Liberty TripAdvisor Holdings Profile
Liberty TripAdvisor Holdings, Inc. (TripCo), through its subsidiary, Tripadvisor, Inc. (Tripadvisor), operates a travel guidance platform.
Tripadvisor
Tripadvisor operates as a family of brands with a purpose of connecting people to experiences worth sharing. Tripadvisor’s intention is to be the world’s most trusted source for travel and experiences. Tripadvisor operates across three reportable segments: Tripadvisor Core, Viator, and TheFork. Tripadvisor leverages its brands, technology platforms and capabilities to connect its large, global audience with partners by offering rich content, travel guidance products and services, and two-sided marketplaces for experiences, accommodations, restaurants, and other travel categories.
Tripadvisor Core’s purpose is to empower everyone to be a better traveler by serving as the world’s most trusted and essential travel guidance platform. The Tripadvisor brand has developed a relationship of trust and community with travelers and experience seekers by providing an online global platform for travelers to discover, generate, and share authentic user-generated content (‘UGC’) in the form of ratings and reviews for destinations, points-of-interest (‘POIs’), experiences, accommodations, restaurants, and cruises in over 40 countries and over 20 languages across the world. As of December 31, 2022, Tripadvisor offered more than 1 billion user-generated ratings and reviews on nearly 8 million experiences, accommodations, restaurants, airlines, and cruises. Tripadvisor’s online platform attracts one of the world’s largest travel audiences, with hundreds of millions of visitors in 2022.
Viator’s purpose is to bring more wonder into the world—to bring extraordinary, unexpected, and forever memorable experiences to more people, more often, wherever they are traveling. In doing so, Viator elevates tens of thousands of businesses, large and small. Viator delivers on its purpose by enabling travelers to discover and book iconic, unique and memorable experiences from experience operators around the globe. Viator’s online marketplace is comprehensive and easy-to-use, connecting millions of travelers to the world’s largest supply of bookable tours, activities and attractions—over 300,000 experiences from more than 50,000 operators as of December 31, 2022. Viator is a pure-play experiences online travel agency (‘OTA’) singularly focused on the needs of both travelers and operators with the largest supply of bookable experiences available to travelers.
TheFork’s purpose is to deliver happiness through amazing dining experiences. TheFork delivers on its purpose by providing an online marketplace that enables diners to discover and book online reservations at more than 55,000 restaurants in 12 countries, as of December 31, 2022, across the U.K., western and central Europe, and Australia. TheFork has become an urban, gastronomic guide with a strong community that offers more than 20 million restaurant reviews.
Tripadvisor is one of the world’s largest online travel companies. Phocuswright is an independent travel, tourism and hospitality research firm.
Business Models
The Tripadvisor Core segment includes revenue generated from the following sources:
Tripadvisor-branded Hotels Revenue
The largest source of Tripadvisor Core segment revenue is generated from click-based advertising on Tripadvisor’s hotel meta platform, which consists primarily of contextually-relevant booking links to partner websites, which predominantly include OTAs and hotels. Click-based advertising is generally priced on a cost-per-click (‘CPC’) basis, with payments from partners determined by the number of clicks generated on a commerce link multiplied by the CPC rate for each particular click. Tripadvisor also generates click-based advertising revenue on a cost-per-action (‘CPA’) basis, with payments from partners determined by a contractual commission rate based on a traveler click generated on its platform that ultimately results in a hotel booking and stay via the partners’ websites.
Tripadvisor provides additional business-to-business (‘B2B’) offerings to hotels and related accommodation partners that deliver other unique opportunities to further promote, advertise, and operate their businesses, as well as merchandise their inventory on its platform. These include a subscription-based advertising solution, with payments determined by a contractual fee and time duration, or other CPC-based advertising services through hotel sponsored placements on Tripadvisor’s platform.
