Q1 2020 Earnings Call
[music].
Time, I would like to turn the conference call over to Tripadvisors, Vice President of Investor Relations Mr. will lines. Please go ahead.
Thanks, Andy Good morning, everyone welcome to our call joining me today, our CEO, Steve copper and our CFO Ernst Teunissen last night after market close we distributed and filed our first quarter 2020 earnings release. It made available our shareholder letter on our Investor Relations website located at IR Dot trip advisor Dot com.
At least you will find reconciliations of non-GAAP financial measures to most comparable GAAP financial measures discussed on this call also our IR site, you will find supplemental financial information, which contains reconciliations of certain non-GAAP financial measures discussed on this call as well as other metrics.
Before we begin I'd like to remind you that this call may contain estimates and other forward looking statements that represent management's views as of today may eight 2020.
Tripadvisor disclaims any obligation to update these facts to reflect future events or circumstances. Please refer to our earnings releases wells are filings with the FCC for information concerning factors that could cause actual results to differ materially from those forward looking statements with that that's called the Steve.
Thank you well and good morning, everyone. Thank you for joining our call.
We're living in unprecedented times impacting all of our personal lives in hitting the travel industry hard.
First those on the front lines in the medical profession into the everyday heroes working at our local grocery stores or delivery services.
Thank you.
To our partners and suppliers in the travel industry, who are struggling with the sudden drop in business.
We understand your pain and we are helping you know all the ways we can.
Into our employees know that your hard work during this challenging time is meaningful.
It's trip advisor will play a critical role in helping the travel industry rebound.
As we reported estimated bookings and revenue related activity activity generally it's been down by more than 90% since late March.
Equal stabilized at these low year over year performance levels.
We acknowledge industry estimates around travels long road to recovery. However, we are encouraged by some early small science in recent weeks that show consumer demand is picking back up.
We create advisor in the industry, we'll get through this high level will return.
It was accepted as a fundamental human right and so many parts of the world.
We believe our core strategy to help guide travelers on trips that really matter to them is not only compelling and differentiated.
Even more essential in times like this we're travelers have high anxiety and uncertainty.
It's Ernst will discuss in a minute.
Streamlined or cost profile and solidified our financial position to whether this endemic.
And we believe or trusted brand in customer focus platform enables us to help get the world traveling again.
Ernst.
Thank you Steve Good morning, everyone. We've obviously been very focused on liquidity and cost since the cobot crisis has hit and I went to highlight where we are on this.
First our cost structure, we took a number of cost reduction steps in response to cobot <unk>.
<unk> reduced headcount in the form of layoff impacting about 900 people nearly a quarter of our workforce.
We have also for a lot about 850 people, mostly at the Fourq I know that I note that although similar in size as though they off the furloughing contributes much less the cost savings because it tends to include lower wage personnel and we pay top ups to wasn't where he's got from governments up subsidize programs.
Further cost reductions include a temporary reduction of work in the lower pay for most remaining employees and some reductions the benefits.
This is all in addition to removing pretty much all of our discretionary cost we had in our plan.
So these measures lower our cost significantly in Q2, and the rest of the year for clarity when I could cost reductions in these remarks I refer to expenses between revenue and EBITDA, so not full GAAP expense.
A fixed cost the cost excluding Cogs in performance marketing expenses fixed costs are coming down 25% in Q2, and almost 40% in Q3 versus the Q1 starting level that we had this year.
Absolute terms that is a reduction by $45 million of these fixed cost expenses for Q2 and 65 for Q3 65 million for Q3, So a total of $110 million for six months ago relative to the levels that we are started that.
And I know that the Q1 level I'm comparing against was already lower than the average quarter in 2019.
Because we have hasn't really taken other cost measures.
So year over year, our cost savings or even more significant.
And of course, all variable cost Cogs performance marketing is coming straight down with revenue as Steve said, we've been we've see revenue related activity down more than 90% recently.
And so in Q2, we expect Cogs in performance marketing to come down by about $50 million from the Q1 level.
To a number.
Under $10 million.
This is additional to these fixed cost reductions that I was talking about.
Of course, we will invest more in variable expenses in Q2 revenue recovers faster than anticipated.
Importantly, not only do these cost measures preserve cash, but also they will position our personnel very well in that recovery into 2021.
We will be leaner more focused on the highest for your work is in the business and we expect much of the fixed cost savings to remain when <unk> revenue recovers.
Now to our liquidity position.
We're very pleased to announce this week that we agreed to an amendment to our credit facility with our bank syndicate.
