Tripadvisor Stock

Tripadvisor, Inc. (Tripadvisor) operates as an online travel company worldwide.

The Tripadvisor group operates as a family of brands with the purpose of connecting people to experiences worth sharing.

The company operates across three business segments: Brand Tripadvisor, Viator, and TheFork. The company leverages its brands, technology platforms, and capabilities to connect the company’s large, global audience with partners by offering rich content, travel guidance products and services, and two-sided marketplaces for experiences, accommodations, restaurants, and other travel categories.

The Tripadvisor brand has developed a relationship of trust and community with travelers and experience seekers by providing an online global platform for travelers to discover, generate, and share authentic user-generated content (‘UGC’) in the form of ratings and reviews for destinations, points-of-interest (‘POIs’), experiences, accommodations, restaurants, and cruises in over 40 countries and in more than 20 languages across the world. Tripadvisor offers more than 1 billion user-generated ratings and reviews on over 8 million experiences, accommodations, restaurants, airlines, and cruises. Tripadvisor’s online platform attracts one of the world’s largest travel audiences, with hundreds of millions of visitors annually.

Viator’s purpose is to bring extraordinary, unexpected, and forever memorable experiences to more people, more often, wherever they are traveling. In doing so, Viator elevates tens of thousands of businesses, large and small. Viator delivers on its purpose by enabling travelers to discover and book iconic, unique and memorable experiences from experience operators around the globe. The company’s online marketplace is comprehensive and easy-to-use, connecting millions of travelers to the world’s largest supply of bookable tours, activities and attractions—over 350,000 experiences from more than 55,000 operators. Viator is a pure-play experiences online travel agency (‘OTA’) singularly focused on the needs of both travelers and operators with the largest supply of bookable experiences available to travelers.

TheFork’s purpose is to deliver happiness through amazing dining experiences. TheFork delivers on its purpose by providing an online marketplace that enables diners to discover and book online reservations at approximately 55,000 restaurants in 11 countries across the U.K., western and central Europe. TheFork has become an urban, gastronomic guide with a strong community that offers approximately 20 million restaurant reviews.

In 2022, the company generally experienced a travel demand recovery fueled by the continued easing of government restrictions globally and increasing consumer travel demand. During 2023, the company continued to experience strong consumer demand for its offerings, particularly for the company’s experiences offerings across its Viator and Brand Tripadvisor segments. Consumers will continue to seek connection with others, discover new places, and experience new things through travel.

Business Strategy

The Tripadvisor group operates in a unique position in the travel and experiences ecosystem:

Large, global, and growing addressable markets, including travel, experiences, and digital advertising;

A large, global, and engaged audience making meaningful contributions that reinforces a relationship of trust and community; and

A wealth of high-intent data that comes from serving the company’s audience of travelers and experience seekers at different points along their journey - whether they are engaging on the company’s platforms for inspiration on their next experience, planning a trip, or making a purchasing decision.

In the company’s Brand Tripadvisor segment, the company offers a compelling value proposition to both travelers and partners across a number of key offerings that include accommodations, experiences, dining, and media. This value proposition is delivered through a collection of durable assets that is difficult to replicate: a trusted brand, authentic UGC, a large community of contributors, and one of the largest global travel audiences. The company’s strategy in this segment is to leverage these core assets, as well as the company’s technology capabilities to provide travelers with a compelling user experience to help make the best decisions in each phase of the travel journey, including pre-trip planning, in-destination, and post-trip sharing. The company intends to drive new traveler acquisition and repeat audience engagement on the company’s platform by offering meaningful travel guidance solutions and services that reduce friction in the traveler journey and create a deeper, more persistent relationship with travelers. The company evaluates investment opportunities across data, product, marketing, and technology that will improve and diversify the monetization of its audience through deeper engagement, which, in turn, the company expects will drive more value to its partners.

