Tripadvisor Expects First Profits for Viator and TheFork As Potential Sale Looms

15.02.2024 - 19:37 / skift.com / Dennis Schaal / Matt Goldberg

The prospect of a deal to acquire Tripadvisor hung over the company’s fourth-quarter earnings call Thursday and executives didn’t offer any further details.

Tripadvisor said Monday that it had formed a committee to evaluate proposals. One key question is how any transaction would affect a potential spinoff of Viator, Tripadvisor’s tours and activities brand – and growth engine.

Tripadvisor CEO Matt Goldberg said on the call that it wasn’t top of mind.

“Since I joined the company, of course, this notion of a spinoff of Viator has just not been something that we’ve spent a lot of time and energy on, given the markets that we’ve been in,” said Goldberg, who became the company’s boss July 1, 2022.

Chief Financial Officer Michael Noonan said Tripadvisor expects that Viator and TheFork, which is the leading dining reservations brand in Europe, will be profitable on a full-year basis — for the first time — in 2024.

Tripadvisor declined to provide any formal 2024 financial outlook, which would have been customary. But Noonan provided a “framework.”

“We will continue to invest and operate the brands in a way that strengthens and builds their long-term sustainable competitive advantage,” Noonan said. “We will do this against the backdrop of what we believe to be a healthy travel market. Although we expect to see some normalization across travel this year versus last year.”

Viator continued to grow over the past year. It generated an increasing portion of Tripadvisor’s overall revenue (41% in 2023 versus 33% a year earlier), and broke even on an adjusted EBITDA basis.

The largest portion of the business, the newly named Brand Tripadvisor, saw modest revenue growth of 7% in 2023. Its adjusted EBITDA inched up by 1%. The segment includes hotel metasearch; media and advertising, experiences and dining revenue sold under the Tripadvisor brand, and products such as vacation rentals, cruise, flights and car rentals. The segments’ financials were adversely impacted by a decline in its European hotel metasearch business.

TheFork, which might be called the OpenTable of Europe, broke even in the fourth quarter, but notched a full-year loss.

Lowers sales and marketing costs as a percentage of revenue improved margins for both the Viator and Branded Tripadvisor segments during the fourth quarter.

Here’s a more detailed look at Tripadvisor’s numbers:

Tripadvisor’s GAAP net income in the fourth quarter was $32 million versus a $3 million loss a year earlier. Fourth quarter revenue increased 10% to $390 million.

The company’s full-year 2023 net income fell 50% to $10 million on revenue of $1.8 billion, a 20% jump. 

Selling and marketing costs, which were 46% of total revenue in the fourth quarter, declined 8% to $179