Last week, TripAdvisor announced that they bought Viator for $200 million, mostly in cash. This is BIG news for the tours & activities sector.
Here’s a breakdown of what it means for tour suppliers.
Background: Who’s involved
Before we get into it, it’s important to understand who we’re dealing with.
TripAdvisor is the reigning king of user reviews worldwide.
- 260 million unique monthly visitors
- 150 million travel reviews and opinions from travelers around the world
- 90+ user contributions every minute
Viator is the world’s leading OTA for tours and activities.
- Sells 20,000 tours
- Receives 8 million visitors each month
- Apps downloaded over 1 million times
- Receives referrals from over 3000 affiliates (including 17 OTAs, 18 hotel brands, and 33 airlines)
- Has over 700,000 opt-in subscribers to email newsletters
Both companies are hugely successful at what they do, and highly influential in the tour and activity niche.
Why it happened
It’s a match made in heaven.
Viator have been partnering with third party booking systems to improve on-demand availability of their tours, while TripAdvisor have acquired several companies to cover the entire trip.
As reported by Breaking Travel News:
“Our selection of tours and activities spanning 1,500 destinations are a strong complement to TripAdvisor’s wealth of in-destination planning resources,” said Barrie Seidenberg, president, Viator.
“We share a vision for providing the resources travelers need to plan and have the perfect trip, and this deal would enable Viator to help more travelers experience the best activities their destination has to offer.”
Viator also helps TripAdvisor to tap into the very lucrative tour & activity market. In Europe alone, the tours and activities sector brings 545 million customers per year, with 37 billion euros in gross bookings (PhoCusWright 2014).
What will change
Alex Kramer of Tnooz shares interesting predictions on the effect this partnership will have on the industry in terms of technology, marketing, and distribution.
Viator’s integrations with third party booking systems fits well into TripAdvisor’s existing process.
According to Kramer, technology is the top factor standing in the way of moving many more sales online, but many tour suppliers are not getting the message.
He says that “there are still far too many mom and pop shops that label technology as ‘inconvenient’ or ‘getting in the way of their business’.”
Because Viator has invested heavily in mobile applications, their partnership with TripAdvisor will allow for last minute bookings, bringing tour suppliers many more sales. After all TripAdvisor is large enough to influence even the smallest tour supplier’s way of thinking.
TripAdvisor will use its brand power to get significantly more people to book tours and activities directly through their site.
Viator will be integrated into all of TripAdvisor’s product lines, from web to mobile to maybe even third parties.
Viator distributes tours to consumers online and through mobile applications. This will fit in well with TripAdvisor’s current offering.
TripAdvisor may finally be able to offer native booking for activities on their mobile products.