The Brand Tripadvisor segment plays an important role in the company’s portfolio. The company has built difficult to replicate assets, such as a trusted brand, authentic content, a large community of contributors, and one of the largest global travel audiences available. The company’s long-term strategy for the Brand Tripadvisor segment builds on its heritage and the reasons hundreds of millions of travelers come to Tripadvisor each year.

In the company’s Viator and TheFork segments, the company provides two-sided marketplaces that connect travelers and diners to operators of bookable experiences and restaurants, respectively. Within the company’s Viator segment, the company is investing in growth, future scale, and market share gains to accelerate its market leadership position. The company’s investments on both sides of its marketplace, as well as in its primary offerings, are intended to deliver a differentiated value proposition that will drive sustainable market leadership as the company’s partners, operators, and travelers find themselves in an increasingly competitive marketplace environment. The company is focused on continuing to grow both its supplier base and the company’s user base by offering innovative tools and features on its branded platforms, and through continued awareness of the company’s brand through marketing efforts.

The company is focused on executing initiatives across the Tripadvisor group through organic investment in data, products, marketing and technology to further enhance the value the company delivers to travelers and partners across the company’s brands, platforms, and segments. In addition, the company may accelerate growth inorganically by opportunistically pursuing strategic acquisitions.

Business Models

The company manages its Brand Tripadvisor segment primarily through the following revenue sources and related business models:

Tripadvisor-branded Hotels Revenue: The largest source of Brand Tripadvisor segment revenue is generated from click-based advertising on the company’s hotel meta platform (also referred to as the company’s hotel auction), which primarily consists of contextually-relevant booking links to partner websites, which predominantly include OTAs and hotels. The company also generates click-based advertising revenue on a cost-per-acquisition (‘CPA’) basis, with payments from partners determined by a contractual commission rate based on a traveler click generated on the company’s platform that ultimately results in a hotel booking and stay via the partners’ websites.

The company provides additional business-to-business (‘B2B’) offerings to hotels and related accommodation partners that deliver other unique opportunities to further promote, advertise, and operate their businesses, as well as merchandise their inventory on the company’s platform. These include a subscription-based advertising solution, with revenue determined by a contractual fee and time duration, or other CPC-based advertising services through hotel sponsored placements on the company’s platform.

Media and Advertising Revenue: The company offers endemic and non-endemic advertisers opportunities to promote their brands primarily through display-based advertising (or ‘media advertising’) placements across the company’s brands on its platform. The company’s advertising clients are predominantly direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations (‘DMOs’), OTAs, and other travel related businesses. Display-based advertising placements are predominantly sold on a cost per thousand impressions (‘CPM’) basis.

Tripadvisor Experiences and Dining Revenue: The company merchandises, on the Tripadvisor platform, bookable experiences available on Viator and bookable dining reservations available on TheFork and earn affiliate marketing commission revenue on bookings that are driven by the company’s platform, which are fulfilled by Viator and TheFork, respectively.

The company provides additional B2B offerings to restaurant partners that deliver other unique opportunities to further promote, advertise, and operate their businesses, as well as merchandise their businesses on the company’s platform. These offerings can be subscription-based, with revenue determined by a contractual fee and time duration, or CPC-based advertising services through restaurant sponsored placements on the company’s platform.

Other Revenue: The company provides travelers additional offerings across various other travel categories, including alternative accommodations (e.g., short-term vacation rentals), cruises, flights, and rental cars. The company provides these offerings across a collection of brands that complement and reinforce the company’s segment strategy of providing differentiated guidance that helps travelers reduce friction and make better decisions. The company’s alternative accommodation rentals platform is a two-way marketplace that connect travelers with owners and operators of short-term rental properties, generating commission revenue from both the traveler and the property owner for each booking the company facilitates across its branded platforms. The company’s cruise, flight, and rental cars offerings generate revenue primarily through click-based and display-based advertising opportunities.

