Tripadvisor to raise $300m through convertible note offering
US: Online travel site Tripadvisor has announced that it plans to raise $300 million in convertible notes via a private offering, in a move that may include “repayment of existing debts”.
The issue of convertible notes is set to fund the costs of “capped call transactions and other general corporate purposes” and the private offering is due by 2026.
An additional $45 million is also being granted to the initial buyers of the convertible notes to purchase.
It comes as the firm’s revenue plummeted 61 per cent to $604 million in 2020 compared to the previous year although its president and CEO, Steve Kaufer, has expressed buoyancy for a return to travel in 2021.
Tripadvisor launched its new membership program for travellers, Tripadvisor Plus, in beta back in December 2020, initially to a selection of its US traffic. Hotels worldwide interested in capturing pent up demand from U.S. travellers are encouraged to join the program now.
Last year, the company announced it was laying off 900 employees – almost 25 per cent of its workforce [including 600 employees in the USA and Canada] – in a “significant” cost-cutting exercise to navigate the coronavirus crisis.
Speaking at the time, Kaufer said: “Sometimes, the most valiant of efforts aren’t enough to counter outside circumstances and, as a public company, it is our responsibility to adjust, adapt and evolve to the environment that surrounds us.”
TripAdvisor was also reported to be floating the idea of selling off its stake in its vacation rental business collection, which constitutes less than ten per cent of the company’s overall revenue. It manages five vacation rental brands – FlipKey and VacationHomeRentals [US], Holiday Lettings and Housetrip [UK] and Niumba [Spain].
Last week, the firm was accused of “subterfuge” and “double standards” on content use on its site, relating to a terms and conditions update, by a number of accommodation owners and hosts. Tripadvisor responded by saying that the update related to terms and conditions for hotel property owners, not holiday rental properties which are listed separately to hotels on its site, and added that it was “purely optional for owners” following feedback from hoteliers.