Tripadvisor finished 2020 with its revenue down 61% to $604
million compared to $1.6 billion in 2019, but president and CEO Steve Kaufer says the company
is entering 2021 “with optimism,” largely driven by the potential to develop a recurring revenue stream through its new Tripadvisor
Plus subscription service.
Reporting its financial results for the fourth quarter of
2020 and the full year, Kaufer says the company has “taken exciting steps to
orient the business to emerge from the pandemic even stronger. In 2021 and in
the years to come, we will remain focused on building direct, durable customer
relationships that will enable us to more effectively convert Tripadvisor’s
influence into monetization.”
Tripadvisor revenue was $116 million in the fourth quarter of 2020, down
65% compared to the same period a year earlier. For the year, losses were split
roughly evenly between the company’s three business units – defined as hotels,
media and platform; experiences and dining; and other.
Adjusted EBITDA loss was $33 million in the fourth quarter
and $51 million for the full year, compared to 2019 figures of $92 million in the
fourth quarter and $438 million for the full year.
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Monthly unique users on the site in the fourth quarter came
in at 68% in October, 58% in November and 59% in December compared to the same
period a year earlier but well above the April level of 33% compared to its
Tripadvisor says it achieved more than $200 million in
workforce-related and discretionary fixed cost savings in 2020 versus 2019.
“In 2020, we successfully navigated the most challenging
period our industry and business has ever faced. Our concerted actions
throughout the year – rapidly reducing our flexible cost structure, raising
debt capital and renegotiating our credit facility – have ensured our strong
financial position ahead of a variety of recovery scenarios,” says Tripadvisor CFO Ernst Teunissen.
“In 2021, we will continue to execute our business with prudent
cost discipline, balancing persistent savings with targeted investments in
exciting long-term strategic growth initiatives.”
Two of those initiatives are Tripadvisor Plus, the platform’s
$99-per-year subscription product, and Reco, a marketplace for trip designers, both
launched in 2020.
In a call with analysts to discuss the results, Kaufer says Tripadvisor
Plus will be coming out of beta soon and adding more discounts and perks for
subscribers as it expands throughout the United States and next to other
Kaufer says Tripadvisor Plus is targeting travelers interested in
longer, more complex trips where the discounts on room rates and perks such as
upgrades, in-destination benefits and access to exclusive experiences and
reservations make the subscription fee a “no brainer.”
The program is structured to also be a “win” for hoteliers,
says Kaufer, since it gives them access to these potentially higher-end travelers
and also preferred placement on Tripadvisor, all for no additional distribution
“We are changing the model whereby folks like Tripadvisor
would ordinarily take the commission on the hotel sale and we’re... saying
instead of paying us let’s offer that discount directly to the consumer,” he says.
you add the value of the perk and you add the value of the discount it becomes something
pretty compelling for the consumer... and something that’s well within the
availability of the hotelier to offer that package at the same or better travel
distribution cost as they go to for other channels.”
Along with developing Tripadvisor Plus, the company says
priorities for 2021 include “continuous improvement in our auction and our
hotel B2B services," and in the category of experiences and dining, “unlocking
growth opportunities across Tripadvisor, Viator and TheFork.”