Despite its declining hotel auction revenue, Tripadvisor contends that it can balance the downturn by growing revenue in other areas.
In a recent call to discuss earnings, Tripadvisor CEO Steve Kaufer says that the company will “focus on driving revenue
growth outside of the hotel auction.”
“We therefore expect our non-hotel auction revenue will drive the lion's share of our future growth,” he says. “We expect Experiences and dining revenue alone will exceed the hotel auction in 2020.”
As
Tripadvisor aims to grow in 2020, what are the big headwinds to watch out for?
Coronavirus
In the earnings call, the company attributed part of its weak hotel auction performance to the
COVID-19 coronavirus outbreak in China.
Kaufer says that Tripadadvisor is closely watching the situation and anticipates “a point or two or low-single
digital impact” from COVID-19.
“We do see some unexpected or new cancellation levels in Asia, but we're not that exposed to Asia as an overall part of our business,” he says.
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Given Tripadvisor’s recent joint venture with Trip.com
Group, there is reason to speculate that the company is now increasingly exposed to financial risk in Asia from COVID-19.
“We believe the partnership with Trip.com will help our long-term growth in the region,” a Tripadvisor spokesperson
tells PhocusWire.
“Long term, we believe this will be a winning combination in the region.”
Viator
Tripadvisor realigned its experiences and dining segment in January by making Viator a separate brand.
“This year,
we’re more focused than ever before on the traveler experience, and we recently restructured our team to better serve this purpose,” a Tripadvisor spokesperson says.
Kaufer says that this reorganization was set in motion years ago when Tripadvisor
acquired Viator for $200 million in 2014.
The plan was to reportedly learn about merchandising experiences from Viator before rebranding.
“The one team that was responsible both for Tripadvisor and for Viator was leveraging all
those new learnings for how to effectively sell experiences to travelers,” Kaufer says.
“With several years now of getting that into our DNA, we're now able to split it off.”
As Viator begins a new chapter, questions loom about
the potential diminished brand value since its acquisition and about the marketing resources Tripadvisor is going to use to drive people to use the separate brand.
“Viator remains the leading pure-play experiences booking site in our key
markets,” a Tripadvisor spokesperson tells PhocusWire. “We’re constantly working to extend that leadership position, and while marketing is a part of that, we’re doing much more: We’re bringing the industry online, delivering an outstanding site experience
and providing unrivaled customer service.