Tripadvisor recorded a $369.5 million writedown on its legacy hotels and advertising business in the third quarter, and its CFO said on the earnings call that SEO will still be a headwind to growth in 2027.
The non-cash goodwill impairment hit the Hotels and Other segment, which includes hotel metasearch and media advertising, according to the company’s third-quarter earnings release. The release says it was driven largely by traffic headwinds that have accelerated over several periods because of “changes in the search landscape.” Segment revenue fell 23% to $151.6 million for the quarter.
During the call, analyst Ross Sandler at Barclays wanted to know how close Tripadvisor’s core brand is to Google Zero, a term used to describe a website receiving zero organic traffic via Google. In response, CFO Mike Noonan said Tripadvisor’s SEO exposure is in the “mid to high teens,” down meaningfully versus a year ago, but did not provide specifics on what total it is a percentage of.
Marketing is also taking a larger share of revenue, which Tripadvisor ties to its move from free search traffic to paid channels.
What Tripadvisor Said When Asked About Google Zero
Sandler suggested Viator, Tripadvisor’s experiences booking site, has little SEO exposure. Noonan agreed and said the exposure comes mostly through the legacy Tripadvisor brand.
SEO will still be a headwind in 2027, Noonan said, and he expects it to start to ease based on current trends in the channel. He said the eventual tailwind to growth would come when the company can “mechanically get out of that headwind.”
In August, he estimated the SEO drag on the Experiences segment at approximately 5 percentage points of bookings growth. He said in the second-quarter prepared remarks that the drag continues to moderate “as SEO becomes a smaller share of overall bookings mix.” In the third-quarter remarks, he put it at an approximate 3% growth headwind to segment bookings.
Experiences bookings grew 2% in the quarter. Bookings on Viator rose 4%, while bookings through Tripadvisor’s own site fell by a low-teens percentage.
Marketing Costs And The Move To Paid Channels
Marketing took 48.8% of Tripadvisor’s revenue from continuing operations in the third quarter, up from 43.3% a year earlier. Those figures exclude TheFork, which Tripadvisor has sold. Spending was roughly flat in dollars at $213.0 million while revenue fell 11% to $436.4 million.
Noonan attributed the increase to an ongoing move from free to paid channels caused by persistent SEO headwinds, mostly in Hotels and Other and on Tripadvisor’s own site.
He said the SEM channel saw a decline in available clicks in August, which coincided with a planned move of spend to newer, less scaled paid channels. On the call, he suggested some of that decline could be tied to macroeconomic conditions.
CEO Matt Goldberg said SEM has been Tripadvisor’s largest marketing channel and that “the auctions have certainly become more competitive,” with some SEM spend now less efficient. Noonan described Viator’s paid search efficiency as decent year over year.
In August, the CEO said the company was finding ways to spread spending beyond paid search as more travelers find experiences on social and other mid-funnel channels.
What Tripadvisor Says About AI Citations
In the prepared remarks, Goldberg said Viator is working with a number of AI platforms (including Anthropic, OpenAI, Gemini and Meta Muse) and that volume is low. He added that MCP partner integrations produce conversions to bookings at better-than-average rates as well as higher booking values, and that Tripadvisor’s brands “lead in share of citations for experiences prompts,” but did not provide information on the call about the way this share was calculated.
On the call, he said AI is probably under 1% of Tripadvisor’s overall traffic but is ramping. He thinks AI traffic converts at close to five times the average on Viator and about twice the average on Tripadvisor.
According to Goldberg, unique contributors have held stable or declined only slightly so far this year, despite double-digit drops in traffic. In his view, hotel and online travel agency partners, along with LLMs, value the content these contributors create as leads, licensed content, or AEO citations.
Why This Matters
Tripadvisor has said it is seeing less of an SEO drag on bookings now that SEO represents a smaller portion of its overall business. Marketing represented approximately 5.5 percentage points more of revenue in the third quarter compared to the same period last year, which the company attributes to the transition from free to paid channels.
In May I posted that Condé Nast’s CEO was instructing his teams to plan for zero search traffic. On Oct. 29, Reddit announced that its search referrals declined by over 1 million per week on average in October. Tripadvisor has added its CFO’s prediction that the SEO headwind will continue into 2027, along with a marketing metric a planning team can use to compare internally.
Looking Ahead
Goldberg will continue as CEO until the middle of February while the board works with a search firm to identify his replacement, and CFO Mike Noonan will leave at the end of the year. Kristen Dalton, head of strategy and operations for Tripadvisor, will become interim CFO effective Jan. 1. Tripadvisor said its portfolio review, which includes consideration of strategic alternatives, continues.
Tripadvisor estimates Experiences’ adjusted EBITDA in the fourth quarter to be approximately break-even, while continuing to invest in newer paid channels. In each of its Q2 and Q3 comments, the company cited an estimate of the SEO impact to Experiences. A third estimate in the next report would show whether the drag is still shrinking from about 3%.
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