The company’s Viator segment offers travelers a comprehensive online marketplace that provides access to over 350,000 experiences and more than 55,000 experience operators. These experiences are instantly bookable online in over 200 countries. The company’s business model relies on the success of travelers and operators who join its marketplace and generate consistent bookings over time. As experience operators become more successful on the company’s platform and as travelers return over time, the company benefits from the recurring activity on its marketplace. The company generates revenue through commissions for each booking transaction the company facilitates directly and indirectly through its platform. Through Viator, the company also powers traveler experience bookings on behalf of third-party distribution partner websites, including the Tripadvisor platform, as well as many of the world’s major OTAs, airlines, hotels, online and offline travel agencies, and other prominent content and eCommerce brands. For the majority of experience bookings, the company collects the full amount charged to the traveler at the time of booking and remits the operator’s portion after the booked experience occurs. In addition, Viator offers the company’s ‘Reserve Now, Pay Later’ payment option, which allows the company’s travelers the option to reserve certain experiences and defer payment until a date no later than two days before the experience date.

TheFork segment offers travelers and diners a comprehensive online marketplace that provides access to approximately 55,000 restaurants to discover and book reservations in 11 countries across the U.K., western and central Europe. The company primarily generates revenue for each booking reservation the company facilitates on its platform, calculated on a per seated diner fee basis and paid for by the restaurant partner. The company also generates revenue on a subscription basis from restaurant partners by providing, for a fee, access to premium online reservation booking software and related services offerings to help them more effectively and efficiently manage their business.

Seasonality

Consumer travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partner advertising investments, and therefore the company’s revenue and operating profits, have also historically followed a seasonal pattern. The company’s financial performance tends to be seasonally highest in the second and third quarters of a given year (year ended December 2023), which includes the seasonal peak in consumer demand, including traveler accommodation stays, and travel experiences taken, compared to the first and fourth quarters, which represent seasonal low points. In addition, during the first half of the year, experience bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.

Marketing

The company has established world-renowned, widely used, and recognized brands through the implementation of marketing and promotional campaigns. Particularly, the company has been successful with the strategic use of a number of online and offline marketing channels to reach travelers and diners, including the company’s own platform channels (i.e., websites and apps), online search engines (primarily Google), social media, email, media via public relations, partnerships, and content distribution. The company continues to focus on its ability to attract and engage new and repeat users and encourage users to directly visit the company’s websites and apps. The company has the ability to manage its marketing investments across the company’s portfolio of brands to optimize results for the company.

Competition

Across the company’s three segments, the company primarily competes, and in some cases partner, with the following businesses:

General OTAs, such as Expedia, Booking Holdings, Airbnb, traveloka, Despegar, Trip.com, and their respective subsidiaries and operating companies;

Experiences OTAs, such as GetYourGuide, Klook, and TUI Musement;

Hotel metasearch providers, such as trivago, Kayak and Skyscanner;

Online search, social media, and marketplace platforms for advertising spend, such as Google, Facebook, Twitter, Pinterest, and Snap;

Emerging online advertising businesses, such as ad-supported retail and entertainment platforms like Amazon, Spotify, and Walmart; and

Global and regional restaurant technology providers for reservation management and related services, such as OpenTable, Resy, and Tock.

Commercial Relationships

The company has commercial relationships with a majority of the world’s leading OTAs, as well as thousands of other travel partners, pursuant to which these companies primarily purchase traveler leads from the company, generally on a click-based advertising basis.

For the year ended December 31, 2023, the company’s two most significant travel partners were Expedia (and its subsidiaries) and Booking (and its subsidiaries), each of which accounted for 10% or more of the company’s consolidated revenue and together accounted for approximately 25% of the company’s consolidated revenue, respectively.

Intellectual Property

In connection with the company’s copyrightable content, the company posts and institutes procedures under the U.S. Digital Millennium Copyright Act and similar ‘host privilege’ statutes worldwide to gain immunity from copyright liability for photographs, text and other content loaded on the company’s platform by consumers.

Regulation

The E.U., in May 2018, adopted the General Data Protection Regulation, or GDPR, which requires companies, including the company, to meet enhanced requirements regarding the handling and storage of personal data.

History

TripAdvisor, Inc. was founded in 2000. The company was incorporated in 2011.