What Tripadvisor’s New CEO Needs to Do First

And just like that, the search for Tripadvisor’s new boss is over. Co-founder Steve Kaufer will pass the title of CEO to Matt Goldberg. Although he begins the role on July 1, it will not be a summer vacation. Goldberg inherits one of the toughest jobs on the trip.

Let’s cut to the chase. Tripadvisor’s core metasearch business is floundering and experiencing one of the slowest recoveries in the travel industry. These challenges are not new and have been multiplying since Google threw his hat in the travel ring. But aside from praying for regulatory intervention, let’s focus on what’s under Goldberg’s control.

As CEO, Goldberg must focus on Tripadvisor’s business strategy. Tripadvisor’s scattered response to a changing the market for metasearch was ineffective. In our opinion, the company launched too many products with too little follow-up. We believe Goldberg needs to present a singular vision of what he thinks Tripadvisor can be, and then commit to implementing that vision.

Consider even a simple question: Who is Tripadvisor’s customer? Well, the metasearch business primarily serves online travel agencies. There is Business Advantage for hoteliers. He hopes to sell display ads to travel brands and beyond. Tripadvisor Plus is a B2C consumer offer. You have Viator charging commissions to tour operators. TheFork sells against restaurant owners. Flipkey integrates vacation rental managers. Etc.

The harm here is not only the brain damage it causes poor analysts (although spare a thought for us)! Serving such a large customer base complicates Tripadvisor’s business efforts. This limits opportunities for product cross-selling and creates silos within the organization. A seller with deep connections in the hospitality industry cannot sell to tour operators or vacation rentals. Metasearch auctions have a different sales cycle than display ads and both in turn differ from business services. And all this before the radical change in mentality required to build B2C rather than B2B.

This approach means that each new product launch is limited in the amount of synergy it can bring to the overall business. Rather than building a flywheel where new offerings reinforce and accelerate everything else, each product pulls on its own.

Another less obvious, but perhaps even more insidious, side effect of Tripadvisor’s untargeted approach has been that it ends up serving multiple masters. Compromises that seek to please all stakeholders are the territory of sleazy politicians and B2B travel middlemen. This kind of dithering might work well when it comes to other businesses, but it’s deadly in the B2C world. Consumer brands cannot do well.

The launch of Tripadvisor+, the company’s D2C subscription service for travel discounts. It was a unique way to monetize Tripadvisor’s huge user base while providing hotels with an alternative to hefty OTA commissions. I admit I was shocked when Tripadvisor gutted the program in addressing concerns about hotel rate parity. What was most shocking was not that the hotel brands were furious, but that Tripadvisor had not anticipated and prepared for the inevitable pushback. I had assumed they were fine with putting the consumer above any hotel wrath; I was wrong.

Tripadvisor Plus is still around, but by replacing its original value proposition of immediate savings with one of deferred credits, the product has lost its bite. Amazon didn’t reach over 100 million subscribers by preaching the virtues of delayed gratification. Trying to please both its B2C and B2B customers has led Tripadvisor to create a substandard subscription service that is struggles to find a product-market fit.

This is not an isolated case of powerful product ideas that have not been launched.

Take FlipKey, a vacation rental marketplace, bought by Tripadvisor in 2008 — Brian Chesky was still hosting couch surfers back then. But despite the growth of alternative hosting in the hottest hosting market, FlipKey never took off.

Then there was the time when Tripadvisor has redesigned its homepage to create a social flow of travel. A sort of travel-specific Facebook. Tripadvisor has many more users who read its reviews than those who click on its booking auctions. The idea was to monetize this consumer base by giving them something to browse. Tripadvisor could then sell branded advertising against its audience to in- and non-travel businesses. The flow has since collapsed and Tripadvisor has reverted to a more search-oriented landing page design rather than one that encourages scrolling.

Or Recce, Tripadvisor’s ongoing initiative to connect travel advisors with its users for a fee. It’s still small, but I like the concept. Competing with Google with an unmarked travel offer is a losing battle. Finding a way to offer differentiated travel advice, much like offline travel agents did a decade ago, could be a powerful way forward. Perhaps Reco was never going to develop into a full metasearch replacement, but just over a year after its launch, the product was “put on ice.” You can only access it from the homepage by scrolling through the fine print at the bottom.

My advice to the new CEO of Tripadvisor? Matt, it’s like a round of golf. Pick a line, keep your eye on the ball and, above all, follow it.

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