Viator is the star performer in the Tripadvisor portfolio, and after trying for a time to focus on the Tripadvisor experiences brand instead, it might be time that CEO Matt Goldberg went all in on the brand bringing in the money.
It’s been eight years since Tripadvisor took over Viator. And while Tripadvisor at one point downplayed Viator as an acquired brand, Tripadvisor could now be changing tack with its current two-brand experiences strategy.
In 2017, longstanding Viator executives left the company, highlighting the tension caused by Tripadvisor handing over the management and control of its attractions offering to what was then its vacation rentals team. Fast forward to 2023, and Tripadvisor is pushing two experiences brands by actively marketing Viator, while still keeping Tripadvisor Things To Do.
For example, in the fall of 2022, Tripadvisor launched a “Do More with Viator” marketing campaign. Viator spokesperson Laurel Greatrix said the campaign contributed to Viator’s 2022 growth to reach more customers and, ultimately, achieve higher revenue and gross booking values.
As a result, Viator is emerging as a star performer for Tripadvisor. Despite a reported loss of $11 million in the fourth quarter, Viator is the furthest ahead of the anything else in Tripadvisor’s brand portfolio when compared to the same period in 2019, as detailed in Tripadvisor’s financial results for the fourth quarter and full-year 2022.
Viator delivered record revenue and scale. Its revenue grew by 208 percent compared to 2019 to $127 million in the fourth quarter in 2022 and its gross bookings reached $600 million, some 220 percent of 2019 for the same period . Its overall gross bookings value was approximately $2.7 billion in 2022 or 186 percent of 2019.
But Tripadvisor seems intent on extracting as much benefit from the two-branded approach as opposed to a full throttle-push behind one brand, even though technically, from the backend, it already is.
Room to Grow Viator Awareness
Off the back of Viator’s strong fourth quarter performance, supported by this change in approach of a standalone push of Viator, Greatrix admitted there remains room to grow Viator’s brand awareness.
Tripadvisor CEO Matt Goldberg said the company’s performance was “led by its experiences offering at both Viator and Tripadvisor Core, as well as hotel meta” and that the company would continue to spend on performance marketing to attract experiences on TripAdvisor core, in response to analysts during the company’s recent earnings call.
Goldberg, in the role for less than a year, recognized the challenges handed to him by his predecessor amidst a large, highly fragmented and underpenetrated experiences market, which he said is estimated to “grow to more than $275 billion by 2025.”
“So experiences on Tripadvisor Core is a great opportunity for us. It’s a very different platform, obviously, than Viator, where people are coming to Viator for very specific booking transaction. Tripadvisor Core has a lot of different traffic that comes to us for very, very different reasons. And part of the opportunity for us, I think, as part of our strategy overlay of how to bring those into monetizable channels. So we do spend performance marketing to attract experiences on TripAdvisor core. And again, I think there’s a huge opportunity for us to continue to find ways to increase that,” he said.
A Powerful Distribution Platform With an Audience Matching Problem
Understanding and maximizing where a Tripadvisor customer ends, a Viator one begins and how to turn them into loyal customers who make repeated bookings has always been the problem to solve, since the acquisition in 2014.
TripAdvisor does not break out its traffic sources for Tripadvisor Experiences and Viator but SimilarWeb shows Tripadvisor as the parent company has the most significant audience, more than 5 times that of Viator. While Viator’s estimated 20 million monthly visitors are there to book experiences, TripAdvisor’s propriety sits in its upper-funnel travel inspiration and trip planning for its more than 160 million visitors per month.
Operators who sign up with Viator gain access to the platform’s direct audience as well that of its parent company. Add to this the demand for its extensive partnerships, as Viator powers the front-facing experience of some of the biggest names inside and outside travel, such as Expedia, Booking and Uber.
So for all intents and purposes, Viator and Tripadvisor have a traditional third-party reseller relationship as with those mentioned above, one that would continue if TripAdvisor did eventually offload Viator according to Goldberg. The company confirmed there were, however, no further updates on IPO plans for Viator.
For now it adds the benefit of a booking engine solution for Tripadvisor’s millions of users, albeit with the need for them to be more effectively converted into purchasing customers.
A former Tripadvisor employee, who was part of the significant job cuts the company undertook just ahead of the pandemic in 2020, suggested it was a mistake to assume Tripadvisor’s vast audience, which is said to be firmly in the research phase of their holiday on Tripadvisor, would automatically shift to pulling out their credit cards to purchase an experience. TripAdvisor’s longstanding co-founder and former CEO Stephen Kaufer believed otherwise.
So what started as Tripadvisor making a play towards monetizing its audience with the rebranding of TripAdvisor Things To Do in 2017 has since morphed into a two-brand strategy that has matured with Viator as the gross-booking cash cow, and Tripadvisor still wanting to eat its Things-To-Do cake.
The Struggle to Grow Market Share
Viator, founded in the mid-1990s, had previously struggled to grow and maintain its market share, despite being a major player in the travel activities space. Again, this draws on Tripadvisor’s eight-year strategy of favoring the parent brand’s experiences.
Grumbles exist amongst operators who claim the platform carries legacy issues that require a degree of modernization. One tours and activities business Skift spoke to highlighted the difficulty in customizing details on the auto-generated booking confirmation form shared with travelers.
So while Viator’s parent company is now investing in direct marketing to grow brand awareness, there also appears to be scope for refurbishing its backend system powering both brands and its partnerships.
The backend system also lacks defined filters to allow this particular operator to sift through large batches of bookings according to its tour categories, instead of the current bucket catchment. But the operator, who took Skift through their backend Viator system and preferred not to be named, said it was an inconvenience they put up with as the platform generated a significant portion of its bookings.
When asked about Viator’s tech modernization, Greatrix referenced the company’s Accelerate program, first rolled out as a pilot in select North American and European markets in late 2021. But she didn’t expressly state how, or if at all, the program addresses the noted issue.
Greatrix maintained that Viator’s distribution strategy, or in this case its two distinct experience brands, focuses on getting its 50 000-plus operators to reach travelers more accurately across their planning and research journeys.
“Viator is focused on driving lifetime value of our travelers – that means creating a site and app experience that’s worthy of traveler attention, earns their bookings, and brings them again and again.”
CORRECTION: An earlier version of this story misspelled the company name Tripadvisor multiple times. The “a” in Tripadvisor is lowercase. A reference to no further Viator IPO plans has also been updated.
Photo credit: Man on a bridge in Oberland, Switzerland. Source: Unsplash Fabio Comparelli. Unsplash / Fabio Comparelli. Unsplash