Skift Take

You can look for plenty of wheeling-dealing behind the scenes as Tripadvisor mulls taking Viator public and investigates alternatives with potential buyers or partners.

Tripadvisor said Wednesday that it filed a confidential S-1 draft registration statement with the U.S. Securities and Exchange Commission to conduct an initial public offering for its tours and activities brand, Viator. The move follows through on a pledge by Tripadvisor to create greater shareholder value.

A Viator IPO is not a done deal, however. In a shareholder letter about its fourth quarter and full-year 2021 financial results, Tripadvisor said taking Viator public would be subject to the SEC’s review, as well as an ongoing assessment of other strategic options and market conditions.

Tripadvisor said it has been discussing with industry players various options to capitalize on the strategic value of Viator, which is considered the industry leader.

The IPO would involve Tripadvisor selling to public shareholders a minority stake in Viator with Tripadvisor retaining control of the brand.

Tripadvisor signaled such a potential move in November when it said it was looking for ways to increase shareholder value through moves involving Viator, as well as its mostly European dining reservations brand TheFork.

Tripadvisor said Wednesday that it continues to mull options for TheFork, although these considerations aren’t as advanced.

In another move regarding Viator, Tripadvisor said that at the end of the first quarter, which terminates March 31, it could begin separately reporting segment results for both Viator and TheFork as separate businesses.

Tripadvisor currently lumps the two businesses together in its financial reporting, and has argued that the two brands, Viator and TheFork, get short shrift from the market in part because their respective business models are based on transactions rather than Tripadvisor’s mainstay advertising business model.

For full-year 2021, Tripadvisor’s experiences and dining segment saw revenue grow 65 percent to $307 million, but both sectors were hard hit by the pandemic and that figure was still only 67 percent of pre-pandemic 2019 levels. But that percentage figure was higher than Tripadvisor’s hotels segment, which only climbed back in 2021 to 58 percent of the 2019 mark.

Viator is considered the largest tours and activities business globally, but competitors such as GetYourGuide in Europe and Klook in Asia, and more recently Airbnb, have been gaining ground. Airbnb is a $100 billion public company, and both GetYourGuide and Klook are heavily venture capital backed, including funding from Softbank.

In 2018, Skift Research compared listings numbers from the six largest tours and activities companies, tracing their offerings to U.S. consumers in 100 of the largest global destinations. Skift Research found that “Viator had the highest number of listings for the cities we tracked.”

Lots has changed since 2018, but at that juncture Viator had 38,400 listings in those top 100 destinations compared with 14,000 for GetYourGuide, and 8,300 for Expedia.

Going public through an IPO would be yet another twist in the 27-year history of Viator, which was founded in 1995 — about five years before Tripadvisor. As an independent company, Viator had raised $20 million in funding, and struggled to find an exit strategy for its investors until Tripadvisor acquired it for $200 million in cash in 2014.

Along the way, there has been some confusion in the way Tripadvisor has managed Viator in terms of Tripadvisor at times emphasizing the Tripadvisor brand in tours and activities over its own Viator brand.

The news about Viator took place as Tripadvisor was caught up in what it called “an inflection point of senior leadership change,” a reference to Tripadvisor announcing in November that the company’s only CEO in its 22-year history, Steve Kaufer, would step down from his post in 2022.

Tripadvisor did not name Kaufer’s replacement Wednesday, and the search presumably continues.

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Tags: ipo, tripadvisor, viator

Photo credit: Viator Dubai Desert Experiences

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