The financial results out of Tripadvisor continue to tell a
similar story each quarter – Viator is showing the most growth, and its revenue
is now inching toward surpassing revenue from the Tripadvisor Core, which
includes hotel metasearch, subscriptions and display ads, Tripadvisor
experiences and dining.
In the period from July through September this year, Viator
revenue came in at $245 million, up 41% year over year, and it accounted for 46% of
Tripadvisor’s total revenue in Q3 of $533 million. Total revenue for the
company was up 16% year over year.
Viator currently has about 300,000 products from 55,000
operators, and its gross booking value in Q3 was $1.1 billion.
In a call with analysts to discuss the quarterly results, Tripadvisor
CEO Matt Goldberg said the total addressable market for experiences is about $300
billion, and he views Viator's biggest competitors as offline bookings – not one of
the other online providers.
“Our teams are so focused on how we bring the traveler
online, how we drive awareness to the category … and the behaviors that we think
are going to emerge in making
it easy," he said.
“Our performance suggests we are on the right path.”
Specifically, Goldberg said the Viator team is thinking about
driving app downloads and loyalty and has been testing a rewards program that
will roll out soon.
Tripadvisor Core, meanwhile, had revenue of $290 million in
the quarter – up just 2% year over year. In a statement regarding the results,
the company said, within Core, branded hotels revenue was $181 million, a decline
of 4% year over year. “Within branded hotels, growth in the hotel B2B offering
was offset by declines in the hotel meta offering. Hotel meta performance was
primarily a result of declines in Europe, and lesser so in the [United States], which more
than offset growth in Rest of World.”
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Net income in Q3 was $27 million and adjusted EBITDA was
$127 million or 24% of revenue, which the company said exceeded expectations.
Regarding Tripadvisor Core, Goldberg said he is pleased with
the segment’s “steady, quarter-by-quarter progress,” and he is particularly encouraged
by early results of the company’s work with generative artificial intelligence,
including its AI-powered
trip planning tool and AI-powered
review summaries.
“During the first three months in beta, members who created
itineraries returned at a much higher rate within the first seven days than
members who hadn’t created an itinerary. And we’ve observed that higher return
rate continuing for the full month thereafter as well,” Goldberg said.
“Importantly, members who build an itinerary also generate on
average three times higher revenue than the average Tripadvisor member, and the
average member already monetizes at approximately 10 times the rate of
non-members. We believe the initial data is a good indication of early product market
fit. And we’re on a plan to launch this full trip planning and itinerary product
on our mobile app on iOS and Android this quarter.”
Goldberg said the company is also seeing monetization
opportunities with its refreshed destination content that uses generative AI
and machine learning to pull in tips from the Tripadvisor community and its
editorial team.
“Curating fresh relevant content on these pages is driving 15%
more saves. Travelers are engaging more frequently by adding desired hotels,
restaurants or experiences they discover through our product to the trip they
are planning,” he said.
“We’ve already observed double-digit increases in experiences
revenue on the pages with these content enhancements, and we are just beginning
to scale.”
Tripadvisor’s selling and marketing costs were $272 million
in Q3, up 16% year over year, and represented 51% of revenue, similar to the
figure from Q3 2022.
In October Tripadvisor, along
with Booking.com, Expedia Group, Amazon and other non-travel sites, announced a
coalition
that will work to bring more trust and authenticity to online reviews.