Starboard's TripAdvisor Stake: Can Activist Play Revive a Declining Digital Giant?

The travel tech sector has seen its fair share of turbulence, but few companies embody the challenges of legacy digital platforms quite like TripAdvisor. Once the gold standard for travel reviews and bookings, the firm has struggled with stagnant revenue and declining traffic in recent years. That is, until activist investor Starboard Value took a 9% stake in early 2025, sparking a 10% stock surge and reigniting hopes of a turnaround. The question now is: Can Starboard's playbook—proven at Campbell's and Hilton—rescue TripAdvisor before it becomes a relic of the pre-smartphone era?

The Decline and Opportunity in TripAdvisor's DNA
TripAdvisor's Q1 2025 earnings revealed a company at a crossroads. While total revenue dipped 1% to $398 million (3% growth in constant currency), its core TripAdvisor brand—a once-dominant hub for hotel reviews—slumped 8% year-over-year. Meanwhile, subsidiaries like Viator (experiences booking) and TheFork (restaurant reservations) grew by 10% and 12%, respectively. This bifurcation highlights a truth: TripAdvisor's future lies in its ability to pivot away from its fading core and double down on higher-growth segments.

But the company's balance sheet still holds promise. With $1.65 billion in liquidity, including $1.15 billion in cash, TripAdvisor has the financial flexibility to execute a bold strategy. Starboard's arrival signals that the board may finally act on the $435 million merger with Liberty TripAdvisor—a move that could simplify operations and retire shares, boosting shareholder value.

Starboard's Turnaround Track Record: A Blueprint for TripAdvisor
Starboard's history of operational overhauls offers clues about what's to come. At Campbell's Soup, the firm slashed costs, simplified product lines, and returned capital to shareholders. At Hilton, it streamlined operations and focused on high-margin segments like luxury travel. Applying this lens to TripAdvisor, here's how Starboard could engineer a revival:

1. Cost-Cutting in Non-Core Areas: The core TripAdvisor brand, which now accounts for just 47% of revenue (down from 91% in 2015), could be trimmed to reduce overhead. Closing underperforming offices or consolidating back-office functions could free up capital for growth initiatives.

2. Monetizing Data Assets: TripAdvisor's treasure trove of user-generated reviews and travel behavior data remains underleveraged. Partnering with AI-driven platforms or licensing data to third-party services could create a new revenue stream—a move Starboard might push aggressively.

3. Strategic Divestments: Selling underperforming assets like TheFork (which grew but remains a regional play in Europe) could generate cash to reinvest in Viator or other high-growth areas. Alternatively, spinning off subsidiaries could unlock value for investors.

4. Leadership Shakeup: Starboard's involvement often leads to boardroom changes. CEO Matt Goldberg has overseen a shift toward experiences, but the firm's stock underperformance (down 15% over 12 months before the stake announcement) suggests investors want faster action.

Market Anticipation vs. Execution Risk
The 10% stock surge since Starboard's stake became public underscores investor optimism. But execution will determine whether this becomes a sustained rally. Key catalysts to watch ahead of Q3 2025 earnings include:
- Evidence of cost reductions in the core business.
- Revenue growth acceleration in Viator, which is riding a 13% CAGR in the experiences market.
- Progress on the Liberty TripAdvisor merger and share buybacks.
- Signs of data monetization partnerships or divestment deals.

Investment Thesis: Buy the Turnaround Play, but Mind the Risks
For investors, TripAdvisor represents a classic “value with catalyst” opportunity. The stock trades at a ~4x EV/EBITDA multiple, far below peers like Expedia (7x). If Starboard can deliver even half of its potential value-creation levers, upside could be significant.

However, risks remain. The core TripAdvisor brand's decline could accelerate if younger travelers shift entirely to platforms like Google Travel or Instagram. Additionally, macroeconomic pressures—such as a potential recession dampening discretionary travel spending—could test margins.

Action Plan
- Buy: Accumulate shares if TRIP dips below $14.50, targeting the $17–$18 price target implied by recent takeover rumors.
- Hold: Wait for Q3 earnings to confirm progress on cost cuts and Viator growth.
- Avoid: If Starboard's influence wanes, or the core business's decline accelerates.

Final Take
Starboard's stake in TripAdvisor is more than a governance play—it's a shot across the bow for legacy digital platforms clinging to outdated models. If the firm can harness its liquidity, pivot resources to high-growth segments, and execute Starboard's operational discipline, the 10% stock surge could be just the beginning. For investors, this is a bet on whether activist pressure can transform a fading giant into a lean, data-driven powerhouse. The next few quarters will tell.

Joe Weisenthal is a pseudonym for a financial markets analyst. The above analysis is for informational purposes only and should not be construed as investment advice.