Tripadvisor lags rivals Airbnb, Booking and Expedia in its pandemic recovery, but expects to surpass 2019 revenue in the next few months.
Tripadvisor’s new CEO Matt Goldberg said he wants to make the company more data-driven and improve execution, and the chief financial officer cryptically floated the possibility that the company would consider making acquisitions to complement its Viator and TheFork brands, or other parts of the business.
“I was also energized by the potential of our data assets to create a better experience for consumers and enable all areas of the company,” Goldberg said during his first earnings call with analysts Friday as Tripadvisor CEO after succeeding Steve Kaufer, who left June 30 after a 22-year run. “Having spent a number of years leading advertising, content and commerce businesses enabled by data, I’m confident that our data can help us drive deeper consumer insight and higher levels of engagement, create further operational agility as well as identify meaningful commercial opportunities.”
With only a month at the helm, Goldberg was short on specifics about strategy changes, but he cited his experiences at Lonely Planet (2009-2013), and the Trade Desk (2020-2022) as equipping him to handle digital transformation and to better leverage the use of data in an advertising environment.
On the issue on what Tripadvisor will do with its subscription business, Tripadvisor Plus, Goldberg acknowledged that it didn’t reach some of its expected goals.
“But, of course, I come from a subscription background in my time with Dow Jones and The Wall Street Journal,” he said. “And so this is an area I plan to dive into. And I don’t want to get ahead of myself on a timeline, but what I will say is that it will be a priority area of focus as we dive into strategy.”
In addition to having a new boss, Tripadvisor recorded two other firsts: As part of changing its segment reporting structure, the company separately published the standalone financials of tours and activities brand Viator and dining reservations platform TheFork. Previously they were lumped together in an experiences and dining segment that provided less visibility into their performance.
Viator is the strongest growing part of Tripadvisor. Viator’s second quarter revenue grew 240 percent year over year to $136 million with improved demand in European travel part of the reason. While Tripadvisor’s core business — hotels and business subscriptions — reached 99 percent of 2019 revenue, Viator stood out in the second quarter by surpassing the same period in 2019 by 160 percent. Viator, however, is still in investment mode and broke even on an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) basis in the quarter.
Chief Financial Officer Ernst Teunissen said while pre-pandemic Viator mostly benefited from Americans and Brits traveling to Europe, it is now capturing travelers staying in North America and booking tours.
“So we’re getting the double benefit of now two big markets, where we only had one before,” Teunissen said. “We have U.S. to Europe before. Now we have U.S. to Europe as well as North America to North America as a very, very strong market.”
Tripadvisor previously advanced the idea of spinning out Viator to increase shareholder value, but didn’t make any news on that front this week other than to state in the second quarter shareholder letter that “there are multiple opportunities to crystalize value.”
Dining reservations platform, TheFork, meanwhile, which is largely based in Europe, has been hurt by a lack of recovery in restaurants there, but things are improving, officials said.
TheFork narrowed its net loss in the second quarter to $7 million, from $11 million in the red a year earlier, but its revenue jumped 78 percent to $32 million, exceeding the same period in 2019.
An analyst asked how Tripadvisor might return capital to shareholders in light of Tripadvisor having $1 billion in cash on its books at the end of the second quarter.
“We have indeed a considerable cash balance,” he said. “And we are evaluating all the different ways of how we can go about that cash, either keep it in reserve for a while, earmark it for acquisitions. We have, obviously, attractive businesses that might be complemented with acquisitions. And then we have options around delivering or equity repurchases.”
For the company as a whole, Tripadvisor revenue in the second quarter was 99 percent of the same period in 2019. The company generated $417 million in revenue, which was a 77 percent year over year increase.
Tripadvisor generated $31 million in net income in the second quarter, driven by that increased revenue, versus a $40 million net loss a year earlier.
Tripadvisor’s core business — namely its metasearch auction, business listings, and some tours and activities and dining reservations made through the Tripadvisor brand — was the slowest part of the company’s recovery when compared with Viator and TheFork.
Revenue in this core part of Tripadvisor’s business in the second quarter was only 89 percent of the same period in 2019, and this was largely due to Tripadvisor’s dependence on hotels, and relative lack of strength in vacation rentals.
Still, officials were optimistic about the company’s prospects, and other than weakness in early July, they’ve seen little to stymie the increase in travel demand despite macroeconomic conditions.
Tripadvisor said it expects its third quarter revenue to surpass the 2019 mark by a mid- to low-single digit percentage.
Correction: Goldberg began working at the Trade Desk in 2020, not in 2021 as initially reported.
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Photo credit: Tripadvisor's Viator brand is the fastest growing part of the business. Pictured is a Dublin bus tour in 2013. https://www.flickr.com/photos/18378305@N00/10520024024/in/photolist-h2BSCy-7P9Kd4-UaYRFU-ChMq3R-fnRcdN-bZXPQ3-21ToPjC-fuLzx-hcuAWN-21o4bTN-DNnGFy-c8JM8f-D66M9F-odDL4Q-21WggpR-SnyAuG-4QoB71-HbHXGf-Ey1qhR-cqehPj-dfp9jb-vYVzdZ-25Uym8s-ZzPTpv-H2xswR-bLGTei-HHui36-PcF41r-DDAhkz-24frQKo-JmR7D5-4MSWaJ-hcuJ6Y-6RUA6z-CTL7Ld-exgmSc-ZxENb4-DDAfRc-29YsHok-25Uyq29-dbhCu7-26qT1go-26qSW3J-2719ktT-24fsGTj-26WepD1-DvjVBK-CG5DuY-JmR8DS-2ccF7E9