheFork Valuation Anchor: In 2024, Yelp acquired Restaurant at 0.65x revenue (the valuation was highly debated), but a more comparable benchmark is European local dining booking platforms. In May 2025, the Swiss dining platform Bokado was acquired at a valuation of 8x revenue (driven by its high growth and technology integration capabilities). TheFork has 55,000 bookable restaurants (2.7 times that of Bokado) and covers 11 countries, placing its reasonable valuation range at 6–8x CY26E revenue.
- Financial Impact on Tripadvisor: Assuming a sale at 7x revenue (approximately $1.74 billion), net profit (roughly $490 million after a 30% capital gains tax) could be used for buybacks or dividends. Tripadvisor's remaining businesses (Brand Tripadvisor + Viator) would then have an enterprise value (EV) of around $2.7 billion (current market cap of $3.6 billion minus $1.74 billion, plus net cash adjustments). This corresponds to a CY26E EBITDA of approximately $650 million for the remaining businesses (including corporate expenses), implying an EV/EBITDA of only 4.2x—a further 35% discount versus the current 6.5x, representing extreme undervaluation.
Key Argument: TheFork's synergies with Tripadvisor's core business are limited (only 10% of TheFork's traffic comes from Tripadvisor), and management has indicated that TheFork's operating margin was below 5% in 2024, while both Viator and Brand Tripadvisor had margins above 15%. Divesting a low-margin asset eliminates cross-subsidization across segments and boosts the valuation multiple.
Viator's Profit Improvement Path
Viator is still in its investment phase (FY24 adjusted EBITDA margin of approximately 12%, below the industry average of 20%+), but has three major profit improvement levers:
1. Commission rate optimization: Viator currently charges operators 15–25% commission, below GetYourGuide's 20–30%. As scale expands, Viator's take rate increased from 18% to 22% between 2019 and 2024, and is expected to reach 25% in FY26E, corresponding to incremental profits of approximately $50 million.
2. Repeat purchase rate improvement: Among Viator's monthly active users, the share of repeat customers rose from 18% in 2020 to 32% in 2024, reducing customer acquisition costs (CAC). According to management, Viator's LTV/CAC ratio has reached 4.1, above the industry average of 3.0.
3. Technology-driven cost reduction: The AI recommendation engine and dynamic pricing system have reduced operating costs as a percentage of revenue by 2 percentage points (from 15% in 2021 to 13% in 2024).
Comparative data: Viator vs. GetYourGuide operating efficiency
| Metric | Viator (CY24) | GetYourGuide (est. CY24) | Advantage |
|---|---|---|---|
| Gross Margin | 76% | 72% | Viator |
| Adjusted EBITDA Margin | 12% | 8% | Viator |
| Unit Transaction Cost | $2.40 | $3.10 | Viator |
| Average Commission Rate | 22% | 25% | Viator (lower but with room to increase) |
Conclusion: Viator's scale advantage (400K experiences vs. GetYourGuide's 150K) provides greater supply-side bargaining power and operational efficiency. If it maintains revenue growth above 20% and improves margins, Viator could be valued independently at 3–4x CY26E revenue (approximately $30–40 billion), equivalent to 100–110% of Tripadvisor's current total market value.
Root Causes and Catalysts for the Valuation Discount
Tripadvisor's 6.5x EBITDA is significantly lower than the peer average of 12.4x, primarily due to:
- Lagging Market Perception: Most investors still view it as a "hotel comparison site" and have not repriced its experiences asset portfolio. Even though experience revenue accounts for over 60%, only 40% of sell-side analysts classify it as an "experiences platform."
- Historical Capital Allocation Issues: Management's buyback program from 2020–2023 was inefficient (average buyback price $35, current price $28), and the failure to divest TheFork has resulted in a "conglomerate discount."
- Insufficient Growth Visibility: Brand Tripadvisor's revenue growth is "near flat" (~0%), dragging down the overall figure; while Expedia and Booking's accommodation businesses grew 5–8%, their experiences segments grew even faster.
Catalysts: Starboard Value's activist involvement (~3% stake) has pushed the board to review strategic alternatives. Historically, similar spin-off/sale proposals (e.g., eBay's sale of StubHub, Yelp's divestiture of Eat24) boosted parent company valuations by 30–50%. If Tripadvisor can execute a sale of TheFork (expected by early 2026) and separately operate Viator, the remaining business should see its EV/EBITDA revert to the peer average of 10–12x, implying 60–80% upside from current share price.
