Skift Take

It is widely acknowledged that TripAdvisor needed to reinvigorate its business and product lines after a difficult transition to hotel metasearch and instant booking. The company believes the new internal structure will give its units that enhanced focus.

TripAdvisor has undertaken a fundamental reorganization of its business units, and there will be several executive departures, including chief marketing officer Barbara Messing and Robin Ingle, senior vice president of sales, Skift has learned exclusively.

Both executives — two high-profile female executives at the company — will stay on through April to take part in the transition. Ingle is said to be retiring.

The sweeping changes to TripAdvisor’s internal setup, from cross-functional teams to independent business units, is not expected to lead to layoffs. [See the TripAdvisor internal email, which the company provided to Skift, announcing the changes below.]

Among the changes, TripAdvisor’s core hotel business will be reorganized and will get its own profit and loss structure; members of TripAdvisor’s product, engineering, sales and marketing teams who previously supported hotels from across the company will now report directly to the head of the hotels business unit.

The hotel business unit is conducting an external search for a president, as is another new business unit, TripAdvisor Core Experience, which will run brand marketing, search engine marketing, public relations, and other shared companywide services.

TripAdvisor co-founder and CEO Steve Kaufer will lead the new hotel and TripAdvisor Core Experience business units while the search for a president of each of the units is completed.

TripAdvisor attractions and rentals business, which will continue to be headed by Dermot Halpin, already has its own profit and loss structure internally, as does TripAdvisor’s restaurant business, which will continue to be run by Bertrand Jelensperger. Both will be independent business units within TripAdvisor.

From a financial reporting perspective, TripAdvisor’s quarterly results will continue to be broken down between hotel and non-hotel, including activities, vacation rentals and restaurants. TripAdvisor will evaluate its financial reporting structure but is announcing no changes.

In the internal email, Kaufer outlined the reasons for the organizational changes:

“As many of you know, TripAdvisor — with its foundation in our Hotels business — has historically been structured as a functional organization, with traditional marketing, sales, product and engineering departments. These functional groups have provided support for both the Hotels business, as well as the overall TripAdvisor-branded website and non-TripAdvisor branded websites. However, as our business has grown to include Restaurants, Vacation Rentals, Flights, Attractions and SmarterTravel, we realize we need to make a fundamental shift from being organized by function to being organized by business units – each led by a defined leader who will be given the functional resources necessary to succeed and metrics by which their success will measured.”

Among other reconfigurations, TripAdvisor’s flight metasearch business will become a standalone business unit, Air, run by the product’s current boss, Bryan Saltzburg.

TripAdvisor’s Smarter Travel media unit will continue to be overseen by CFO Ernst Teunissen.

Why Now?

TripAdvisor has struggled over the last few years with its transition to hotel metasearch and instant booking, and recently some advertisers, including possibly the Priceline Group, have tamped down their advertising spend through TripAdvisor, as they have through Expedia’s Trivago.

Previous branding campaigns, prior to the current one, didn’t really hit the mark. TripAdvisor will undoubtedly provide its take on its current TV campaign when it reports fourth quarter results,  which is tentatively scheduled for February 15.

In October, Adam Medros, who oversaw all of the company’s products as senior vice president of global product, left the company. A month earlier, one financial analyst said at the Skift Global Forum in New York that there has been little product innovation in TripAdvisor’s hotel business in recent years. In a separate interview at the Forum, Kaufer defended the company’s track record, saying it is providing customers with the types of products they desire rather than less relevant bells and whistles.

TripAdvisor hopes that making each business unit responsible for its own bottom line, with each having its own product, marketing and engineering resources, for example, will move the businesses forward.

Another change in the reorganization is Nick Shanny, who has been vice president of engineering and operations since June 2015, gets promoted to chief technology officer.

The fact that the executive departures come from the sales and marketing side signals the company’s dissatisfaction with results in this arena, although Kaufer’s email praises the role of both departing executives.

TripAdvisor, though, pushed back on the argument that the current marketing campaign may be in trouble.

“We continue to be pleased with the investments made in our latest advertising campaign,” said TripAdvisor spokesman Brian Hoyt. “And we remain confident in our plans to make multi-year investments in brand advertising to help more travelers use TripAdvisor in new and different ways, inclusive of finding the lowest price for the right hotel for them as a unique consumer.”

The reorganization also could lead one to believe that the TripAdvisor board, which has been criticized by some for its seeming lack of urgency in turning things around, retains confidence in CEO Kaufer, and at least is giving him more runway to revive the business.

Both departing executives are women, and Kaufer addressed that development in his email to employees.

“I would be remiss if I didn’t acknowledge that we are losing not only two excellent executives, but also two women with significant tenure on the management team,” Kaufer wrote. “I have always been, and will continue to be, an advocate for hiring and empowering strong female leadership, as well as for the value of diversity across our organization. I can promise you that as we are recruiting for these two new roles, the management team is committed to interviewing a diverse slate of candidates.”

Here is the internal email Kaufer sent to TripAdvisor employees January 9:

Download (PDF, 74KB)


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Tags: tripadvisor

Photo credit: This is the Tripadvisor owl used in its TV commercials. TripAdvisor

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