Tripadvisor-branded Display and Platform Revenue
Tripadvisor offers endemic and non-endemic advertisers unique opportunities to promote their brands primarily through display-based advertising placements across its brands on its platform. Tripadvisor’s advertising clients are predominantly direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations (‘DMOs’), OTAs, and other travel related businesses. Display-based advertising placements are predominantly sold on a cost per thousand impressions (‘CPM’), basis.
Tripadvisor Experiences and Dining Revenue
Tripadvisor merchandises, on the Tripadvisor platform, bookable experiences available on Viator and bookable dining reservations available on TheFork and earns affiliate marketing commission revenue on bookings that are driven by its platform, which are fulfilled by Viator and TheFork, respectively.
Tripadvisor provides additional B2B offerings to restaurant partners that deliver other unique opportunities to further promote, advertise, and operate their businesses, as well as merchandise their businesses on its platform. These offerings can be subscription-based, with payments determined by a contractual fee and time duration, or CPC-based advertising services through restaurant sponsored placements on its platform.
Other Revenue
Tripadvisor provides travelers additional offerings across various other travel categories, including alternative accommodations (e.g., short-term vacation rentals), cruises, flights, and rental cars. Tripadvisor provides these offerings across a collection of brands that complement and reinforce its segment strategy of providing differentiated guidance that helps travelers reduce friction and make better decisions. Tripadvisor’s alternative accommodation rentals platform is a two-way marketplace that connects travelers with owners and operators of short-term rental properties, generating commission revenue from both the traveler and the property owner for each booking it facilitates across its branded platforms. Tripadvisor’s cruise, flight, and rental cars offerings generate revenue primarily through click-based and display-based advertising, as described above.
The Viator segment offers travelers a comprehensive online marketplace that provides access to over 300,000 experiences and over 50,000 experience operators. These experiences are instantly bookable online in over 190 countries. Tripadvisor’s business model relies on the success of travelers and operators who join its marketplace and generate consistent bookings over time. As operators become more successful on Tripadvisor’s platform and as travelers return over time, Tripadvisor benefits from the recurring activity on its marketplace. Tripadvisor generates revenue through commissions for each booking transaction it facilitates directly and indirectly through its platform. Through Viator, Tripadvisor powers traveler experience bookings on behalf of third-party distribution partner websites, including the Tripadvisor platform, as well as many of the world’s major OTAs, airlines, hotels, online and offline travel agencies, and other prominent content and eCommerce brands. For the majority of experience bookings, Tripadvisor collects the full amount charged to the traveler at the time of booking and remits the operator’s portion after the booked experience occurs, which contributes to positive working capital before the traveler completes the experience.
TheFork segment offers travelers and diners a comprehensive online marketplace that provides access to more than 55,000 restaurants to discover and book reservations in 12 countries across the U.K., western and central Europe, and Australia. Tripadvisor primarily generates revenue for each booking reservation it facilitates on its platform, calculated on a per seated diner fee basis and paid for by the restaurant partner. Tripadvisor also generates revenue on a subscription basis from restaurant partners by providing, for a fee, access to premium online reservation booking software and related services offerings to help them more effectively and efficiently manage their business.
Commercial Relationships
Tripadvisor has commercial relationships with a majority of the world’s leading OTAs, as well as thousands of other travel partners, pursuant to which these companies primarily purchase traveler leads from Tripadvisor, generally on a click-based advertising basis. Although these relationships are memorialized in agreements, many of these agreements are for limited terms or are terminable at will or on short notice. As a result, Tripadvisor seeks to ensure the mutual success of these relationships.
For the year ended December 31, 2022, Tripadvisor’s two most significant travel partners were Expedia Group, Inc., and its subsidiaries (‘Expedia’), and Booking Holdings Inc., and its subsidiaries (‘Booking Holdings’), each of which accounted for 10% or more of Tripadvisor’s consolidated revenue and together accounted for approximately 35% of its consolidated revenue, respectively, with nearly all of this concentration of revenue recorded in the Tripadvisor Core segment. Additionally, Tripadvisor’s business is dependent on relationships with third-party service operators that it relies on to fulfill service obligations to its customers where Tripadvisor is the merchant of record, such as Tripadvisor’s experience providers and vacation rental owners.
