Viator Drives Tripadvisor's Revenue Growth as Experiences Platform

25.08.2023 - 13:06 / skift.com / Selene Brophy / Matt Goldberg

Viator continues to be the star performer for Tripadvisor, accounting for 44% of the company’s total revenue in the second quarter of this year. But its parent company is spending nearly as much money as it generates to elevate Viator’s positioning as an experiences platform.

Tripadvisor’s total revenue for the second quarter ended June 30, 2023, saw 18% growth to $494 million. Viator brought in $216 million in revenue – up from $136 million. Tripadvisor’s Core Revenue saw a 2% increase, at $279 million versus $274 million in the same period a year ago.

Excluding the impact of currency exchange rate fluctuations, Tripadvisor estimated year-over-year growth was 61% for its experiences booking platform. Viator’s Gross bookings value (GBV) increased by 40% to approximately $1.1 billion. GBV is reported at the time of booking and is gross of cancellations, fees, and deductions. In contrast, revenue is recorded at the time of the experience and is net of cancellations.

Growth and performance marketing underscores the bottom line as Tripadvisor continues to invest in Viator’s brand, with selling and marketing costs of $270 million (up 24% from last year), taking up a 55% chunk of revenue in the second quarter, compared to 52% in the same period a year ago. The increase as a percent of revenue was primarily due to an increase in Viator marketing costs, which includes brand spend, the company said in its second-quarter earnings statement.

“We delivered healthy revenue growth on a consolidated basis, most notably in our experiences offerings, where we are pleased with our strong performance and market leadership in a large and growing category,” said Chief Executive Officer Matt Goldberg in the earnings statement.

Goldberg added that the company would balance “financial discipline with engagement-driven strategic priorities.”

Tech investment accounted for 14% of total revenue, primarily due to higher people costs. The company has thrown its hat into the AI-driven travel tools race with the release of its itinerary planner in July. While it’s not a chatbot, the tool is only available on the web. The tool’s release came as competitor experiences platform GetYourGuide revealed its AI-driven tours and activities plugin in May this year.

“Our experiences category outperformed, while the rest of the business delivered largely within expectations with the exception of our European-sourced hotel revenue,” said Chief Financial Officer Mike Noonan.

“We have initiated cost savings actions that will provide flexibility in prioritizing our strategic investment as we finish 2023, plan for 2024, and bolster our path to our long-term financial objectives.”

Lackluster performance from branded hotels saw a decline of 7% in