Tripadvisor
says its financial results for the quarter
ending September 30 were better than it had projected as travel is slowly resuming
in markets around the world and cost-cutting measures took hold. And
the company says it will launch a new consumer subscription product to drive
new revenue for the future.
Total revenue for the quarter was $151 million – a marked
improvement from
second quarter revenue of $59 million
. And after a $74 million
adjusted EBITDA loss in the second quarter, the figure turned positive in Q3 to
$15 million – although that’s still an 88% drop from the same period last year.
“Our Q3 results were better than our internal projections
when we last reported in August, and it is a testament to our business model,
flexible cost structure and proactive cost reduction efforts that we were able
to produce positive EBITDA even at such sharply reduced revenue levels,” says
Ernst Teunissen, Tripadvisor’s chief financial officer, in a statement
accompanying the financial report.
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“Travel’s early recovery progress has been encouraging, but
we have planned with conservatism. We strengthened our liquidity position in
early Q3, and we remain adequately prepared for a variety of scenarios. We will
continue minimizing operating expenses by prudently balancing cost controls
with targeted investments in our long-term strategic initiatives.”
Monthly unique users on Tripadvisor sites as compared to
last year inched up each month of the quarter, from 67% of the 2019 figure in
July to 74% in September.
Revenue showed a similar trajectory – with July consolidated
revenue approximately 30% of last year’s comparable period and August and
September revenue approximately 40% of last year’s comparable period.
“We outlined our expectation for an uneven recovery and,
since the start of Q4, we have been seeing exactly that, particularly in
Europe, where the virus has resurged. However, each month that passes brings the
world closer to important medical developments that will meaningfully restore
consumer confidence in travel and allow for a broad-based rebound,” says Steve Kaufer,
Tripadvisor co-founder and CEO in the earning statement.
“In the meantime, we remain focused on factors inside our
control: execute on initiatives that deepen customer relationships, deliver
more value to partners, roll out new and innovative product offerings to both
industry partners and consumers, and position the business well for many years
to come.”
After announcing last week the launch of two new subscription
products for hoteliers, during a call with analysts Kaufer says Tripadvisor
will roll out its first direct-to-consumer subscription offering in the coming
months.
Kaufer does not share specific details on how the program will
operate but says subscribers will get access to discounts on hotels and
experiences and to special perks such as room upgrades or spa credits.
“The way we look at it is, we have 400 million unique
users on our site... They are already in a plan/buy mode. So, our opportunity
with this subscription product here is, while they are on the site, present the
value proposition in such a way that it becomes a no-brainer, really simple,”
Kaufer says.
“And then when you look at our supply side, we have relationships
with all of the aggregators and tens or hundreds of thousands of properties and
attractions throughout the globe. So we kind of have both pieces of the
marketplace and our opportunity is to connect them in a premium package.”
The company says its cost reduction efforts – which have included
layoffs and furloughs
of more than a 1,500 employees – are expected to
generate fixed cost savings of more than $200 million in 2020 compared to 2019
and have “positioned [the] business for a variety of recovery scenarios.