Portfolio news this week (ending 27 June)

This week’s news includes TripAdvisor’s profit warning and pivot to quality experiences, an interview with iFAST CEO and MasterCard’s spend update.

iFAST CEO interview with Zuu: iFAST is aiming to be the Netflix of Fintech by providing banking and wealth management services to clients globally. Applying for a Singapore digital banking license is the first step to realizing this goal.  Link

TripAdvisor and 2Q results: TripAdvisor warned that revenue in April and May 2020 was 90% lower year on year leading to a forecast USD85 million EBITDA loss for the second quarter of 2020. Here’s the good news: Revenue and user activity improved in June 2020 and the company expects the third quarter to be better than the second quarter. Bad 2Q results should be within expectations. Hotel ads made up  ~87% of TripAdvisor’s EBITDA in 2019 and hotels are struggling this year. I think TripAdvisor has enough cash (USD693 million as of end-May 2020) to last this downturn but I’ll be watching cash burn and the Experiences & Dining dining segment (more below) closely during the next results update. Link 

Less is best for Viator: Skift posted a great story about TripAdvisor’s Viator emphasizing quality over quantity now with the company giving more exposure to “quality” experiences and charging a USD29 fee for new listings. Viator can afford to do this because it has the largest experiences supply footprint (395,000 listings!) among the OTAs.  Link 

MasterCard and spending trends: MasterCard said domestic spend is starting to normalize in most markets with US spend up 5% year on year although cross-border spend was still ~41% lower year on year during the first three weeks of June. Increased spend on discretionary categories such as restaurants and domestic travel is encouraging.  Link

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