We had a large facility in place before called it weve already enough capacity to be comfortably fundless through downside scenarios. You mentioned, we agreed this week. Additionally, and importantly gives us a holiday on the main leverage covenant until Q3 of 2021, which helps us navigate appeared with EBITDA under significant pressure.
Hi, even under very adverse scenarios with even under scenarios with little or no recovery you travel in 2020, we are confident confident we have not booked and liquidity and the ability to stay complying with covenants over the next two years.
As Steve mentioned revenue visibility remains limited.
We are expecting a significant EBITDA loss in Q2.
And we believe this is likely to persist at least through Q3, assuming the travel industry has a slow recovery.
So, although we expect Q3 productive to accrue versus Q2.
But as highlighted above we believe we are well positioned to weather the storm and here, who do you for your very well positioned to come out of the storm in a solid financial shape.
With that we will now open the call for questions.
Thank you ladies and gentlemen, if you have a question. Please press the star and the one key on your telephone.
If you like removed yourself from the Q. Please press the pound key once again that star one to ask a question.
First question comes from the line of Deepak must have non with Barclays. Your line is open.
Great. Thanks for taking the question guys. Steve how are you thinking about positioning threat for the recovery Oh, both in terms of chronic and business model.
You have a great random travel and travel and traffic is always you know.
Very strong, but the various assets that you have historically had been like very disconnected from a user experience and to some extent under monetized compared to other media theaters. So how are you thinking about perhaps but you know realigning the product using this dive into a more broadly integrated experience and then also potentially explore new.
Monetization models around those thank you.
Hi, Thanks, Deepak that that's a great question and it does dovetail very much with what we're doing internally I Oh, we have a oh fully centralized b to C organisation trip advisor now that kind of follows or is as an extension.
On the one trip advisor vision that we had talked about for the last couple of quarters.
The key element to that is truly helping the traveler plan all of the things that they need for this considered trip.
So instead of four in comparison to someone for shopping for hotel and then maybe shopping for an experienced leader, we really are aiming to have our travelers plan the entire trip with us.
No matter, which category they happen to started.
That's considered trip a huge tam.
Great positioning with respect to were in comparison to a search engine like Google or a where someone that just cells and airline flight or a hotel.
And leverage is very much the brand trust that people happiness in trip advisor to guide them through that whole journey.
So we have to the second part of your question, we haven't an excellent monetization vehicle for when someone is in hotel shopping mood or experience shopping mode, and we've grown our restaurant media business quite well when they're looking for places to eat our biggest challenge has been enabling.
People to plan the entire trip around it so that we get not just a bite at when they're looking for a hotel for restaurant or traction, but since every considered trip involves at the minimum all three components, how do we help the traveler and therefore monetize all those deferred.
Components.
Add to that some initial efforts on.
Leveraging the large consumer base with direct to consumer products and I think we have both the considered trip monetize more for every considered shopper that we have and some new offerings going after new revenue streams, namely direct to consumer as a potentially.
And opportunities ahead that weve never tapped into before.
Okay. Thanks, Steve.
Sure.
Thank you and our next question comes from the need Khan with Suntrust. Your line is open.
Yeah. Thank you all.
Acquired some color on the on the uptick or that you're seeing in bookings at over 90 days out how much of an improvement is that and.
Is it primarily in regions, where loved don't have been east or is it more broad based can talk about that and then just with respect to the head count reduction.
How did that affect your plans to build out more features and functionality for the banner display side.
That's just those two.
Sure So I.
I want to caution folks the uptick we're seeing is modest it's not anything that I would characterize as a big rebound, which obviously makes sense given that the luck downs in many parts of the world are easing, but are not off and so therefore, you know it starts to.
It starts to come back and we're probably in the early indicator as people are thinking about the trip, but not yet booking yet or on our site. So traffic is starting to come back a pretty much round around the globe.
The question on or how will the head count reductions change what we invested in what we're investing in yes, we're having to focus.
On some of these core things that matter to us, but growing or media business to better monetize all of our unique audience Hi, It's certainly something we view as a high priority and so I I would.
I would recall that the key points that that I made in the past call in this one in terms of helping a traveler.
Guiding a traveler through their consider trip continue be investing there we will continue to be investing in our need to be businesses, both with experiences and obviously our hotel auction.
And Oh, and then the display or general media business continues to be we expect a very nice growth driver for us.
San gets too.
Of course.
Thank you enter next question comes from the line as Lloyd Wamsley Deutsche Bank. Your line is open.
I think I'm looking at kind of longer dated queries. It looks like there's not a lot of auction density.
Right now just anecdotally, obviously not not much demand out there right now but wondering.
