A Bullish Look at TripAdvisor

TripAdvisor (NASDAQ:TRIP) has taken a severe beating since its highs back in mid-2014 where its stock price hit an all-time high of $111.24 a share. We believe that a combination of severe competition from major travel coordinators and the stagnation of travel costs was the major catalyst for the stock shedding over 62% of its value as of Friday's closing price of $42.18 a share.

In recent years, however, we witnessed a solid uptick in travel with an increase of booked flights and accommodations around the globe as price wars, consolidation and lower oil prices allowed airlines to reduce the overall price of travel to an affordable range for a significant portion of the world's population.

The 2016 20-Year Passenger Forecast study finds that air travelers are set to nearly double by 2035, according to The International Air Transport Association (IATA), which expects 7.2 billion passengers to travel in 2035 when compared to the 3.8 billion air travelers in 2016. The prediction is based on a 3.7% annual Compound Average Growth Rate (CAGR). And with an increase in air travel comes an increase in accommodations, which will help fuel the travel industry further.

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