For the second quarter of 2020, Tripadvisor is reporting revenue
of $59 million, a $153 million net loss and a $74 million adjusted EBITDA loss –
but in a letter to shareholders, co-founder and CEO Steve Kaufer says that is
still “better than our previously disclosed expectations.”
The revenue figure is 86% less than the same period last
“Our second-quarter results reflect the historic impact the
COVID-19 pandemic is having on our business and on the travel industry.
Significant year-over-year impacts persist and near-term visibility remains
low. That said, we are encouraged that consumer travel demand trends have been
gradually improving since the April nadir,” Kaufer says.
“Travel’s recovery path will likely be uneven by geography
and by sector as businesses and borders reopen and consumer confidence in their
own health and safety is restored. Accordingly, we are leveraging our
platform’s core strengths to help customers and redoubling strategic efforts to
emerge in a strong position on the other side of this pandemic.”
Tripadvisor says during April, May and June, monthly unique
users on its sites were approximately 33%, 45% and 60%, respectively, of last year’s
comparable periods. Traffic continues to improve and the company estimates July’s
figure will be about 67% of last year’s.
The company says revenue is also improving – from a low of
about 10% of last year’s comparable period in April and May to 20% in June and
an estimation of 30% for July.
“COVID’s impacts continue to vary market-by-market and
week-to-week, so recovery from here will likely continue to be nonlinear. We
remain cautious, but recent improvements are encouraging nonetheless,” the letter
Tripadvisor says the restaurants and vacation rentals segments
have shown the fastest relative recovery, followed by hotels and then experiences.
In a call with analysts to discuss the results, Kaufer says he expects revenue
to pick up in all segments as cancellations continue to moderate.
“We believe as our clients see the trends of consumers
making the reservation and fulfilling it, actually taking the trip, then
they’ll be more confident that the CPCs they pay us will in fact be turned in
to profit on their side, at which point CPCs go up in our auction,” he says.
When asked if he is concerned about online travel agencies
pulling back on their spending on the platform, Kaufer says he is confident in
Tripadvisor’s ability to deliver the high-quality traffic the OTAs are looking
“We certainly understand our clients desire to directly win
over the consumer, to go direct to their site, but at the end of the day... the
type of traffic we have is pretty hard to find anywhere else. It’s an auction
so it requires lots of people to play and fortunately we do have the chains, we
do have all the major OTAs and most of the second and third tier OTAs on the platform.
There’s always some ins and outs there, but I’d characterize the auction as
healthy and currently responding to the changes in cancellations and truly just
For the remainder of the year and into 2021, Tripadvisor
says it has several priorities, including accelerating its “One Tripadvisor” consumer-focused
strategy. The effort includes a redesigned home page and content to “deliver a
more personalized and contextually relevant discovery, planning and shopping experience.”
A redesigned mobile app is in the works for later this year.
Kaufer says the goal is maximize the value of the content
available on Tripadvisor to help travelers plan every aspect of a memorable
trip, including an increased emphasis on the discovery and booking of
Following the launch of a personalized travel service known
in June, Tripadvisor says it will continue to develop consumer subscription
and other direct-to-consumer paid offerings.
“We think it is a potentially large opportunity in terms of
tapping into the travel audience that is already on our site with a new set of
products and services to help them have that magical trip,” Kaufer says.
The company says it will also launch a new solution focused
on hotel customers in the coming months and is “focused on building the product
suite and deepening hotelier partner engagement on our platform.”