In a historic pivot for Tripadvisor, the renowned travel platform has marked a significant milestone. The second quarter of this year saw Viator, the tours and activities brand acquired by Tripadvisor almost a decade ago, surpass the revenue generated by the platform’s traditional cornerstone – hotel metasearch.
The implications of this turning point are far-reaching, shifting Tripadvisor’s positioning to a greater extent into the realm of online travel agencies. Viator operates as a booking business, while metasearch functions as an advertising enterprise.
Viator’s ascent to the top spot hasn’t been without challenges. Although it’s deemed a leading player and a fast-growing segment of Tripadvisor’s business, Viator remains non-profitable. Unlike the hotel advertising business, the profitability of tours and activities, along with the size of the shopping cart, tends to be smaller by various measures.
The landscape of advertising spend has undergone a transformation, with major players like Expedia Group and Booking Holdings diverting funds from metasearch to other avenues, such as app downloads, loyalty program enrollments, and brand marketing. Google’s impact on metasearch competitors is evident, yet the search giant faces its own pressures from advertisers diversifying spending and impending antitrust actions.
Although Viator’s revenue outshines hotel metasearch, questions loom about its journey to profitability. The second quarter saw Viator lose $2 million in adjusted EBITDA, attributed in part to content management, customer service expenses, and costly third-party partnerships.
Considering the relative size of the attraction business compared to accommodations, it’s clear that profit potential in tours and activities might not be as substantial. Industry leaders like Booking.com have opted out of developing their tours and activities business, focusing on higher priorities.
Speculation has arisen about Tripadvisor potentially spinning off Viator into an IPO, with the company confidentially filing the necessary paperwork in 2022. However, the performance of unprofitable fast-growing companies in public markets remains uncertain.
Tripadvisor envisions greater integration between tours and activities and the hotel booking flow. By incorporating bookable tours alongside hotel options, the platform aims to enhance user engagement. The company’s strategic approach involves presenting users with multiple products and services, guiding them to the right hotel and benefiting partners. As this initiative unfolds, Tripadvisor anticipates substantial monetization opportunities.
In an ever-evolving landscape, Tripadvisor’s journey through this inflection point illustrates the delicate balance between expanding into new realms and ensuring profitability in the face of industry dynamics.
As the travel and online booking sector continues to transform, Tripadvisor’s strategic shifts and the rise of Viator stand as a testament to the intricate challenges and opportunities that define the modern travel ecosystem.
https://www.tripadvisor.it/Tourism-g1728825-Viator_Province_of_Almeria_Andalucia-Vacations.html
