Starboard's Activism: A Blueprint for TripAdvisor's Revival

The travel tech sector is in flux, and TripAdvisor (TRIP) finds itself at a crossroads. With its core business in decline and margins under pressure, the company's valuation languishes below its intrinsic potential. Enter Starboard Value, the activist investor with a proven track record of unlocking value through operational discipline and governance reforms. A 9.1% stake acquired in late 2024 has positioned Starboard to push TripAdvisor toward a transformative turnaround. This article examines how Starboard's playbook—cost-cutting, strategic asset repositioning, and governance overhauls—could revive TripAdvisor's prospects, while weighing the risks that threaten this ambitious agenda.

The Decline of the Core: A Crisis of Relevance

TripAdvisor's struggles are stark. Its namesake brand, once the gold standard for travel reviews, now contributes just 47% of revenue—a 44-percentage-point drop since 2015. Q1 2025 results underscored the malaise: an 8% year-over-year revenue decline, with gross booking values (GBV) for its Experiences & Dining segment falling 15% due to self-service sales transitions. Meanwhile, margins remain strained; Viator, despite an 800-basis-point margin improvement in Q1, still posted an $18 million EBITDA loss. This reflects a broader issue: TripAdvisor's legacy platform is losing relevance to tech giants like Google Travel and Airbnb, which dominate search and booking experiences.

Starboard's Playbook: A Four-Pronged Strategy

Starboard's 2024 13D filing outlined its intent to engage TripAdvisor's management and board, but its historical playbook offers clues to its likely demands:

1. Operational Restructuring:
   Starboard will likely push to slash costs in non-core areas. Trimming underperforming offices, consolidating back-office functions, and halting bleeding in the TripAdvisor core could free capital for high-growth subsidiaries. A would reveal where efficiencies are most needed.

2. Strategic Reprioritization:
   The focus must shift to subsidiaries like Viator (experiences bookings, 13% CAGR) and TheFork (European dining reservations, 12% revenue growth). A highlights the opportunity cost of underinvesting in these segments. Starboard may also propose monetizing non-core assets, such as selling TheFork or spinning off Viator to unlock standalone value.

3. Data Monetization:
   TripAdvisor's treasure trove of user reviews and travel behavior data—valuable for AI-driven insights—remains underutilized. Partnerships with data platforms or licensing agreements could create a new revenue stream, as seen in Starboard's work at Campbell's Soup to leverage underused assets.

4. Governance and Capital Allocation:
   The 2024 merger with Liberty TripAdvisor Holdings eliminated dual-class shares, but Starboard may seek further governance reforms. A underscores its ability to drive board changes. Capital allocation could shift toward share buybacks or dividends, leveraging $1.65 billion in post-merger liquidity.

Catalysts for a Turnaround

Investors should watch three near-term triggers:
- Q2 2025 Earnings: Margins in Viator and TheFork must stabilize or improve. A will signal progress.
- Starboard's Formal Proposals: By mid-2025, expect demands for board representation, leadership changes, or asset sales. The activist's suggest urgency.
- Industry Momentum: A rebound in travel demand post-pandemic, particularly in discretionary experiences, could boost Viator's bookings.

Risks: Execution and Competition

The path is fraught with hurdles. Starboard's success hinges on TripAdvisor's ability to:
- Execute Cost Cuts Without Damaging Customer Experience: Reducing cancellations and improving average booking values at Viator requires operational precision.
- Outmaneuver Tech Giants: Google's dominance in travel search and Airbnb's end-to-end booking model leave little room for error.
- Avoid Overpromising: A reveals investor skepticism. Overly ambitious targets could backfire.

The Investment Thesis: A High-Reward Gamble

Starboard's involvement marks TripAdvisor as a classic “value-creation” story. The upside—$34.48 per share—implies a 124% return from current levels, but risks are significant. Bullish investors should consider a small position ahead of Q2 earnings, with a target above $20 signaling renewed confidence. Cautious investors should wait for Starboard's formal proposals and tangible progress on margin improvements before committing.

The verdict? TripAdvisor's undervaluation creates asymmetric upside for those willing to bet on Starboard's track record. Yet the journey from undervalued to unlocked will be as turbulent as the travel industry itself.

Note: This analysis assumes Starboard's proposals align with operational realities and competition dynamics remain stable.