Skift Take
Steve Kaufer had a great perform at Tripadvisor, transforming a business with a little office over a pizza shop in Massachusetts 20 years ago into a global, household-name brand. The problem for Tripadvisor isn’t necessarily who will replace Kaufer, but what innovations will it take to revive the company.
Dennis Schaal
After a more than 20-year run as co-founder and CEO of Tripadvisor, Steve Kaufer will step down in 2022, the business announced Monday.
“Steve has been the driving force at Tripadvisor since its launch in 2000,” said Tripadvisor chairman Greg Maffei in a statement. “His contributions to the consumer’s travel experience are countless, and his vision has resulted in the Tripadvisor we understand today.”
The company started a search for a successor that will involve both internal and external candidates.
“We concern the close of 2021 in a strong position– tourists are returning as we leave the pandemic, interesting brand-new initiatives are well on their way, and we continue to utilize our strengths as we evolve Tripadvisor for the future,” Kaufer said in a declaration. “Offered our strong position, the skilled groups driving our strategies forward, and after over 20 years at Tripadvisor, I think now is the best time to reveal my strategies to step away from the business next year. I have such respect and gratitude for all the groups throughout the years who have actually made this business what it is today, and stay devoted to continuing to assist the Tripadvisor household as CEO until the shift is complete.”
The announcement of Kaufer’s departure takes place after a current about-face in a product it had– or still has– great deals of wish for, Tripadvisor Plus. The program, which used up-front hotel discount rates to subscribers for $99 per year, faced stiff opposition from huge hotel chains about rate parity problems, and is currently transitioning to offering what some may define as less-attractive, and likely smaller sized, cash-back payments after stays.
Tripadvisor problem was that it needed to reveal a few of these hotel discounts to travelers to attract them to sign up for the program, and hoteliers objected to freely displaying these generally concealed, or opaque, rates to customers without the stiff defense of a paywall.
Critics stated Kaufer– and Tripadvisor– should have learnt about these problems when launching the program, and certainly they did.
Tripadvisor’s stock rate dropped on the news about the modifications to Tripadvisor Plus as the company had actually been exceptionally bullish about its potential. Membership programs, including one from eDreams in Spain, have been gaining ground in the travel market and beyond, namely with Amazon Prime as the best example.
In an interview with Skift Research’s Seth Borko at Skift Global Online Forum at TWA Hotel at JFK several days after the program modification in September, Kaufer said: “Sure. We understood rate parity– because we’ve been in business a long time– is an issue. You also know that providers have contracts that enable them to do whatever they desire when our different rate is shown behind a closed user group. So we had a closed user group aspect. Extremely closed, not just a complimentary membership. But a $99 pay wall that would work. And it did work for a number.”
The problem was that not all of those marked down hotel rates were revealed behind a concrete paywall, and it angered some hotel chains.
Kaufer noted that Tripadvisor Plus had actually notched numerous partnerships with hotel chains and wholesalers. “However to be clear, we remain in the travel web space,” Kaufer said. “We’re moving as quick as we can. I am never ever going to excuse making a shift to a much better product quickly.”
Tripadvisor Plus was only the latest product miss out on for Tripadvisor, which grew to be a household name brand around the globe based on its user reviews of hotels and dining establishments. However it had a hard time to pick up speed from there after making that mark, and Google, with its market dominance, stole a lot of Tripadvisor’s traffic.
Tripadvisor, which at one point was an essential marketing platform for online travel bureau and hotels, a number of years ago tried to change itself into a website that offered lots of hotels bookings on Tripadvisor itself without having to refer tourists metasearch-style to other sites to finish their reservations. Tripadvisor called its online travel agency-like feature Instant Book.
Prior to that– and presently– Tripadvisor is mainly taken part in metasearch, which in essence suggests leading tourists to online travel agency and hotel websites to finish their hotel bookings.
But tourists weren’t accustomed to considering Tripadvisor as another Expedia, Priceline or Booking.com, where they can reserve hotels. So Tripadvisor largely deserted Immediate Reserve to search for a new success formula.
Tripadvisor had lots of wins over the years, particularly in its earlier days. When owned by Expedia before being spun off into a standalone pubic company in late 2011, it was an all-star in Expedia’s brand portfolio.
In Skift’s narrative history of online travel, now-former Expedia CEO Dara Khosrowshahi explained what he thought of Kaufer and why Khosrowshahi’s IAC agreed to acquire Tripadvisor in early 2004.
” [I was attracted by] the depth of technical understanding about the product, the passion that they had for their company and the absolute conviction that speed wins,” Khosrowshahi, who’s currently CEO of Uber, stated in 2016. “Which is something that Steve was constantly talking about. The mix of those three, which was technical understanding, passion and Steve truly persuaded me that this might be a winning group. There are extremely few people who can take a business from establishing to true scale. Those are unique people and Steve is one of those.”
Khosrowshahi said in 2016 that when he initially took the reins of Expedia in 2005, after its spinoff from Barry Diller’s IAC, that having Tripadvisor and Kaufer in the fold saved Khosrowshahi as he struggled to discover his footing as a public company CEO.
But Tripadvisor, even prior to the pandemic, had substantial problems in attempting to reinvent itself.
In early 2020, Skift released What’s Incorrect at Tripadvisor?, citing its issues combatting Google’s inroads; the company’s aborted pivot to becoming more a booking site in addition to window shopping; an ill-advised shift, which it likewise reversed, to becoming more of a travel inspiration website with a revamped news feed; and the issues inherent in being a controlled company where experts rule the day.
However while a shakeup may be called for after twenty years with Kaufer at the helm, the genuine concern is among method: How can Tripadvisor restore its mojo in a hyper-competitive environment where Google wields a lot power.