The user reviews giant TripAdvisor has just announced a very significant acquisition. The company has purchased Viator in the last few days; one of the world’s largest online tours and activities booking agencies. The deal was completed for around $200 million, with TripAdvisor reportedly paying the majority of the fee upfront in cash.
Collaboration precedes takeover
In many ways, this particular deal does not come as a huge surprise. TripAdvisor previously announced a partnership between the two companies back in 2013. At that time, the intention was for Viator to collaborate over a booking integration system, but evidently this has gone so well that the major shareholders of TripAdvisor considered a takeover to be beneficial to their interests.
This is underlined by the fact that Viator’s heavyweight status within its niche means that TripAdvisor has splurged out more money on this acquisition than for any previous company. This is not a statistic to be taken lightly given the active nature of TripAdvisor in terms of acquisitions over the last year or so.
In the last 12 months, TripAdvisor has taken the opportunity to buyout numerous companies, including La Fourchette, Tripbod, Vacation Home Rentals and Oyster.com. With major private equity firms such as Carlyle Venture Partners and Technology Venture Partners involved in the running of the San Francisco-based company, it is clear that TripAdvisor will continue to be a major player in tourism in the coming decades.
Mobile space to change profoundly
The acquisition of Viator by TripAdvisor can be seen as particularly significant, as it represents an interesting and unique commercialisation of the mobile space beyond the customary hotel and flights. Viator already had an extremely prominent position within the industry, but now that it is effectively partnering with the world’s largest travel site, its potential just increased stratospherically.
One of the interesting aspects of this acquisition to DMOs is that Viator will now be in the position to offer a product that would greatly appeal to most DMOs. The purchase of the company by TripAdvisor will imminently lead to Viator offering full activity products within travel destinations.
Given that Viator has built its business on a so-called ‘curation model’, its operation will have to expand in the near future to more appropriately tessellate with TripAdvisor’s more holistic approach. Before the acquisition, Viator was the leading seller of tours online, with 20,000 eclectic options on offer. The booking agency giant claims to operate over 1,000 destinations in 160 countries. As a result of this move, TripAdvisor will now likely have to make additional moves in the space as a stepping stone to its own direct listings of tours and activities.
How can destinations compete?
In the contemporary marketplace, holiday destinations find themselves competing with huge companies in order to provide relevant information and advice to tourists and travellers. This particular acquisition only serves to emphasise this point.
In order to remain the primary source of information for travellers, and stay ahead of the competition, destinations must provide unique knowledge and insight to tourists. This can be achieved by working more closely with stakeholders, and destinations should aim to become an authoritative source of information. This will become increasingly important in maintaining and developing their online presence and status.
Additionally, as companies such as TripAdvisor becoming increasingly prominent, the need for destinations to require ever more up-to-date and relevant information will proportionately grow in importance. In order for destinations to provide a competitive platform, it will be necessary for them to differentiate themselves from sites such as TripAdvisor.
This can be achieved by providing original and unique content on websites. High quality of information tends to drive qualitative traffic. In addition, it would be a wise move for destinations to also conceive of ways to work closer with commercial competitions such as that provided by TripAdvisor and Viator. Instead of viewing this merger as a threat, it could more positively be viewed as an opportunity.
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