Viator’s revenue surpasses brand Tripadvisor for first time in Q3

Tripadvisor’s experiences brand, Viator, has been on a
steady growth trajectory since the pandemic and in the three months ending
September 30 its revenue surpassed that of brand Tripadvisor for the first time
since the company began separating the two lines of business in its earnings
reports.

With revenue of $270 million in Q3 this year— up 10% year over
year — Viator accounted for 51% of Tripadvisor’s total revenue of $532 million.
Gross booking value for experiences grew 9% in the quarter to nearly $1.1
billion, and adjusted EBITDA for Viator was $30 million, or 11% of revenue,
compared to 7% of revenue in the same period last year. 

Viator’s figure includes contributions from both Viator and
Tripadvsior B2C points of sale of experiences as well as B2B offerings for
operators and third-party distributors. 

“Our ambition is to extend our leadership position in this large
an expanding market with our scaled global platform and attractive financial profile,”
said Matt Goldberg, Tripadvisor CEO in a call with analysts to discuss the quarterly
results.

“This is one of the most exciting opportunities in travel
given the … tailwinds, low online penetration and the growing recognition of experiences
as the most meaningful and important part of travel. This positions experiences
to grow faster than the travel industry as a whole over the foreseeable future.”

Tripadvisor reported Viator
has more than 350,000 bookable experiences, more than 55,000 operators and more
than 4,000 demand partners. And chief financial officer Mike Noonan said Tripadvisor’s experiences
business benefits from having two “unique assets” — brand Tripadvisor’s broad
reach upper funnel and Viator’s ability reach high-intent travers as an OTA —
that give it an advantage for future growth.

Looking ahead, Goldberg said the company sees multiple
opportunities to expand its position in experiences, including reaching new
source markets, adding new categories of supply, geographic expansion through
partnerships and new B2B sellers. 

“There is a lot of enthusiasm about how we are positioned
and what 2025 will bring,” Goldberg said. 

Brand Tripadvisor

The enthusiasm was a bit more tempered regarding brand
Tripadvisor, the company’s core metasearch and travel guidance platform, which
just a few years ago delivered nearly all of the company’s revenue.

Brand Tripadvisor’s revenue came in at $255 million in the
quarter – just under 48% of the company’s total revenue and down 12% year over
year. 

Adjusted EBITDA for brand Tripadvisor in Q3 was $87 million
or 34% of revenue, above expectations. Within brand Tripadvisor’s figures, revenue
from branded hotels was down 17% year over year in the quarter to $151 million
and revenue from media and advertising was $40 million, up 5% year over year.

We continue to work to transform the business and shift from our historical reliance on the profitable but pressured legacy hotel meta offering.

Matt Goldberg, Tripadvisor

“We continue to work to transform the business and shift
from our historical reliance on the profitable but pressured legacy hotel meta
offering,” Goldberg said.

Goldberg said the company is addressing the “well-known
headwinds” by improving Tripadvisor’s travel planning and guidance capabilities,
growing engagement through its mobile app and optimizing conversion in hotel
and experiences booking capabilities. 

In August
Tripadvisor launched in-app hotels bookings through a partnership with Hopper
Technology Solutions. 

“As we continue to scale in-app hotel booking in the U.S. we
are seeing higher click through rates, 4X better monetization per booker and
significantly higher experiences revenue and review and photo submission versus
in-app meta,” Goldberg said. 

The company is also enhancing its offerings for members,
including rewards and promotions and member-only capabilities such as
AI-powered trip planning and the in-app hotel booking.

“We expect Tripadvisor to be increasingly focused on a
streamlined set of priorities, including further differentiating our brand and
content around planning and guidance, driving booking growth in our experiences
and hotels categories — especially in app — and enhancing our membership
offerings to reward engagement and drive monetization,” Goldberg said.

Goldberg said he is pleased with the progress the company
has made on implementing a new strategy for brand Tripadvisor, which he
initially outlined in February 2023, noting the business has “stabilized and returned
to growth,” but he acknowledged they are all “impatient to translate that
progress into financial performance at scale.”