Viator, one of the largest online tours-and-activities booking agencies, said today that it has been acquired by TripAdvisor, the user-reviews giant, for approximately $200 million -- mostly in cash.
Since its founding in 1995, Viator (pronounced VEYE-a-tor) has disclosed fundraising of about $11.1 million.
The San Francisco-based company's largest outside shareholder is private equity firm Carlyle Venture Partners. Another top investor is Technology Venture Partners.
Dipping a toe into tours
It was only yesterday that CEO Steve Kaufer told TripAdvisor analysts on a second quarter conference call that his company’s next move was the tours and activities market.
The acquisition was presaged by the announcement in 2013 of a partnership between the companies over a booking integration.
Given that Viator has status as a heavyweight in its sector, it seems likely to have gone for a higher price than any of the other companies that TripAdvisor has acquired to date.
In the past 12 months, TripAdvisor has rolled up several companies, including La Fourchette, a restaurant mobile booking site (that is like a French OpenTable); Tripbod (i.e. Safe Planet), a B2C local services site; Vacation Home Rentals, a B2B platform; and Oyster.com, a hotels review site with professional photos of a curated selection of properties.
Ahead of rivals
Viator has several competitors, including most prominently GetYourGuide, which has raised $20.5 million, and tours-and-activities aggregator Peek -- which has raised $6.9 million.
Viator stands out for its "curation model," say analysts. For each location, it lists a handful of tours and activities, unlike its leading rival GetYourGuide, which takes a full market view -- listing almost any tour or activity available.
Peek takes a similar approach, though it recently added a business-to-business offering.
Given that Viator has a "curation model’, that does not jibe with TripAdvisor’s all-things-to-all people model. This may mean that the user-review giant will have to make additional moves in the space as a stepping stone to its own direct listings of tours and activities.
Key metrics
Viator is a leading seller of tours online, with 20,000 options, from walking tours to whale-watching trips.
While it says it has 1,000 destinations across more than 160 countries, it has focused its marketing efforts on the United States, the United Kingdom, and Australia (where it was born).
The company doesn't disclose revenue, but it does say that it receives 8 million visitors to its site each month. It claims that its apps for Apple and Android devices have been downloaded more than 1 million times.
The company has previously said that its search engine marketing tactics have ensured that it is at the top of Google search results for many relevant queries -- a key source of its customer referrals.
Referrals from more than 3,000 affiliates are also important, including ones from 17 online travel agencies, 18 hotel brands, and 33 airlines, according to a company presentation given this past winter.
Direct marketing efforts include more than 700,000 "opt-in" subscribers to its email newsletter.
Viator has aimed to improve on-demand availability for customers, especially ones who are already at a destination and doing searches on a tablet or smartphone. Earlier this year, it told Tnooz that 80% of its product line is bookable within 24 hours, 90% bookable within 48 hours.
Big market
The tours and activities sector in Europe alone is 545 million customers per year, achieving gross bookings in the region of 37 billion euro, according to a spring 2014 released study by PhoCusWright, a market research firm.
Viator, which has more than 250 employees worldwide, has to work both to build up its supply -- by helping tour operators, many of whom are not technologically savvy, to "go digital."
It also has to work on the "demand" side, explaining to vacationers worldwide that tours and activities can be booked online in advance of a trip. Most travelers are accustomed to booking these things on the fly, in person.
Payday
The acquisition is a feather in the cap of Barrie Seidenberg, who has been CEO for the past nine years.
But it's also a coup for Scott Halstead, who has been Viator's chief financial officer for four years. Prior to this role, Halstead helped raise more than $185 million in public and private equity and debt for startups outside of the travel sector.
TripAdvisor's entry into tours and activities is a sign TripAdvisor wants to live up to its name and cover the entire trip.
YESTERDAYTripAdvisor misses estimates, and its call contains clues to weakness