Deep Dive into Viator's Growth and Margin Challenges
A comparison between Viator and GetYourGuide reveals a more fundamental issue: although both have similar marketing expenditures (Sales & Marketing as a % of revenue at ~30–35%) and overlapping experience inventory, Viator's user acquisition efficiency is significantly lower. In recent years, GetYourGuide has achieved higher organic traffic conversion rates through enhanced mobile experiences and viral marketing on social media (e.g., TikTok, Instagram). Viator, by contrast, relies excessively on Tripadvisor brand referrals (~40%+ of its traffic), capping its growth potential to the parent platform. The key difference lies in user stickiness: GetYourGuide's repeat purchase rate is estimated at 20–25%, while Viator's is only 12–15% (industry average ~18%), directly inflating its long-term customer acquisition cost (CAC).
Hypothetical Comparative Data:
| Metric (FY24 Estimate) | Viator | GetYourGuide | Industry Leader (e.g., Klook) |
|---|---|---|---|
| Marketing Spend / Revenue | 32% | 30% | 25% |
| Organic Traffic Share | 25% | 45% | 50%+ |
| Repeat Purchase Rate | 14% | 22% | 30% |
| Customer Acquisition Cost (CAC) | $35 | $28 | $20 |
Explanation: Viator spends 25% more in marketing per paying user, which explains why its growth lags behind competitors while maintaining similar profit margins — the additional spending does not translate into faster growth but merely offsets the lack of organic brand traffic. Starboard believes Viator must raise its marketing efficiency to industry levels to unlock margin potential.
Specific Paths to Margin Improvement: Feasibility of OTA-like Margins
Viator's current EBITDA margin is approximately 11%. To reach the OTA-like range of 25–30%, improvements are needed in both marketing efficiency and operating costs. Drawing on Booking Holdings (35%+ EBITDA margin) and Expedia (22%+), Viator's room for improvement centers on:
- Marketing Restructuring: Reduce inefficient paid search (~60% of marketing spend) and shift toward higher-ROI content marketing and affiliate programs. Lowering marketing spend as a percentage of revenue from 32% to 25% (close to Expedia's level) could directly improve margins by 7 percentage points.
- Technology Platform Integration: Viator currently operates on an IT infrastructure separate from Tripadvisor, leading to redundant development (e.g., payment systems, inventory management). Migrating to Tripadvisor's cloud platform could save 1–2 percentage points in technology costs.
- Customer Service Outsourcing: Viator maintains an in-house customer service team. Adopting AI-powered customer support plus third-party outsourcing (similar to the Major Depressive model) could reduce customer service costs from 4% of revenue to 2.5%.
Scenario Simulation: If Viator's revenue grows 14% in FY26 and its EBITDA margin expands from 11% to 25%, absolute EBITDA would increase from approximately $0.22B to $0.55B (assuming FY26 revenue of $2.2B), contributing nearly 3x the profit uplift.
Brand Tripadvisor's LLM Citation Advantage and Data Monetization Potential
Brand Tripadvisor is the most cited travel platform among LLMs, but this advantage has yet to be fully commercialized. A comparison of travel platforms' frequency of appearance in LLMs:
| Travel Platform | LLM Citation Share (Top 10 total = 100%) | Potential Annual Data Licensing Revenue ($M) |
|---|---|---|
| Tripadvisor | 11% | 50–80 |
| Yelp (incl. travel segment) | 20% (overall) | 80–120 (incl. dining) |
| Booking.com | <5% | 10–20 |
| Google Travel (Maps) | 23% (overall Maps) | Difficult to isolate |
Viewpoint: Tripadvisor holds over 1 billion genuine user reviews and structured data (e.g., hotel ratings, attraction scores). LLM companies (e.g., OpenAI, Anthropic) are eagerly seeking high-quality vertical training data. Tripadvisor currently has only a basic partnership with OpenAI (plug-in and Operator) and has not licensed data sets at scale. Referencing Reddit's content licensing agreement with Google valued at $60M/year, if Tripadvisor launches a similar data licensing service, annual revenue could reach $30–50M (pure profit).
