TripAdvisor is doubling down on tours and activities.

TripAdvisor CEO Stephen Kaufer said Tuesday the company’s tours and activities offerings, which it recently rebranded as TripAdvisor Experiences, might turn out to be a business worth “up to a couple billion dollars.”

It was only two years ago, at the same JPMorgan Global Technology, Media and Communications conference that Kaufer addressed Tuesday, in which he termed attractions as “our next $1 billion business.”

So Kaufer, speaking at the gathering in Boston, has doubled his estimate of the company’s footprint in the sector, adding that’s he’s “extremely bullish on that attractions space.”

He said that the attractions business should have take rates of 15 to 20 percent, similar to the online hotel business, but the addressable market would be only around half that of hotels.

“So if you size Attractions compared to hotels, overall size might be half, but we’re the leader in that category,” Kaufer said. “So what can the margin should kind of look the same as hotels from an OTA [online travel agency] perspective.”

A Clear Faraway Lead?

When asked about the tours and activities competition, which includes Expedia, Booking.com, Airbnb, GetYourGuide and Klook, among others, Kaufer said TripAdvisor, which acquired Viator in 2014, is far ahead of the pack.

“Yes, there are a number of players jumping into the Experiences game,” Kaufer said. “I’d say we have the clear, faraway lead in the category already. If you look at the demand on TripAdvisor, the number of the 100-plus million attractions, shoppers every month, they’re planning the trip, they’re in-destination, they’re looking for a great thing to do and they’re already coming to TripAdvisor.”

Competitors, of course, will have something to say about whether TripAdvisor will be able to maintain that so-called faraway lead. Booking Holdings just acquired FareHarbor, a supply integrator that’s a lot bigger than TripAdvisor’s new possession, Bokun.

Airbnb, too, with its increasingly global brand recognition, is making a push in the experiences sector.

Kaufer acknowledged that these are still early days for bringing tours and activities online, saying the company only offers a “small percentage” of all the possible things to do at most destinations. But he argued that TripAdvisor’s advantage and opportunity is to leverage that “incredible footprint of demand that TripAdvisor already has.”

Bokun Strategy

Kaufer conceded that Iceland-based Bokun, which TripAdvisor bought recently, has a limited geographic scope but TripAdvisor plans to “blow it out globally.” It will take years, however, to build up Bokun’s global supply of attractions. In the interim, TripAdvisor will maintain connections with other technology integrators, too, he said.

[Clarification: Kaufer said at the conference that TripAdvisor would continue to connect to a variety of reservations systems to access tours and activity inventory; he was not saying that TripAdvisor would scale Bokun globally, and then cut ties to other software systems. “TRIP doesn’t have an exclusive relationship to Bokun,” Kaufer said. “We connect with as many different SaaS (Software as a Service) providers as we can to bring the inventory online for sale on Viator or Viator international points-of-sale and, most importantly, for all of the reach that TripAdvisor has.”]

Kaufer portrayed its Experiences business as being a supplement to the company’s hotel business as it emphasizes TV advertising over performance marketing, and deals with the subsequent drop in people shopping for hotels through its channels. In making its marketing spend more efficient, TripAdvisor is trying to target more targeted leads — or customers further along or more likely to book.

As its number of hotel shoppers drop because of the changed marketing strategy, consumers who do use TripAdvisor to shop for hotels may stay engaged longer and make an incremental booking the form of a purchase for an in-destination tour or attraction, Kaufer said.

In the first quarter, TripAdvisor’s non-hotel business, which includes experiences, restaurants and rentals, increased its revenue 36 percent to $79 million compared with the year-earlier period. Tours and activities and restaurants are driving the growth in TripAdvisor’s non-hotel segment, which isn’t profitable.

Along with tours and activities, Kaufer is bullish on its restaurant reservations and advertising business, as well. Kaufer said TripAdvisor has 4 million to 5 million restaurant listings on the site, and he’s challenging his team to turn that into a $1 billion business.

Photo Credit: TripAdvisor plans to turn its tours and activities segment into a $2 billion business. Pictured in this April 15, 2016, photo, tourists walk at Banteay Srey temple of Angkor complex, in Siem Reap province, about 320 kilometers (199 miles) north of Phnom Penh, Cambodia. Heng Sinith / Associated Press