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Why TripAdvisor Stock Fell Today

By Evan Niu, CFA – Jun 10, 2020 at 2:34PM

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The travel platform is optimistic that the travel industry will recover soon, but the sector remains under pressure from COVID-19.

What happened

Shares of TripAdvisor (TRIP -0.96%) have fallen today, down by 4% as of 2 p.m. EDT, after the company released the results of a study around the COVID-19 pandemic's impact on the travel industry. The research paper also describes five different stages of recovery for the sector.

So what

The stages are decline, plateau, emerge, domestic travel, and international travel. Certain markets, like New Zealand, Germany, and Switzerland, are entering the "emerge" stage, as searches for restaurants on the platform are starting to bounce back and 41% of consumers in those regions expect to take the same or more trips in 2020 compared to 2019.

A partition that says "Coronavirus travel restrictions"

Image source: Getty Images.

There is "significant pent-up consumer demand for travel," according to the report. TripAdvisor remains optimistic around the recovery, based on the data that it's seeing around search patterns on the platform and consumer surveys.

Now what

"We're encouraged to see positive signs of recovery and are here to help our travelers and partners understand the pathway through this pandemic with clear insights and tangible data," TripAdvisor chief commercial officer Kanika Soni said in a statement. "Our path to recovery will depend on the steps the industry takes to prepare for the road ahead -- not just in terms of new standards and practices but also in how we collectively educate and engage consumers in a new, more thoughtful way of traveling."

The coronavirus pandemic has changed the industry, and hospitality businesses will need to adapt to the new normal by prioritizing cleanliness and hygiene policies. Still, the industry is not out of the woods quite yet.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends TripAdvisor. The Motley Fool has a disclosure policy.

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