Tripadvisor is mulling an initial public offering for subsidiary Viator, which focuses on the sale of trip experiences and activities.
The company has taken initial steps toward an IPO by filing an S-1 form with the Securities and Exchange Commission, CFO Ernst Teunissen said during Tripadvisor's financial earnings call Thursday morning.
An IPO is one of a range of options Tripadvisor is considering for Viator, Teunissen said, calling it "an attractive option."
Viator has been a bright light for Tripadvisor, even during the pandemic. It saw a "tremendously strong year in 2021," Teunissen said, including a strong domestic business.
According to a letter to shareholders, Tripadvisor's Experiences & Dining segment, which includes Viator, reached about 90% of 2019 levels in the fourth quarter of 2021. Revenue for the segment was up 172% to $98 million. In the fourth quarter, bookings surpassed 2019 levels.
The company's president talks about the outlook for day-tours and experiences and how its travel agency business is doing.
Overall in the fourth quarter, Tripadvisor's revenue increased 108% over the same period in 2020, to $241 million. The company operated at a loss of $29 million, compared to a loss of $73 million in the same period in 2020.
For the full year of 2021, Tripadvisor's revenue was $902 million, up 49% from 2020. It operated at a loss of $148 million, compared to a loss of $289 million the year prior.
CEO transition
Last year, Tripadvisor's co-founder and CEO Steve Kaufer announced he would retire in 2022. On Thursday, Kaufer said Tripadvisor's board continues to look for his successor, but he is fully engaged in the company in the meantime.
"I wouldn't read anything into the lack of a candidate yet," Kaufer told analysts on the call. "The search hasn't been going on for that long."
Underperforming Tripadvisor Plus
In its letter to shareholders, Tripadvisor noted that Tripadvisor Plus, its consumer subscription product that offers access to discounted hotels for a $99 annual fee, has not been performing as expected. But it said it was "determined" to move forward.
"Although we have not made as much progress on Tripadvisor Plus as we expected, we are determined to build upon the foundations we established in 2021 and continue to iterate and innovate on the product and positioning with the goal of creating a consumer subscription business at scale," Tripadvisor said.
The company did add that it believes subscriptions "remain an attractive growth opportunity for Tripadvisor."
On the call with analysts, Kaufer said he thought the service "would resonate faster than 2021 has shown."
Tripadvisor had some challenges related to supply on Tripadvisor Plus, he said, but he believes there are now "some pretty nice discounts across the board."
Focus groups also informed the company that purchasing a hotel stay and a travel subscription service at the same time is a big ask of a consumer. To combat that, Kaufer said, Tripadvisor has been experimenting with presenting the subscription buy-in option at different points, as well as presenting its value proposition in different ways.
Omicron eases off
December and January were difficult months for Tripadvisor and the travel industry as a whole because of the impact of the omicron variant of Covid-19, Kaufer said.
Since then, though, the impact of the variant seems to have eased off, he said. While he was reluctant to make any projections about the weeks and months ahead based on a few weeks of positive data, he said, the company is encouraged by the very recent past.