Viator’s revenue surpasses brand Tripadvisor for first time in Q3

Tripadvisor’s experiences brand, Viator, has been on a steady growth trajectory since the pandemic and in the three months ending September 30 its revenue surpassed that of brand Tripadvisor for the first time since the company began separating the two lines of business in its earnings reports.

With revenue of $270 million in Q3 this year— up 10% year over year — Viator accounted for 51% of Tripadvisor’s total revenue of $532 million. Gross booking value for experiences grew 9% in the quarter to nearly $1.1 billion, and adjusted EBITDA for Viator was $30 million, or 11% of revenue, compared to 7% of revenue in the same period last year. 

Viator’s figure includes contributions from both Viator and Tripadvsior B2C points of sale of experiences as well as B2B offerings for operators and third-party distributors. 

“Our ambition is to extend our leadership position in this large an expanding market with our scaled global platform and attractive financial profile,” said Matt Goldberg, Tripadvisor CEO in a call with analysts to discuss the quarterly results.

“This is one of the most exciting opportunities in travel given the secular tailwinds, low online penetration and the growing recognition of experiences as the most meaningful and important part of travel. This positions experiences to grow faster than the travel industry as a whole over the foreseeable future.”

Tripadvisor reported Viator has more than 350,000 bookable experiences, more than 55,000 operators and more than 4,000 demand partners. And chief financial officer Mike Noonan said Tripadvisor’s experiences business benefits from having two “unique assets” — brand Tripadvisor’s broad reach upper funnel and Viator’s ability to reach high-intent travelers as an online travel agency — that give it an advantage for future growth.

Looking ahead, Goldberg said the company sees multiple opportunities to expand its position in experiences, including reaching new source markets, adding new categories of supply, geographic expansion through partnerships and new B2B sellers. 

“There is a lot of enthusiasm about how we are positioned and what 2025 will bring,” Goldberg said. 

Brand Tripadvisor

The enthusiasm was a bit more tempered regarding brand Tripadvisor, the company’s core metasearch and travel guidance platform, which just a few years ago delivered nearly all of the company’s revenue.

Brand Tripadvisor’s revenue came in at $255 million in the quarter – just under 48% of the company’s total revenue and down 12% year over year. 

Adjusted EBITDA for brand Tripadvisor in Q3 was $87 million or 34% of revenue, above expectations. Within brand Tripadvisor’s figures, revenue from branded hotels was down 17% year over year in the quarter to $151 million and revenue from media and advertising was $40 million, up 5% year over year.

“We continue to work to transform the business and shift from our historical reliance on the profitable but pressured legacy hotel meta offering,” Goldberg said.

Goldberg said the company is addressing the “well-known headwinds” by improving Tripadvisor’s travel planning and guidance capabilities, growing engagement through its mobile app and optimizing conversion in hotel and experiences booking capabilities. 

In August Tripadvisor launched in-app hotels bookings through a partnership with Hopper Technology Solutions. 

“As we continue to scale in-app hotel booking in the U.S. we are seeing higher click through rates, 4X better monetization per booker and significantly higher experiences revenue and review and photo submission versus in-app meta,” Goldberg said. 

The company is also enhancing its offerings for members, including rewards and promotions and member-only capabilities such as AI-powered trip planning and the in-app hotel booking.

“We expect Tripadvisor to be increasingly focused on a streamlined set of priorities, including further differentiating our brand and content around planning and guidance, driving booking growth in our experiences and hotels categories — especially in app — and enhancing our membership offerings to reward engagement and drive monetization,” Goldberg said.

Goldberg said he is pleased with the progress the company has made on implementing a new strategy for brand Tripadvisor, which he initially outlined in February 2023, noting the business has “stabilized and returned to growth,” but he acknowledged they are all “impatient to translate that progress into financial performance at scale.”

Consideration of “strategic alternatives” ongoing

In February Tripadvisor formed a special committee to help it evaluate potential “strategic transactions.” That came after Liberty Tripadvisor Holdings, which has held a controlling interest in Tripadvisor since that company’s initial public offering in December 2011, announced in an SEC filing that its board gave approval to “engage in discussions with respect to a potential transaction.” 

In his opening remarks to analysts on the call Wednesday, Goldberg said this exploration of alternatives is still underway and that is why there had been no share repurchase activity in the third quarter.

When asked to provide more detail by analyst Richard Clark of Bernstein regarding restrictions on the company’s ability to buy back shares, Goldberg said, “Obviously, given our limited participation, we just want to be clear that there are a variety of reasons at any given time why we might be limited in our ability. And one of these reasons is the ongoing consideration of a variety of potential strategic alternatives. But we really can't get into any of the details more than what we've said.”

In his analysis of Tripadvisor’s Q3 results, BTIG managing director and digital services analyst Jake Fuller wrote that the fact the special committee remains active is a positive sign, along with positive guidance for Viator and TheFork, which saw its revenue grow by 17% year over year in the quarter to $49 million.