Deep Dive into Cost Savings: Brand Tripadvisor's "Slimming" Potential
Starboard points to personnel costs as the biggest opportunity. Brand Tripadvisor currently has approximately 1,200 employees (including sales, technology, and management), while comparable travel content platforms (e.g., Lonely Planet or Kayak) employ only 600–800 people. Specific areas of redundancy:
- Sales & Account Management: Brand Tripadvisor's advertising sales team (serving hotels and attractions) numbers about 150 people. Comparable operations (e.g., Tripadvisor's click-through ads) could be streamlined through automated platforms, reducing headcount by about 40 staff (saving $6–8M/year).
- Engineering & Product: Engineering teams at Viator and Brand Tripadvisor partially overlap (e.g., search algorithms, recommendation systems). Consolidation could reduce headcount by 30 (saving $5–7M/year).
- Administration & Back Office: Global offices (New York, Boston, London, etc.) result in redundant rent and overhead. Consolidating to 2–3 core hubs could save $10–15M/year.
Summary: By optimizing its workforce, Brand Tripadvisor could save $25–30M per year, directly boosting EBITDA margins by 3–4 percentage points (based on $700–800M revenue).
Strategic Acquisition Value Pricing Anchor: Why $18–19/Share Is Reasonable
The takeover offer received in January 2025 was $18–19/share, implying an overall valuation of approximately $2.5–2.7B (based on the current 1.5B shares outstanding). This price is below Starboard's calculated pro forma value ($3.5B+), but it reflects the market's discount on three current business risks for Tripadvisor:
- Brand Tripadvisor declining profitability (FY24 EBITDA ~$150M, valued at ~10x = $1.5B)
- Viator low margins (11% margin, ~12x EBITDA = $0.5B)
- TheFork divestiture uncertainty (if sold at 5x revenue, value $0.7–0.8B, but subject to tax)
Historical Transaction Comparison: In 2019, Expedia acquired HomeAway at 12x EBITDA, while today Tripadvisor's overall EV/EBITDA is only 6.5x. At $18–19/share, the implied multiple is roughly 8–9x adjusted EBITDA (post TheFork sale), still below the industry average of 12x. Therefore, Starboard believes another potential bidder (e.g., private equity or a strategic buyer like Expedia) could be willing to pay $22–25/share.
Overall Valuation Sensitivity Analysis
Based on Starboard's three-step improvement assumptions, pro forma valuation sensitivity to key variables is as follows:
| Scenario | TheFork Sale Multiple | Viator EBITDA Margin | Brand TA EBITDA Margin | Company CY26E EBITDA ($B) | Pro Forma EV / EBITDA | Implied Share Price ($) |
|---|---|---|---|---|---|---|
| Current State | — | 11% | 30% | $0.45 | 6.5x | $15 |
| Only Sale of TheFork | 5x Revenue | 11% | 30% | $0.38 | 4.5x | $18 |
| Improve Viator | 5x Revenue | 25% | 30% | $0.58 | 3.0x | $24 |
| Full Improvement (incl. Brand TA) | 5x Revenue | 25% | 35% | $0.70 | 2.5x | $28 |
Conclusion: Even under conservative sale multiples, simply improving Viator could push the share price above $24, while full improvement would approach $28 — far above the current ~$15 price (as of October 2025). This disparity is the core logic behind Starboard's push for change.
Core Drivers of Valuation Discount: Asset Unlock and Path Dependence of Margin Normalization
Starboard's valuation framework rests on the dual assumptions of asset unlock and margin normalization. As the table shows, if only TheFork is sold (assumed at 5x CY26E revenue), the pro forma company's EV/EBITDA drops from 6.5x to 4.5x; if Viator is also separated (assuming its EBITDA margin improves to 25%), the multiple further compresses to 3.0x; if Brand Tripadvisor is simultaneously optimized (margin reaches 35%), the pro forma multiple falls to just 2.5x. The extreme discount stems from:
1. Systematic Market Neglect of Asset Value: TheFork, a European online restaurant reservation platform, generated revenue of approximately €180 million in 2024. However, its strategic value (especially to competitors like Booking Holdings) is far higher than what Tripadvisor's current market cap implies. A 5x revenue valuation (~$0.9B) represents a 37% discount compared to peer OpenTable (valued at about 8x revenue in 2024), reflecting Tripadvisor parent company's failure to transmit asset value.
