TripAdvisor CEO Kaufer: Reinvent the Company in Good Times
Yes, TripAdvisor. You use it. I use it. But do you know the man behind this popular travel site? And why he is leading a major push to revitalize the company?
Founder and CEO Steve Kaufer (pictured) keeps a relatively low profile around town. That’s the way he likes it, but he probably wouldn’t mind if TripAdvisor got a little more attention and buzz.
The Newton, MA-based Web company (NASDAQ: TRIP) is one of the biggest names in the travel industry. It came from humble beginnings in 2000 to get acquired by IAC/Expedia (2004) and then spun back out as a public company (2011).
It is now growing on its own again with some 1,900 employees, a market capitalization of about $12 billion, and annual revenues approaching $1 billion—$255 million in the most recent quarter. The company’s network of travel sites attracts 260 million-plus unique visitors a month.
This year has been an interesting one for TripAdvisor, which is best known for its user reviews of hotels, restaurants, and other travel destinations. In June, the company changed how it displays hotel booking options, moving into “metasearch”—whereby room-price comparisons are shown on its site, rather than users having to click on pop-up windows from other sites like Expedia. Kaufer believes the move will pay off with a better user experience and stronger revenues. TripAdvisor has also continued its push into vacation rentals and international markets (China in particular). And it has made six acquisitions in 2013—Tiny Post, Jetsetter, CruiseWise, Niumba, GateGuru, and Oyster.
I sat down with Kaufer earlier this fall to get an update on the company—and where online travel is heading, more broadly. He had some surprising things to say about potential competitors—could Apple or Facebook move into travel?—as well as why it’s important to push the company and try new things when times are good, not bad.
Here’s an edited transcript of our chat, boiled down to five questions and answers:
Xconomy: TripAdvisor keeps evolving, building, and acquiring small companies. Where are you strong, and where do you still need work?
Steve Kaufer: We’re amazingly profitable. We’ve had a long, steady stream of growth, growth, growth. We’ve gone beyond that core hotel business that we once started in to doing a dozen-plus acquisitions, and other categories like cruises and a big push in vacation rentals.
We’ve collected a phenomenal amount of incredibly rich content to help you pick a hotel. We took a step further and said, online we’ll show you what your friends want to do, where they want to go, and where they’ve been [via Facebook]. One thing we hadn’t done all that well was price comparison. We did it, but it wasn’t particularly convenient. Nobody particularly liked the economic model behind it: you click a button and have to open up six different windows, and you have to compare them. OK, we changed it. Now we’ve got something that’s unquestionably best-of-breed content, decision support, and superior price comparison—globally. That’s a pretty nice picture.
[On acquisition sizes] we’d consider anything, there’s no religion on the topic. We’ve proven to ourselves we can successfully acquire a brand, a standalone site, and grow it. Other acquisitions we gave a ton of exposure and added to the scale of our business. They have varied in size from a couple million dollars up to the tens of millions. Would we do a billion-dollar acquisition? Sure, anything’s possible—it comes down to which one. If it’s “Hey, I want to buy a hotel chain,” that’s not going to happen.
X: What are your key challenges heading into the new year?
SK: There are markets where our products aren’t number one. I look at vacation rentals, and China. Culturally, what are our key assets in how we do stuff? And how do we not lose that if I think it’s great, and kill it if I think it’s hurting us? I’m always on the lookout to say, are we absolutely as efficient as we can be? I’m a huge believer in operational success. We’ve made some right decisions and we’ve made some wrong decisions about … Next Page »