Skift Take

Boosting tour visibility can yield profits for Viator, but the benefit to operators may lessen if most operators join in. It's a bit like when people in the front row of a concert stand up and everyone else has to stand up.

Tripadvisor’s Viator has long been one of the largest online travel agencies for tours and activities. But to juice its revenue, it began letting tour operators spend more for better placement in Viator search results.

So, how lucrative is it?

Viator’s Accelerate program started in February 2022, and it’s still too early to call it a success. It recently introduced a beta 2.0 version available in the U.S. but has yet to launch it in all markets.

The upgraded service is seeing wider adoption among tours and attractions operators that list over 300,000 tours with Viator.

“The program’s upgrade to Accelerate 2.0 has further driven operator participation, with significant double-digit growth in product opt-ins and an increase in the weighted average margin,” said Matthew Goldberg, Tripadvisor CEO, during an investor update Tuesday. “This has resulted in improved take rates, indicating a successful exchange of higher commissions for greater exposure and business growth on Viator’s platform.”  

“More than half of eligible products are now opted into the program,” said Goldberg.

Standing Out with Accelerate?

All operators with products listed on Viator are eligible to add active tour products to the program. Tours need to meet eligibility criteria set by Viator, broadly defined as “good or excellent quality levels and one active review.”

Eligible tours are seen on the operator’s Accelerate dashboard, which then tracks the impact of their increased exposure. By raising the commission rates they pay, operators can expect more prominent placement on results pages for relevant Viator tours and activities searches. Viator claims participants see a 15% increase in bookings.

The screenshot below is from Viator’s own explainer video published a year ago, detailing a visibility metric assigned to tours with increased commission rates to secure more visibility on related Viator searches.

Some industry observers have expressed concerns about what they get for increasing the commissions they pay.

In an example shown to Skift, a listed San Diego tour had a visibility score of 84. In contrast, an average competitor to this tour had a visibility score of 38, and the top competitor in the category had a visibility score of 99.

Viator doesn’t define how it reaches the visibility score. One operator called it a “nonsense metric” because it doesn’t demonstrate how the tour will be seen by more potential customers searching for tours and activities on the platform.

Skift has reached out to Viator for added detail on its Accelerate 2.0. program.

A Switch to Ad Impressions for Higher Commissions

One of the differences between Accelerate 2.0 and its original version is the change from a visibility score to an advertising impressions metric. 

The ad impression metric on Accelerate 2.0 also works with a sliding tool, as shown in the video screengrab above, to increase the take commission rate to be paid for better placement on Viator search results pages.

The Ad Impression metric details the number of advertisements to be served to relevant searches, with the following impressions shared as an example for a sample San Diego tour:

  • Increasing the tour’s commission from 25% to 26% results in an allocation of 60 ad impressions per month. This is opposed to organic search display for tours on the platform, not opted into the Accelerate program.
  •  At a commission rate of 31%, ad impressions increase to 180 per month.
  •  Competitor ads are no longer displayed once the commission rate reaches 42%.
  •  The tool restricts the commission rate for Viator to 50%. 

This is considered a far more tangible metric compared to the visibility score. So, while operators in the Accelerate program 2.0 can remove competitor ad displays, this option isn’t available in the standard program. This means operators have been opting into the program and paying higher commissions for increased visibility, even when their listings may still be accompanied by competitor ads that could potentially divert customers from their offerings.

Booking Conversion Transparency

Viator’s upgrades to Accelerate are intended to create more clarity and transparency in its effectiveness, but it raises added questions.

Operators would find it helpful to know how increased exposure through ad impressions converts into actual bookings. This needs to be clarified on the 2.0 version of the program. Another question raised is whether the increased commission is charged across all tour bookings for the tour or only bookings made through Accelerate adverts served. The tool is in beta mode, which means more transparency could still be in the works.

Tripadvisor expects Viator to hit full-year profitability in 2024. Viator reported a 41% increase in revenue in the third quarter, accounting for nearly half of Tripadvisor’s total quarterly revenue.

Cruise and Tours Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of cruise and tours sector stocks within the ST200. The index includes companies publicly traded across global markets including both cruise lines and tour operators.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more cruise and tours sector financial performance.

Read the full methodology behind the Skift Travel 200.


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Tags: advertising, earnings, experiences, online travel agencies, tripadvisor, viator

Photo credit: People walking across a bridge during a Columbia Ice Tour. Andy Holmes / Unsplash

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