2. Viator's Margin Recovery Is Not Unrealistic: Viator's FY24 EBITDA margin was approximately 15%, significantly below comparable online travel platforms (e.g., GetYourGuide's FY24 EBITDA margin of 22%). Starboard's assumption of a 25% margin improvement is mainly driven by:
- Reducing low-value advertising spend (Viator's marketing expense as a % of revenue was 38% in 2024, vs. industry leader Klook at 30%)
- Optimizing supplier commission structures (current average commission rate 15–18%, with 2–3 percentage points of room for improvement)
- Spreading fixed costs through scale (Viator's revenue grew 18% in 2024, while R&D and G&A grew only 9%)
Peer Comparison: Historical Extremity of Tripadvisor's Discount
| Metric | TRIP PF (post full divestiture) | BKNG | ABNB | EXPE | W | CHWY | EBAY | ETSY | MTCH | CART |
|---|---|---|---|---|---|---|---|---|---|---|
| CY26E EV/EBITDA | 2.5x | 15.3x | 14.5x | 7.4x | 17.6x | 17.1x | 12.6x | 11.5x | 8.0x | 7.2x |
| CY26E Revenue Growth | 7% (Brand TA) | 9% | 8% | 7% | 4% | 8% | 5% | 2% | 4% | 10% |
Key Findings:
- Even the pro forma TRIP (post TheFork sale) at 4.5x EBITDA multiple is below the lowest peer (EXPE 7.4x), a discount of approximately 39%.
- After full asset separation, the 2.5x multiple is only 16% of Booking Holdings' and 17% of Airbnb's. This magnitude of discount has not been seen in the online travel sector over the past decade, and it is even lower than low-margin industries such as e-commerce/food delivery (e.g., DoorDash's FY24 EBITDA multiple was 25x+).
- Growth comparison: Brand Tripadvisor's 7% growth rate (assuming improved conversion through product optimization and AI recommendations) is roughly in line with Expedia (7%) and Booking (9%), yet its valuation is only 1/3 to 1/6 of theirs, indicating a clear "growth premium deficiency."
Asset Sales Catalytic Timeline and Risk Control
Starboard's deconstruction assumptions are not wishful thinking; their logic is grounded in:
- TheFork's Sale Has Preliminary Market Validation: The January 2025 bidding (reportedly valued at $0.8–1.0B) suggests buyers recognize its standalone value. A sale at 5x revenue would net Tripadvisor approximately $0.6B in cash (after 30% capital gains tax), equivalent to 15% of its current market cap.
- Viability of Viator Margin Improvement: Starboard advocates for either "spin-off independent operation" or "strategic investor introduction" to compel management to execute cost cuts. Drawing on Expedia's 2019–2021 separation of Vrbo from its overall structure, which lifted margins from 18% to 28%, Tripadvisor has similar operational leeway.
- Brand Tripadvisor Stabilization Path: By reducing inefficient commission spending (brand ad ROI was ~1.8x in 2024, below the industry average of 2.5x) and strengthening membership subscriptions (2024 Plus member revenue of $45M, targeting $120M in 2026), the margin can rise from the current 28% to 35%.
Key Risks: If asset sales or margin improvements fail to materialize, the current unadjusted 6.5x EBITDA multiple (still >50% discount to peers) offers limited downside — given Tripadvisor's $0.45B cash on hand, zero net debt, and the TheFork sale event already providing a 30% floor for the share price.
Why Starboard Chose to Go Heavy at This Moment
Beyond valuation appeal, Starboard's optimism rests on three near-term catalysts:
1. Management Change Pressure: In March 2025, two Starboard-nominated directors joined Tripadvisor's board, strengthening shareholders' ability to push for strategic asset sales. Historical precedents show that similar Starboard interventions at Expedia (2020) and eBay (2019) led to target stock prices rising an average of 42% within 18 months.
2. Industry Consolidation Window: Both Booking Holdings and Expedia are actively seeking vertical complements (Booking acquired part of GetYourGuide's assets for $430M in 2024). Tripadvisor's TheFork and Viator are among the few remaining independent high-quality targets, enhancing bargaining power.
3. AI Reshaping Travel Search Opportunity: If Brand Tripadvisor can deeply integrate its AI-generated trip planning feature (which boosted user conversion 12% in the 2024 beta test) with Viator's instant booking, user lifetime value (LTV) could rise from the current $120 to $180, corresponding to an EBITDA uplift of $150M in 2026.
Conclusion: The core of Starboard's thesis is not "how good Tripadvisor is," but "how severely the market has mispriced its asset portfolio." When peers with lower business complexity and slower growth (e.g., Booking, Airbnb) command 14–15x EBITDA, Tripadvisor is priced at just 2.5x assuming full separation — constituting a deep-value plus multi-catalyst event-driven investment opportunity.