TripAdvisor's (NASDAQ:TRIP) shares declined last week following the ambitious travel site operator's latest quarterly earnings report. The market didn't take kindly to the sharp decline in net profit, which was due to higher expenses.

But there is still much to like about the company and its stock. In this clip from the Motley Fool Money radio show, Chris Hill, Jason Moser, and Ron Gross talk about why TripAdvisor's new instant booking strategy is full of potential despite its short-term effect on the numbers analysts focus on, how the company has executed since its launch, and when its latest strategy might start to pay off.

A transcript follows the video.

This podcast was recorded on May 6, 2016. 

Chris Hill: Jason, you mentioned TripAdvisor. Expenses in the second quarter rose more than 13%. That hurt their profits, and that hurt their stock a little bit this week.

Jason Moser: Sure. Very good example, again, of one where analysts set out all these expectations based on zero guidance from TripAdvisor. We know how TripAdvisor, how Steven Kaufer is running this business. They're making this move to instant booking to make TripAdvisor not only the place where you get your information, but the place where you can book your hotels and your attractions and places you want to go after consuming all of that information. 

They are focusing on a four-phase plan here in this rollout. They gain hotelier and OTA, online travel agency, partner adoption in 2015. They've done that. They have a lot of hotels, and a relationship with Priceline on that instant-booking platform. Execute the global product launch, check. That's happened now. They're in the middle of really trying to perfect that experience and educate users that you can now actually go do that on TripAdvisor. You can book a hotel there. Then, after that, it's, "Hey, let's continue to delight our users, show them the capability, grow repeat purchases." That'll be something that happens a little bit further down the road. 

But, what this has all done, because there's a difference in the way the revenue is booked on TripAdvisor now -- it used to be something that was recognized whenever the click was made. But now, if you're booking something on instant booking, that revenue isn't recognized until the person actually makes the visit and stays at the hotel. So, it delays the revenue recognition a little bit out. And that's why the top line is slowing down here at the front half of the year. That will re-accelerate the back half of this year, and into 2017. 

Again, a great example of a business with a longer-term mindset. Again, there's nothing out there quite like TripAdvisor. They have such a great environment there of content, pictures, reviews, opinions, and a wonderful mobile presence as well. So, this is one we continue to be very enthusiastic about in Million Dollar Portfolio, especially.

Ron Gross: Did they have to go back and restate revenue, because they said they'd been doing it wrong, or was it just a change in policy for going forward?

Moser: It was a change in policy. When they decided to go ahead and roll out instant booking, it was something they were very clear with up front, saying, "We've been growing our top line 20% to 25% here these past five years. You're going to see, in the case of these next two years, the revenue is going to slow down considerably, because one, we're changing our tack and moving in a new direction. Two, it's delaying a lot of that revenue." 

So, a couple of things that will accelerate this: creating awareness that you can actually do this on TripAdvisor's platform; and then, as the timing catches up. And again, we should see more of that at the back half of this year, definitely into 2017.

Jason Moser owns shares of TripAdvisor. Ron Gross has no position in any stocks mentioned. Chris Hill has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Priceline Group and 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.