May 25, 2018
Friction-free experiences are must-have amenities for travelers
Consumers expect real-time, frictionless experiences in every single brand engagement - both online and off. The travel industry is no exception to this rule.Read more
The tours and activities sector is not hotels 2.0. It’s a massive business opportunity, though. TripAdvisor CEO Stephen Kaufer estimated it will be about half the size of the hotel sector, with similar take rates.
Investors are starting to change their perspective on the value drivers for TripAdvisor. The non-hotel business segment is starting to contribute meaningful growth and is operating in a less crowded space as of now. The attractions sub-segments have been undeserved from a technology prospective. Penetration within these groups should continue and monetization will come.
It all started for this sub-segment in 2014 when TripAdvisor purchased Viator. Travelers through viator.com or tripadvisor.com/tripadvisor app are able to book attractions and get perks along with it, like skipping lines. The main source of revenue generation is like OTAs for the hotel business, it charges a commission to the vendor if booked through their platform. It's been sourced that these commissions are around 20%. With the purchase of Viator came the supply side of 20,000 bookable attractions. TripAdvisor was already generating demand through reviews.
The platform already drives a lot of reviews and traffic to their website or app. So, the drivers for revenue generation on the attractions segment is the continuation of adding supply (bookable attractions) and conversion rates.
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