For a growth-oriented business, TripAdvisor (NASDAQ:TRIP) isn't seeing much growth. The vacation booking specialist just closed out a 2019 fiscal year that included 3% sales declines, marking the third time in the past five years that revenue has dropped from one year to the next.

TripAdvisor notched some important wins last year, including higher profitability and robust growth in new business lines outside of the core hotel booking business. In a conference call with investors, CEO Stephen Kaufer and his team discussed those successes while cautioning that the broader sales environment still looks challenging heading into fiscal 2020.

Couple walking to the airport with luggage

Image source: Getty Images.

Let's look at some highlights from that call with investors.

A tough competitive market

Hotel auction performance remains only partly within our control.
-- Kaufer

TripAdvisor's core hotel business depends on a steady stream of customer traffic from vacation shoppers using search engines, mainly Alphabet's Google. But the tech giant has decided in recent quarters to promote its own booking services over others' platforms. That pressure contributed to a 9% decline for TripAdvisor's main revenue stream in the fourth quarter and an 8% slump for the wider year.

Management was encouraged to see a slight moderation in declines in recent months, but noted that they don't expect selling conditions to improve much in 2020. On the bright side, TripAdvisor has made that business far more profitable, in part by reducing its least efficient marketing spending. As a result, segment operating margin reached 40% of sales last year compared to 33% in 2018 and 26% in 2017.

Bright spots

Our results demonstrate our ongoing disciplined approach to growth, investment, profitability, and capital allocation.
-- Kaufer

TripAdvisor highlighted several operating and strategic wins in 2019. These include robust user engagement, with over 400 million visitors to its platform each month during the year. This vibrant community provided a strong base for marketing the tech stock's own advertising while confirming that the company remains a leading force in the travel industry. "We repositioned our flagship brand ... to deepened customer engagement, which we believe will lead to increased monetization over time," Kaufer said. 

Other successes include the buildup of alternative revenue streams from restaurant and experience bookings, growth-focused partnerships and acquisitions, and cost cuts that delivered higher profitability and cash flow.

Looking ahead

In 2020, we intend to diversify revenue growth, contain costs, and deploy our significant free cash flow in attractive ways.
-- Kaufer

TripAdvisor's initial 2020 outlook didn't give investors much optimism to hold on to if they're hoping for concrete signs of a growth rebound. The company sees poor search engine trends continuing to hurt sales in the first quarter, although results should improve in the second half of the year. The experience booking segment should grow quickly, but those gains won't deliver robust earnings improvements. In fact, TripAdvisor believes adjusted profits will likely be flat for the full year.

Executives say they're optimistic about their long-term growth prospects, given the large audience and significant influence the company has on the travel industry. Still, the results of the past few years show that TripAdvisor hasn't yet found a way to use those assets to build a steadily growing business.