The shares of online travel company TripAdvisor (TRIP) are rallying after it announced that hotel inventory from a number of Expedia's (EXPE) brands would be displayed on its Instant Booking platform. The deal will help Instant Booking sell more hotel stays, research firm Piper wrote in a note to investors today.

NEWS: Some of Expedia's hotel inventory will be available on TripAdvisor's U.S. desktop site "as part of the initial test" of the deal TripAdvisor reported. "Adding Expedia to the instant booking platform nicely complements TripAdvisor's existing hotel inventory and helps users shop for a great deal on a hotel," said TripAdvisor's Senior VP of Global Sales Robin Ingle in a statement.

ANALYST REACTION: The inclusion of more hotel inventory should give TripAdvisor's Instant Booking platform a better opportunity to "match or beat" the lowest prices offered on other websites, wrote Piper analyst Michael Olson. The deal should enable the website to sell more hotel stays, he added. Olson says that the "trajectory of Instant Booking is improving," and he continues to believe that the website will enable TripAdvisor to monetize more of its hotel inventory while "creating stronger long-term economics for the company." The analyst kept a $70 price target and an Overweight rating on the stock.

PRICE ACTION: In late morning trading, TripAdvisor rose nearly 7% to $49.60 and Expedia added 1.5% to $118 per share.