Flush with SoftBank and other venture capital money, GetYourGuide and Klook, as well as Airbnb and Booking.com, are nipping at Tripadvisor's heels in tours and activities. Tripadvisor will try to leverage its brand, Viator, which already had a following before Tripadvisor absorbed it, to keep the insurgents at bay.
Fresh off the news announcing 200 layoffs around the world, Tripadvisor informed employees on Thursday about a wide-ranging reorganization. The company will reverse its long-standing playbook and emphasize Viator as a separate tours and activities brand.
In an employee letter obtained by Skift from a source close to the company, and sent after market close Thursday afternoon, Tripadvisor co-founder and CEO Steve Kaufer announced that Viator and Tripadvisor Experiences, which is found under the “Things to do” tab on the company’s homepage, will operate as independent brands and with separate product, engineering, and marketing teams. (See the letter embedded below.)
As part of that change, Dermot Halpin, who headed Attractions and was mentioned by Skift as a potential candidate to become Expedia Group CEO, will transition out of Tripadvisor, serving as an advisor through the end of the first quarter. Kaufer will head Tripadvisor Experiences for the next 90 days on an interim basis. Ben Drew, who was vice president of business development and strategy for Tripadvisor Rentals and Attractions, will become president of Viator and a member of the Tripadvisor executive leadership team.
Although Tripadvisor’s Experiences and Dining business segment saw profits fall 46 percent to $15 million in the third quarter, Kaufer said that Viator; Tripadvisor Experiences; The Fork (dining reservations); and Tripadvisor Restaurants, Media Advertising, as well as Hotel B2B Solutions are all “growing revenue lines that each exceed $100 million.”
The global tours and activities sector has entered an era of heightened competition with GetYourGuide and Klook receiving heavy venture capital funding, Airbnb entering the sector, and Booking.com building out its own experiences product aggressively. Tripadvisor had been the undisputed leader, but competitors, some with SoftBank money in the bank, have closed the gap.
While Tripadvisor, which acquired Viator for $200 million in 2014, managed to build the globe’s largest supply of tours and activities, Viator and Tripadvisor Experiences have fallen short in terms of booking growth and user experience.
TripAdvisor’s playbook, when it bought brands such as Flipkey for vacation rentals in 2008 and Viator for experiences in 2014, has traditionally been to downplay the acquired brands and to emphasize the TripAdvisor name instead. But the company recently has seen success operating its mostly European dining reservations platform, Lafourchette (The Fork), semi-independently, as well as Cruise Critic. It feels it can make strides with Viator in a somewhat similar manner.
Although Tripadvisor plans to trim its TV advertising spend, you can expect it will increase its brand marketing for Viator in 2020, albeit on platforms that might have larger traction with the next wave of travelers.
New Leadership in Asia-Pacific
In other leadership changes, Gary Fritz, who led Tripadvisor’s Asia-Pacific business and was a member of the executive leadership team, will leave Tripadvisor in the second quarter “and help us get our China joint venture (with Trip.com) off to a successful start,” Kaufer said. Kaufer described the company’s Asia-Pacific efforts until now as having had “limited funding.”
Under the reorganization, Lindsay Nelson, president of Tripadvisor Core Experience, becomes chief experience and brand officer with expanded responsibilities. Nelson will take over lead responsibility in Asia-Pacific, and Jane Lim, who heads operations in the region, will report to Nelson. Nelson will also head brand marketing, loyalty, and new ventures. She will be charged with growing advertising and media sales beyond travel in areas such as automotive and financial services, for example.
Kanika Soni, who heads accommodations, including hotel business-to-business initiatives at Tripadvisor, will continue to be the lead in that area but will also take on new portfolios as Tripadvisor’s chief commercial officer. Soni will lead product, search engine optimization, and performance marketing for Tripadvisor Rentals, Experiences, and Restaurants.
New Organizational Structure and Strategy
Among the changes, Tripadvisor is moving away from the corporate structure where each business unit — Hotels/Accommodations; Core Experience; Flights, Car, Cruise; Asia-Pacific; Experiences; and Restaurants had a president. The company, which believes it is making good on vows of $60 million to $80 million in run-rate reductions because of the reorganization, seemingly believes from the changes that the previous organizational setup lacked efficiencies as each business unit was vying for resources to improve its own profit and loss statement.
Tripadvisor’s new strategy is to focus on the product and booking experience across sectors such as experiences, restaurants, and accommodations; transform the TripAdvisor brand to make it more relevant for millennial and Gen Z travelers; continue to invest in business to business products for hotels and restaurants; speed the growth in the company’s non-travel advertising business, and build Viator as a separate brand.
TripAdvisor was informing employees about the layoffs as of Thursday afternoon except those in Australia and the United Kingdom, where labor laws require a more formal procedure about the potential impact of the cuts.
The 200 layoffs, which amount to about 5 percent of the employee roster, are believed to have taken a particular toll on the tours and activities supply team, among other areas of the company.
“As we shared at the last company meeting, we’ve made the difficult decision to say goodbye to a number of our colleagues as we look to reduce our overall cost structure and ready the company for sustainable future growth,” Kaufer wrote.
Tripadvisor plans to conduct another employee meeting next week to share more details about “our plans to return the company to long-term, sustained growth,” Kaufer said.
Tripadvisor shares traded up 30 cents on Thursday to $30.56.
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Photo credit: Shown here is Tripadvisor's corporate headquarters in Needham, Massachusetts. TripAdvisor