Our long nightmare is over. Tours and activities finally gets the big market move it has so desperately needed: TripAdvisor has snapped up Viator.
First, a hats off to the team: perservering since its founding by Rod Cuthbert in 1995 is a feat unto itself - it’s extremely rare for a funded company to be able to be this patient for an exit. Well done.
Also a big congrats to TripAdvisor for having the foresight to make a proper entry into this space. It’s obvious this acquisition will put them way, way, way ahead of other major OTAs when it comes to T&A, with no other obvious acqusition target to play catchup with.
Ask any supplier: The only distributor that suppliers will bend over backwards for is now in the hands of TripAdvisor.
But beyond the congratulations, let’s take a look at what this will mean more broadly. A new wave of startups? The end of vouchers? Other major efforts by competing OTAs?
Perhaps all of those. Most importantly, I believe TripAdvisor’s new position will enable it to push the market forward sooner rather than later in the following key areas:
● Technology
● Marketing
● Distribution
Let’s dig into those one by one:
Technology
By many accounts, Viator has been significantly investing in its technology in recent years. Its mobile applications are great and it has made significant progress in enabling close-in and last-minute bookings.
This has all been due to the (some might say obvious) realization that the only way to get suppliers to do anything differently is to bring them sales. And Viator, as the market leader, has been able to flex that muscle.
But, TripAdvisor represents a whole other level of brand for suppliers to deal with: some might call it No More Mr. Nice Guy. “You want to work with us? Here’s how it’s going to be…” is not an unreasonable way to put it. And while this might worry some suppliers, for the market, this is going to be a major positive.
Quite frankly, years after we’ve all made it obvious that technology is the #1 inhibitor to moving a lot more sales online, suppliers, for the most part, still haven’t gotten the message.
Notable exceptions such as Gray Line aside, there are still far too many mom and pop shops that label technology as “inconvenient” or “getting in the way of their business.”
A brand like TripAdvisor is sophisticated - and large - enough to change this way of thinking.
Aside from its own supplier-facing technology, Viator has quietly made an effort to interface with third-party reservation systems and even worked on an effort to create an industry standard around availability and reservations messaging. Looking at other TripAdvisor efforts such as TripConnect, Viator's efforts should seamlessly fit into TripAdvisor’s existing strategy.
Marketing
It’s not yet known whether Viator as a brand will survive in the long term (or even the short term), but even with it’s age and time in the market, Viator was still not a household name as far as travel brands are concerned. One thing is for sure - expect to see TripAdvisor flex its brand and advertising muscle to significantly increase sales in the market.
Viator’s SEM spend - already market leading - will likely see significant increases in key areas, leaving other nascent players that rely on SEM to play with smaller niches going forward. And lets not forget deep - and I mean native booking - integration into all of TripAdvisor’s product lines, from web, to mobile, to perhaps even third parties.
Distribution
Viator’s current distribution model relies on its B2C efforts (web & mobile), several key B2B deals, as well as a growing affiliate network. The B2C efforts should seamlessly find a home at TripAdvisor, and will enjoy significant benefits from deeper integration into the TripAdvisor website, individual product reviews, etc.
TripAdvisor’s mobile products could finally offer actual native booking for activities, with the network effect of TripAdvisor’s efforts in other areas (restaurants, etc) bringing additional eyeballs to the tours section. All great things for TripAdvisor and the market as a whole.
But the big question: What happens to Viator’s B2B and third-party deals? Viator’s largest B2B deal by volume happens to be Priceline. Might we expect to see some changes in that area going forward? It’s not unreasonable to think so.
Competing OTAs using each other’s products isn’t unheard of, but it might just make the folks at Priceline a bit uneasy contributing to TripAdvisor’s bottom line. Watch this space.
Still work to do
Finally, it’s important to remind ourselves that there’s still a lot of work to do in this space. The most important thing TripAdvisor can do right now is to ensure the best and brightest at Viator stay, and that it looks at Viator as a significant opportunity to own a large share of the market if it takes the proper care.
T&A may resemble other markets like small & independent hotels, but it comes with a whole host of unique challenges and opportunities. Viator has over 15 years of scars of trying to develop this market online. That fact alone should underline the work left ahead.
NB:Match image via Shutterstock