Trip Paris
Source: TripAdvisor.

Travel has always been a huge business, but now, things seem to be hotter than ever in the industry. Between the big recovery among airline companies and the strong U.S. economy and dollar, vacationers and business travelers alike are taking to the road, and TripAdvisor (NASDAQ:TRIP) has increasingly sought to cash in on the favorable trend. Going into its second-quarter financial report, which should be available Thursday afternoon, TripAdvisor shareholders particularly want to know whether a recently announced deal with Marriott could start to drive growth not just in revenue but also on the bottom line. Let's take a closer look at TripAdvisor to get up to speed on what's been happening with the travel specialist over the past quarter and what's ahead for the company.

Stats on TripAdvisor

Analyst EPS Estimate

$0.55

Change From Year-Ago EPS

0%

Revenue Estimate

$412.97 million

Change From Year-Ago Revenue

28%

Earnings Beats in Past 4 Quarters

0

Source: Yahoo! Finance.

TripAdvisor has an earnings monkey on its back
For such a fast-growing company when it comes to revenue, TripAdvisor earnings simply don't inspire that much excitement from investors. In recent months, projections for second-quarter earnings have fallen by more than 10%, and investors have reined in their views for the full 2015 and 2016 years modestly as well. Yet the stock has climbed almost 11% since mid-April.

TripAdvisor's first-quarter results showed the long trend that we've seen from the travel company, with excellent growth in revenue nevertheless failing to translate into healthier earnings. Revenue jumped 29% from the year-earlier quarter, which is particularly impressive when you consider that the strong dollar actually reduced that figure by seven percentage points. Sales climbed in all of its geographical segments, with particular strength in Latin America, where revenue came close to doubling.

Yet the news that has dominated TripAdvisor's attention in recent months came in mid-June, when the company said that it had gained access to the hotel portfolio of lodging giant Marriott International and had become an Instant Booking program partner. The stock soared 15% in response to the news, as investors were pleased to see a major player in the hotel space buy into TripAdvisor's concept of allowing mobile app users to book hotel rooms directly rather than going through third-party platforms.

The partnership threatens to change the way companies do business in the industry, with many of TripAdvisor's biggest competitors taking advantage of their status as an outside booking agent to reap higher profit margins. If TripAdvisor can demonstrate success with its approach, it could lure more hotel companies to join its ranks and eat away at its rivals' market share.

TripAdvisor has also put itself in a better strategic position to take advantage of rapidly changing conditions in the travel industry. Late last month, the company said that it had replaced its existing credit facility with a newer, larger one, adding $400 million to bring its total capacity under the facility to $1 billion. TripAdvisor said that it would use the facility for general corporate purposes, but CFO Julie Bradley noted that the move both "strengthens our liquidity profile and provides us with significant additional financial flexibility at attractive rates." Whether that includes a possible major acquisition remains to be seen, but consolidation throughout the industry could well demand that response from TripAdvisor eventually.

In the TripAdvisor earnings report, be sure to pay attention to how well the company does in the key European travel market. With the euro at its lowest level in years against the U.S. dollar, American tourists could flood the continent, and that could show up in TripAdvisor's numbers both this quarter and next. In addition, listen for news on the Marriott deal and any similar arrangements in TripAdvisor's pipeline, as good news on that front could drive growth for years to come -- both in revenue and in long-term earnings.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends TripAdvisor. The Motley Fool owns shares of TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.