The first victim emerges in the AI upheaval | Insights from Tripadvisor's earnings report

Asking AI · How AI Search Transformation Disrupts Traditional Travel Metasearch Business Models?

Hotel Metasearch Transitions from Bottoming Out to Downward Trend

*This article is a submission from a commentator and does not represent the stance of Global Travel News.

The biggest core signal from Tripadvisor’s Q4 2025 earnings report is not only that performance fell short of expectations, but also that the previously believed dormant downward trend in the accommodation business has been disrupted once again.

Tripadvisor delivered a Q4 financial report that deteriorated beyond expectations in 2025. Compared to an annual adjusted EBITDA margin of 17%, the Q4 margin was only 11%, with an adjusted EBITDA of $45 million in Q4, marking a 38% year-over-year decline.

The main source of this deterioration comes from the hotel metasearch core business. Tripadvisor’s hotel revenue for the entire year of 2025 declined by 8%, with the Q4 decline widening to 15%. Management’s guidance for Q1 2026 is even more pessimistic, expecting a further drop of 21% to 23%.

The market’s initial assumption was that the decline in hotel revenue had already reflected the impact of OTAs reducing their investment in metasearch, and that subsequent declines would level off; however, the actual Q4 data shows that this assumption has not held true.

The Second Impact of Metasearch

Over the past two years, the market has largely interpreted the decline of hotel metasearch as OTAs reducing their investment and shifting to proprietary channels to improve ROI, a phenomenon known as “de-Metafication.” However, as we entered the second half of 2025, another force began to emerge—the changing structure of search traffic.

From this perspective, Tripadvisor can be seen as one of the earliest targets reflecting the pressures of changing search structures and AI developments.

The company explicitly mentioned in its earnings report that as search patterns change and AI Overviews rise, its website traffic continues to decline, including traffic from SEO. At the same time, the company repeatedly emphasized that by the end of 2026, the share of experience business revenue from SEO will drop below 10%.

This statement itself carries indicative significance: SEO was once a low-cost, high-efficiency source of traffic, and when the company begins to actively downplay its importance, it is effectively admitting that this channel is no longer reliable.

Crucially, considering the guidance that hotel and other revenues are expected to decline by another 21% to 23% in Q1 2026, this figure is significantly higher than the declines experienced in 2025, indicating that the downward trend has not bottomed out but has instead accelerated. Notably, overall travel demand continues to grow, with OTAs like Booking and Airbnb maintaining or expanding market share.

Tripadvisor’s decline is not due to a contraction in demand but rather a redefinition of its position—metasearch intermediary—in the overall industry chain. AI search and generative responses are directly taking over the “comparison phase” that previously belonged to Meta platforms.

Shifting the Narrative to Find Optimal Solutions

In the face of systemic pressure on metasearch, Tripadvisor has chosen to pivot its product content towards experiences, centering around Viator; and shifting its product form from metasearch to OTA. From a demand logic perspective, this transformation makes some sense.

Compared to flights and hotels, experience products have stronger characteristics of “non-standardization” and “inspiration-driven” consumption, where purchasing decisions often occur at the destination or during trip planning, which naturally aligns with the use scenarios of AI-generated searches. Additionally, the experience market features a long-tail supply structure, with tens of thousands of small operators dispersed globally, resulting in a complex and opaque supply chain, theoretically providing some intermediary value to the platform.

At the same time, starting in Q4, the company has downplayed the “Brand Tripadvisor” narrative, referring to the products of Viator and TheFork—both OTA attributes—as “Market-leading brands,” while placing hotel metasearch and media advertising more clearly in the context of “other/traditional.”

The company itself provides a comparison: in 2022, traditional business contributed 59% of revenue and nearly all profits; by 2025, Market-leading brands are expected to account for 61% of revenue and 35% of adjusted EBITDA; and by 2026, the company anticipates that Market-leading brands will account for about two-thirds of revenue and contribute about half of EBITDA, with 50% of revenue and approximately 40% of EBITDA coming from Viator.

We believe that the company’s product line has not undergone a fundamental shift, primarily due to the marginalization of the hotel metasearch business, necessitating a narrative change to seek optimal solutions. However, while the experience business is indeed closer to the demand entry point of the AI era, it has yet to prove that it can establish stable efficiency advantages on the supply side; the risk of OTA formats being reconstructed by AI for traffic entry, though lower than metasearch, is not without concern.

From Falsification to Verification

Viator’s financial data is a direct reflection of this contradiction. In 2025, the experience business had a GBV of $4.7 billion and revenue of $924 million, maintaining double-digit growth; in Q4, the GBV was approximately $980 million, up 16% year-over-year, with bookings also growing by 18%. From a scale perspective, this is a continuously expanding market.

However, profitability is under significant pressure. The experience business’s Q4 EBITDA fell by about 50% year-over-year, indicating that profitability has not stabilized. Management’s guidance for 2026 is to increase the experience business’s profit margin by 300 to 400 basis points. This suggests that the actual profit margin base for 2025 is roughly in the range of 6% to 7%, which can only be described as “improvable but immature.” The means by which this improvement is to be achieved—increasing average transaction value, enhancing add-on sales, and boosting repurchase frequency—essentially require higher marketing investments and product expansion rather than organic growth.

More importantly, Viator’s position is precisely at the intersection of another potential risk—the possibility of AI agents connecting directly with suppliers. As AI gradually acquires search, selection, and booking capabilities, the platform’s business model may face competition from direct AI-connected supply in the long term. This bears a striking resemblance to the situation previously faced by hotel metasearch. While ChatGPT has taken a step back from internal transactions, other AI agents, including Google Gemini, are still advancing.

Thus, Tripadvisor’s transformation from metasearch to OTA is essentially not a shift from “decline” to “certain growth,” but rather a transition from a business model that has been falsified to one that remains to be verified as potentially viable again.

The Process of Repricing

The core value of Tripadvisor’s Q4 2025 financial report lies in providing a clear timeline: the hotel metasearch business, which the market previously believed to have stabilized, has entered a downward cycle again following AI’s reconstruction of traffic distribution. This change positions Tripadvisor as one of the first companies to show pressure in the AI landscape.

What Tripadvisor is experiencing is not merely a business transformation but a repricing of assets. From hotels to experiences, from metasearch to OTA, the company is attempting to find new paths amid the AI upheaval.

During this transitional period, the market assigns a lower valuation than during the pandemic, which is not overly pessimistic but rather indicative of uncertain pricing. For investors, the question is not whether Tripadvisor has found direction, but whether this path is sufficient to navigate the investment period and ultimately form sustainable profitability.

At the current stage, the answer remains unclear.