Tripadvisor says “the clouds have started to part” in the
first quarter of this year, as expanded availability of vacciness is driving demand
for leisure travel on its platform, particularly in the United States.
In a letter to shareholders reporting its Q1 financial
results, the company says key metrics were slightly better than expected.
Revenue came in at $123 million in the first quarter, down
56% year-over-year and at about 33% of 2019’s comparable period.
Net loss in the first quarter was $80 million and adjusted
EBITDA was negative $26 million.
The letter states: “Our Q1 results reflect ongoing
unevenness in leisure travel’s recovery path. ... Sequential monthly progress was
U.S-driven, as vaccinations led consumers back to planning leisure travel.
Europe lagged due to lockdowns, but demand picked up in April, and we are
optimistic for broadened, international recovery as vaccination rates improve.”
Since announcing the direct-to-consumer Tripadvisor
Plus subscription service last fall, the product has been available in beta in
select U.S. markets. Now the company says it expects to move into a full U.S.
launch within the next few months.
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While the company is not sharing subscriber numbers, in a
call with analysts to discuss the results CEO Steve Kaufer says he is pleased
with the early results - with the average subscriber saving more than $300 on
their trip and several instances every day when a subscriber saves more than
$1000 - and he is getting “more bullish” on the opportunity.
“This is really early days in a great new product category
and success is measured in years, not months, and that’s the way we are
approaching it,” he says.
When asked about the response from hoteliers, Kaufer says the company is working with aggregators, independent hotels and chains, although he says
there has been “some push back from some chains.”
“They want to make sure their properties... get their fair
share of bookings from this product. Others chains are a little bit more
nervous about how we are showing the rate. We have taken that as great sort of
constructive feedback, and we are addressing it. So we are in conversations...
about what it will take to make them to feel very comfortable about joining the
program,” he says.
“And we want to make sure we have participation from as many
[chains] as we can because some of those chains have the absolute best properties
around. We want every property to be able to join the program. [But] we don’t
need need every property, we just need a few dozen in all the geographies people
are traveling to.”
As it looks to build the Tripadvisor Plus product, the
company says it is exploring partnerships with car rental companies, digital services, credit cards and others.
Explaining the opportunity with credit cards further, Kaufer
says, “The first could be on the part of the more higher end credit card that
carries some interesting travel benefits already or maybe a particular financial
institution wants to break into that pretty lucrative category of travel so one
of the travel rewards with the credit card would be a subscription to Tripadvisor
Plus... Another option certainly being explored with other financial institutions
is to simply include a discount perhaps or a free trial... with auto renew on...
we think that that renewal will come rather simply.”
Tripadvisor’s monthly users on its branded websites crept up
slightly each month of the first quarter – reaching 53%, 56% and 58% of 2019’s
comparable periods respectively through January, February and March. In the
U.S. in March, monthly unique users neared 80% of 2019 levels, while outside
the U.S. the percentage was about 50% of 2019 levels.
Operating expenses in the first quarter were $207 million,
down 32% year-over-year, with reductions coming in all categories including a
42% year-over-year drop in selling and marketing costs to $73 million in the
Workforce-related costs are also down as the company ended
the quarter with just over 2,500 employees, 34% fewer than last year at this
time, and it says the majority of 2020 fixed cost savings should persist
throughout this year.
“We believe we are advantageously positioned for the rebound
and beyond. We will continue to focus on factors within our control - serving
customers, leveraging competitive advantages and laying the foundation for
long-term, diverse growth,” the letter states.