Tripadvisor CEO Matt Goldberg began Thursday’s call with analysts to discuss the company’s fourth quarter and full year 2023 earnings by saying he would not take any questions or provide further updates on the question of a sale until the time when the company has “something definitive to share.”
Revenue for Tripadvisor for the year was $1.78 billion, up 20% compared with 2022 and $390 million in Q4, up 10% compared with the same period last year. The company’s adjusted EBITDA was $334 million for 2023 – up 13% year over year - and $84 million in the fourth quarter, up 95% quarter over quarter.
“In addition to growing our revenue more than 10% higher than our previous peak, we have diversified our portfolio, with experiences now delivering more than 40% of our revenue, as we continue to drive our transformation at Tripadvisor, market leadership at Viator and profitable growth at TheFork,” Goldberg said in the company's earnings statement.
And on the call he added, “Last year we made meaningful progress executing against our strategic priorities. We reinforced our market leadership position at Viator while sharpening our focus on smart user acquisition. Viator also finished the year at break-even profitability - achieving the full-year milestone a year earlier than anticipated. At Brand Tripadvisor, we invested in our strategy and delivered promising early proof points while maintaining financial discipline.”
Acceleration for Brand Tripadvisor
Brand Tripadvisor, formerly known as Tripadvisor Core, was nearly up 7% in revenue for the year – from $966 million to $1 billion – and nearly flat for the quarter – up $1 million to $218 million.
Goldberg told analysts “2024 will be a year of acceleration for Brand Tripadvisor.”
A key part of that relates to the Tripadvisor app and how it will use generative artificial intelligence. Last year, the company re-launched its Trip tool for itinerary planning and integrated OpenAI’s generative AI technology. Goldberg shared early data regarding customer usage in November and now says the proof of the tool’s value is continuing to improve.
“First, the average revenue for a Trip user shortly after the launch was three times higher than average member. That has now increased to closer to five times – and the average member already monetizes at approximately ten times the rate of the average non-member,” he said.
“Second we saw a 100% increase in the number of daily users who generated and saved an itinerary specifically with AI in the back half of the year, with limited marketing efforts. And the majority are now engaging with this tool in our app. Finally we continue to see growth in the return rate of Trip users – whose repeat rates are meaningfully higher than users who don’t use the tool.”
Goldberg also mentioned the company is seeing “early but strong positive indicators” about the generative AI-powered hotel review summaries launched last fall and now implemented for more than 30 thousand hotels, which he described as an example of “how we are uniquely positioned to use technology to draw differentiated insights from our proprietary database of quality content and behavioral data.”
And using AI is a key part of the priorities Goldberg identified to help grow Brand Tripadvisor:
- using data and AI for better personalization: “This starts with recognizing them [members] for their contributions to our community and extends to broader benefits and rewards we can offer to our free membership program. It also includes new ways to engage with our product including in AI-driven conversational search experiences and iterative trip planning capabilities that better integrate commerce opportunities by helping travelers find the right hotels, experience or restaurants to round out their itineraries.”
- shifting marketing to an engagement-led strategy: “Historically we’ve optimized everything from our paid search spend to our CRM to drive immediate click and display revenue. … We now have the opportunity to target higher-value audiences more directly and drive more users to sign up and sign in as members to download our app and to begin planning a trip – because we know each of these behaviors is orders of magnitude more valuable to us than same session clicks.”
- improving the experience in the Tripadvisor app: “Our aim to deliver an essential app for travelers that convinces more of audience to download and use the app as the best end to end trip companion powered by AI.”
Viator
When asked by an analyst how Monday’s news about the potential sale will affect “planning for the potential spinoff of Viator,” Goldberg reminded listeners that since he joined the company in July 2022, that topic has not been a priority.
“I think you can see that our focus on the traveler, the experience they have with us and the way our product delivers over and over for them and has really shown itself to prove out in the results that we’ve seen to date. And that remains true. We are totally focused on the business,” he said.
“The announcement this week doesn’t change that. I’m focused on moving things forward and focused on our strategies, which I think are clear and really delivering and I know that our teams are doing the same.
Viator’s revenue for the year was $737 million – up 49% compared with 2022 and up as a percentage of Tripadvisor's total revenue from 33% in 2022 to more than 40% last year. In Q4, Viator’s revenue was $161 million – a 27% increase compared with Q4 2022.
Viator’s gross bookings value came in at $720 million for the fourth quarter and adjusted EBITDA was $15 million, compared with a loss in Q4 2022 of $3 million.
“We exited the year with solid financial results, delivering fourth quarter revenue of $390 million, reflecting year-over year growth of 10%," said chief financial officer Mike Noonan. "Adjusted EBITDA of $84 million, or 22% of revenue, came in better than expected due to favorable channel mix and disciplined marketing spend. In 2024, we will continue to prioritize our segment strategies, which focus on long-term growth and profitability.”
For Brand Tripadvisor, the segment’s revenue from “experiences and dining” led the way with annual revenue of $176 million, up 31% for the year, and quarterly revenue of $38 million, up 12% compared with Q4 2022.
Branded hotels revenue was nearly flat for the year, up just 1% to $659 million, while in the quarter revenue from branded hotels dropped 4% compared with Q4 the year prior.
“During the fourth quarter, the decline in branded hotels revenue was primarily a result of our European hotel meta offering," the company’s statement said. "Within branded hotels, during the full year 2023, growth in the hotel B2B offering was mostly offset by declines in the hotel meta offering. Hotel meta performance, during the full year 2023, was impacted primarily by declines in Europe, which more than offset growth in Rest of World."
Brand Tripadvisor’s media and advertising revenue for the fourth quarter was $35 million, reflecting year-over-year growth of 6%, and media and advertising revenue for the full year was $145 million, reflecting year-over-year growth of 12%.
Tripadvisor’s selling and marketing costs in 2023 were $940 million, an increase of 20% year over year but still 53% of consolidated revenue. For the fourth quarter, selling and marketing costs were $179 million, a decrease of 8% compared with Q4 2022.
Tags: Tripadvisor, Matt Goldberg, Viator, Mike Noonan, hotel
