Tripadvisor Inc (TRIP), Expedia Inc (EXPE) and Orbitz Worldwide, Inc. (OWW), And The Rest Of Travel’s Underrated Plays

Compared to the mega online travel agent Priceline, the smaller players in the space are managing to hold their own. As we review how they fared during the previous quarter, it is interesting to also take a look at the steps they have taken to improve their positions – some of which are paying off, while others…well, not so much.

Tripadvisor Inc (NASDAQ:TRIP), Expedia Inc (NASDAQ:EXPE) and Orbitz Worldwide, Inc. (NYSE:OWW) have been reporting their first quarter earnings for the past few weeks. They managed to beat estimates on their top and/or bottom lines, even though the first quarter is typically slow for the travel and vacation industry. They also managed to hold their own despite the challenges of facing the much-larger Priceline.

Let’s start with Tripadvisor Inc (NASDAQ:TRIP). Its revenues came in at roughly $230 million for the last quarter, while analysts had expected about $225 million. Its earnings per share were $0.39, which was 23% higher than they were for the same quarter last year. They were also higher than the $0.35 analysts had estimated. Cash flow from operations improved 47% to roughly $44 million, or 19% of revenue.

The driving force behind Tripadvisor Inc (NASDAQ:TRIP)’s increase was click-based advertising. Revenue from this source totaled about $180 million. Still, however, this revenue source accounted for less of the company’s total revenue this year than it did last. For the first quarter of 2013, it accounted for 78% of total revenue, compared to 79% in the first quarter of 2012.

Naturally, we don’t want to see a company’s main revenue source decline as a percentage of total revenues, especially if its other revenue sources aren’t doing that well either.

One tool that is helping Tripadvisor Inc (NASDAQ:TRIP)’s growth is Facebook. Tripadvisor Inc (NASDAQ:TRIP) reported that it averaged more than 33 million monthly Facebook visitors to its own website and Facebook app last quarter. The arrangement has been so successful that AppData said Tripadvisor Inc (NASDAQ:TRIP) is the top travel app on the social networking site.

Another factor that can help TripAdvisor’s future growth relates to Samsung. It has inked an exclusive agreement with the handset maker to pre-install its mobile app on to the new Galaxy S4. Also, Samsung is using TripAdvisor’s user content to power several travel functions on the smartphone. Scoring this deal with Samsung is a coup especially if it is as good of a seller as earlier generation Galaxy smartphones.