Along with its dining reservations business, Tripadvisor's tours and activities unit had been a bright spot. But well-funded competitors such as GetYourGuide and Klook have tightened the race, and Tripadvisor is feeling it.
Tripadvisor will be laying off about 200 workers, and Skift has learned that its Experiences business could be one of the targets of the company’s cost-cutting.
Bloomberg first reported on Wednesday night the pending layoffs, saying that about 200 jobs would be eliminated, according to its sources. That would represent about 5 percent of Tripadvisor’s total workforce.
But Skift has learned that Tripadvisor’s Experiences business, where it was an undisputed leader over the last few years, could be a focal point of a cost-cutting drive as the company faces both revenue and profitability headwinds.
During Tripadvisor’s third quarter earnings call November 7, Chief Financial Officer Ernst Teunissen said the company would be looking to cut $60 million to $80 million out of its annual run rate. The company attributed some of its troubles to Google’s increased travel footprint, including the search engine’s moves to downplay organic links, and to divert consumers toward its own advertisers.
Tripadvisor wouldn’t comment about the layoffs Wednesday evening, but confirmed that the company will reduce expenses and reinvest some of the savings into its media advertising business, restaurant services, hotel business to business services, and membership and loyalty initiatives.
In the third quarter, Tripadvisor’s Experiences and Dining segment saw earnings fall 46 percent to $15 million. Revenue jumped 19 percent to $141 million.
TV advertising could also be in for some trimming as Tripadvisor looks to move brand advertising “across newer, more impactful mediums compared to our historically television-focused campaigns,” according to a statement.
Experiences Could Be Under the Gun
In November, Tripadvisor stated that it would right-size its Experiences and Dining segment — but on Wednesday Experiences was notably absent in Tripadvisor’s statement about growth areas it would seek to invest in.
Although Tripadvisor has been an disputed leader in Experiences since its acquisition of Viator for $200 million in 2014 and, to a lesser extent, its purchase of tours and activities connectivity platform Bokun in 2018, that segment has been increasingly under pressure, according to a source.
Part of the resistance that Tripadvisor Experiences has faced comes from an increasingly competitive landscape. Among the factors, GetYourGuide in Europe, and Hong Kong’s Klook have raised big venture capital money: Klook has attracted more than $520 million in funding to date, and GetYourGuide around $654 million, according to Crunchbase. Airbnb’s Experiences and Booking.com’s entries into the sector could be factors, as well.
The precise details about Tripadvisor’s layoffs and areas of cost-cutting have yet to be officially disclosed.
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Tags: airbnb, experiences, getyourguide, google, Klook, tours and activities, tripadvisor
Photo credit: TripAdvisor offers various zip-lining activities. The company's Experience business could be facing cuts. TripAdvisor