As it prepares to mark 20 years in business next month, Tripadvisor is embarking on a dramatic realignment aimed at helping
the company preserve profitability and spur new growth as it deals with competition
from Google and others and with evolving preferences from travelers.
The Viator brand, which Tripadvisor acquired for $200
million in 2014, will now operate independent of Tripadvisor Experiences, with
its own marketing, product and engineering teams.
In a memo sent to employees after markets closed today,
co-founder and CEO Steve Kaufer says this will “give Viator the opportunity to
grow its brand and business offerings as a leading Experiences OTA.”
In tandem with this change, Kaufer says Dermot Halpin, who
has been president of experiences and vacation rentals, will leave the company
but will stay on as an advisor through the first quarter. During that time,
Kaufer will lead Viator, and then Ben Drew, who has been vice president of
business development and strategy for rentals and attractions, will take over
as president.
Viator founder Rod Cuthbert says he’s been concerned about Tripadvisor’s
neglect of Viator since the deal went through nearly six years ago, and today’s
announcement provides a valuable lesson for brands that make acquisitions.
"This
is definitely an 'I told you so' moment for me," Cuthbert says. "Back in 2017 I talked about the mistake I felt Trip was making in
shifting emphasis away from Viator, the established leader in tours and
activities, to Tripadvisor Experiences. Based on the announcement today, it
looks like I got that 100% right.
"I've had a bunch of calls from current and
ex-Viator people today, and it'd be fair to say there's a lot of
schadenfreude in the air over Dermot's departure. It turns out, though, based
on what I've learned, that in the end he was the strongest advocate for
increasing the focus and investment in the Viator brand.
“One
can only imagine how much more successful this acquisition might have been had
Trip recognized that [former CEO] Barrie Seidenberg and her executive team - Scott McNeely, Kelly
Gillease, Ken Frohling - who all walked within a couple of years, were key to
the company's future, and knew just a little more about how to grow the
business than the Trip execs who took over the reins.
"There's definitely a
lesson here for acquirers: If you're buying a great business, put faith in the
people who made it great! Don't imagine your own team have some special sauce
that'll make it better. The Trip/Viator experience says that definitely isn't
the case."
Kaufer says Viator is one of five lines of business that
exceed $100 million in revenue. The others are hotel B2B solutions, Experiences
on Tripadvisor, TheFork and Tripadvisor Restaurants, and media advertising. In
his memo, Kaufer says he believes growth in these five areas can “collectively
more than offset hotel auction headwinds and will help us return to sustained
top-line growth.”
Investments in those five areas will come, in part, from
cost-cutting in the form of layoffs – which PhocusWire can confirm is around 200 people.
In the company’s Q3 2019 earnings call in November,
Tripadvisor senior vice president, CFO and treasurer Ernst Teunissen alluded to
the cuts, saying, “ ...what we are currently, sort of, anticipating is to take
a meaningful, call it, $60 million - $80 million out of our run rate and use
that to fund some of the growth areas...”
And changes are also underway in the executive suite.
Gary Fritz who has been chief growth officer and president for Asia Pacific,
will leave the company in the second quarter. The APAC organization will now report
into Lindsay Nelson, who becomes chief experience and brand officer. Under
Nelson, Jane Lim will lead activities in APAC.
Kaufer writes the company is also “centralizing the
previously distributed teams across design, user research, CRM,
partnerships/business development, and communications functions under Lindsay
Nelson. In addition to leading brand marketing, CoreX product, membership &
loyalty, new ventures (consumer), Lindsay will continue to drive the
advertising and media sales organization focused growth outside of Hotel &
OTA categories.”
Kanika Soni becomes chief commercial officer and will take
on responsibility for Tripadvisor’s B2C product, SEO and performance marketing
for rentals, Experiences and restaurants. She will also continue to oversee hotels
B2B portfolio and auction and hotels and online travel agency sales organizations.
Along with the product changes aimed at creating a more
engaging, traveler-centric experience, Tripadvisor confirmed it is also
switching to a lowercase “a” in its name as one of many visible signs that will
be rolling out in the coming months to signal the brand’s transformation.