Viator continues to become a more valuable asset for Tripadvisor.
In the second quarter this year Viator brought in $216 million in revenue – up from $136 million in Q2 2022 – and accounted for 43% of Tripadvisor’s total revenue.
That’s a notable change from one year ago when Viator accounted for just 32% of revenue. Prior to Q2 2022, Tripadvisor did not provide a breakdown of revenue for Viator.
The Tripadvisor Core segment – which includes its hotel metasearch, Tripadvisor experiences and dining and other offerings such as cruises, rental, flights and cars – was nearly flat year over year for revenue, at $279 million compared with $274 million in 2022. Within the core segment, revenue from experiences and dining was $50 million, up 43% year over year, which helped to offset a decline in branded hotels revenue of 7%. And Tripadvisor reports hotel meta revenue was down in the low single digits in the United States and Asia Pacific and down even more in Europe.
In a statement accompanying the results, Tripadvisor chief financial officer Mike Noonan said, “Our experiences category outperformed, while the rest of the business delivered largely within expectations with the exception of our European-sourced hotel revenue.”
Revenue for TheFork, a restaurant booking platform primarily used in Europe, was $38 million in Q2, up 19% year over year.
Total revenue for Tripadvisor in the second quarter came in at $494 million, up 18% year over year, and adjusted EBITDA was $90 million, 18% of revenue and down 17% compared with Q2 2022.
“We delivered healthy revenue growth on a consolidated basis, most notably in our experiences offerings, where we are pleased with our strong performance and market leadership in a large and growing category,” said Matt Goldberg, CEO of Tripadvisor.
And the company still sees substantial opportunities for future growth for Viator. Speaking at Phocuswright Europe in Barcelona in June, Viator president Ben Drew discussed the fact that still only a small segment of the total tours and activities sector is managing bookings online.
“One of the most incredible things about this industry that’s different to all the other travel industries, or many other ones, is that roughly three in every four dollars that goes through this industry is still offline,” Drew said. “It doesn’t even touch the internet in 2023. We’re talking about ChatGPT and robots taking over the world, and we haven’t even got three out of four people using the internet in tourism experiences yet.”
Tripadvisor’s selling and marketing costs were $270 million for the second quarter. That’s an increase of 24% year over year and 55% of Q2 revenue, up slightly compared with 2022, which the company said was “primarily due to an increase in Viator marketing costs, which includes brand spend.”
Last month Tripadvisor added a travel itinerary generator that is powered by OpenAI’s generative artificial intelligence technology.
The product, currently in public beta and accessible via desktop and mobile web to users in the U.S., analyzes Tripadvisor’s more than 1 billion user-generated reviews and opinions to create day-by-day itineraries based on the user’s input of a destination, travel dates, who they are traveling with and the types of activities they are interested in.
“Our teams continue to focus on product innovation, including the launch of our generative AI-driven trip planning tool as the most recent example of how we plan to deliver against our engagement-driven strategy,” Goldberg said.
“As we look to the second half of the year, we will take an approach that balances financial discipline with executing our strategic priorities.”
Tripadvisor’s earnings statement also mentions that the company implemented cost-savings measures, including a reduction in head count, primarily with the Tripadvisor Core segment that should be completed by the end of this year and that it expects will result in $35 million in annualized cost savings.
“We have initiated cost savings actions that will provide flexibility in prioritizing our strategic investment as we finish 2023, plan for 2024 and bolster our path to our long-term financial objectives,” Noonan said.