Operations and Technology
Tripadvisor has assembled a team of highly skilled software engineers, computer scientists, data scientists, network engineers and systems engineers whose expertise spans a broad range of technical areas, including a wide variety of open source operating systems, databases, languages, analytics, networking, scalable web architecture, operations and warehousing technologies. Tripadvisor makes significant investments in product and feature development, data management, personalization technologies, scalable infrastructures, networking, data warehousing, and search engine technologies.
Tripadvisor’s systems infrastructure for Tripadvisor-branded websites is in a ‘hybrid-cloud’ configuration in which parts of it are housed at a colocation facility and managed by Tripadvisor’s operations team, while the rest is hosted on Amazon Web Services. Tripadvisor’s infrastructure installations have multiple communication links, as well as continuous monitoring and engineering support. The co-location facility is protected with both network-level and application-level defenses, using well known commercial solutions tailored for such purposes. Tripadvisor makes use of Amazon Web Services availability zones to provide redundancy for the cloud portions of its infrastructure. Substantially all of Tripadvisor’s software components, data, and content are replicated in multiple data centers and development centers, as well as backed up at offsite locations. Tripadvisor’s systems are monitored and protected through multiple layers of security. Several of Tripadvisor’s individual subsidiaries and businesses have their own technology teams to support business growth while leveraging common assets, tools and processes for scale.
Intellectual Property
In connection with Tripadvisor’s copyrightable content, it posts and institutes procedures under the U.S. Digital Millennium Copyright Act and similar ‘host privilege’ statutes worldwide to gain immunity from copyright liability for photographs, text and other content loaded on its platform by consumers.
Seasonality
Consumers’ travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partner advertising investments and therefore Tripadvisor’s revenue and operating profits, have also historically followed a seasonal pattern. Tripadvisor’s financial performance tends to be seasonally highest in the second and third quarters of a given year (year ended December 2022), which includes the seasonal peak in consumer demand, including traveler accommodation stays, and travel experiences taken, compared to the first and fourth quarters, which represent seasonal low points. In addition, during the first half of the year, experience bookings typically exceed the amount of completed experiences, resulting in higher cash flow related to working capital, while during the second half of the year, particularly in the third quarter, this pattern reverses and cash flows from these transactions are typically negative.
Marketing
Tripadvisor has established world-renowned, widely used, and recognized brands through the innovative and efficient implementation of marketing and promotional campaigns. Particularly, Tripadvisor has been successful with the strategic use of a number of cost effective online and offline marketing channels to reach travelers and diners, including its own platform channels (i.e., websites and apps), online search engines (primarily Google), social media, email, media via public relations, partnerships, and content distribution. Tripadvisor continues to focus on its ability to attract and engage new and repeat users and encourage users to directly visit its websites and apps.
Competition
Tripadvisor primarily competes, and in some cases partners, with the following businesses:
General OTAs, such as Expedia, Booking Holdings, Airbnb, traveloka, Despegar, Trip.com and their respective subsidiaries and operating companies;
Experiences OTAs, such as GetYourGuide, Klook, and TUI Musement;
Hotel metasearch providers, such as trivago, Kayak and HotelsCombined;
Online search, social media, and marketplace platforms for advertising spend, such as Google, Facebook, Twitter, Pinterest, and Snap;
Emerging online advertising businesses, such as ad-supported retail and entertainment platforms like Amazon, Spotify, and Walmart; and
Global and regional restaurant technology providers for reservation management and related services, such as OpenTable, Resy, and Tock.
History
Liberty TripAdvisor Holdings, Inc. was founded in 2013. The company was incorporated in Delaware in 2013.