Yeah, we are your customers falling below minimum CPC levels, or just kind of exiting altogether like what what's causing some of some of that beyond the obvious and then you know how are your conversations with customers in terms of when they're likely to come back to auctions you know what they need to see or do you think it will be.
Pretty pretty quickly as convergence start to come up any any sense for that.
And then and then secondly, I guess just on the subscription listing business can you give us a sense for how big that isn't how that's holding up.
In light of everything going on thanks.
Oh sure I'll take the auction a question that maybe Ernst on subscription I, you may see a little well called dislocation in the auction at the moment or over the past week or two as many of our clients had to do with very quick a reallocation of very quick.
Pull back I, but if we look at Pryor recessions prior big challenges to the travel industry.
Those companies that had an interesting demand footprint. We're in a we're in good position because so many of the companies that have big fixed assets be it planes or north case hotels.
Our very hungry for demand and the travelers on trip advisor and other you know front in media sites become very valuable so I would.
I'd say I'm cautiously optimistic that many of our current clients certainly the big folks will be very eager to get access to the auction that we have on our site and so as demand picks up those eyeballs are that much more valuable.
I'll turn it to Ernst.
Oh, yes in terms of the subscription or the subscriptions, yes, they're holding up better than the auction subscriptions obviously are.
Longer term or off the year termed the our renewals coming up which which might be under under pressure, but overall revenue stream has held up better than a than the auction revenue stream.
We've been helpful to some partners by.
Pushing out some payments, but in terms of the national revenue. We are we're expecting more limited he's got to target right to the auction.
Okay. Thank you.
Thank you and then next question comes from Jed Kelly with Oppenheimer. Your line is open.
Great. Thanks for taking my question two if I may 1st question, just I should how do you see your Mehta arching evolving into the recovery I mean is there any way you potentially could I can diversify your revenue among your partners and then on your activity.
These I guess traveler health and safety is going to be a pretty big priority. So how do you view your supply you still want to have them a lot of supplier or will you scale. It down to work with a couple of partners that are that our trusted. Thank you.
Sure. So one not a minute evolving I I really do I believe we will have oh, all the major.
He's.
Certainly the major change eager for our demand so.
I I think.
Hi.
Well, we will we might called the liquidity of the auction a will be strong and people would be fighting over travelers on oversight and others.
With respect to the traveler health and safety absolutely important arguably the biggest challenge not just in in an informational context, but what are the airlines and hotels.
I know the travel companies actually doing to.
Provide to see experience for travel.
Oh, we expect a and we would hope to be a major information hub to help travelers in exactly that concern people turn to trip advisor because we are a a very trusted brand and we expect to share as much information as we can gather about.
Safety related issues in anywhere you are going as well as what you're staying and what you may choose to do well you were there.
Hi.
We think that that will be a major benefit to travelers, helping them get comfortable to get back on the road.
As many others have pointed out probably trip so we'll move towards more domestic travel than international which works very well for us because we have.
We're not our businesses not centered around a dozen top cities. Our business is centered around everywhere at travelers interested in doing so we have re content reach ways I don't think to your question, specifically will need to scaled down supply were simply going to be informing.
Our travelers.
About the safety considerations that they may have questions about you know all of our categories and with that.
And our community to answer questions I would hope you would be I would expect we would be a major source of valuable information.
Our hundreds of millions or billions of travelers.
Thank you.
Thank you enter following question comes from Brad Erickson with Needham and company. Your line is okay.
Hi, Thanks, just a couple of first you talked about variable costs basically coming down as quickly and kind of inline with what you're seeing revenue wise. Conversely, I guess, when we look towards the recovery.
Uh huh.
Do you see any revenue that you might start to generate to correlate. It really is a function of like basically a bookings rebound we might see from hotels are the on T.A. is kind of that the right formula for how to think about me sort of a shape of recovery and then just what you're hearing from your customers. Specifically that leads you to comment just generally that Q3, it'll be better than Q2, and then just.
A quick follow up.
Hi.
So I'll take that to begin well sorry, yeah I wasn't I was on a I was on mute some of the technical glitches in the Cobot era, Brad. Thank you.
In terms of variable cost so variable cost, mostly cogs and performance marketing, it's very limited.
Linear with revenue and bookings and so for our hotel business, but also for our experiences and dining business and across the board really so expect when revenue comes back expect these variable cost to grow broadly in line that these.
And you asked about partners, yes, if our partners on the hotel side see bookings growth they are likely to spend on our channel and we're likely to want to invest variable marketing expense as well.
Against that and across other parts of business, where we have our own a supply for instance experiences. So we will also when we see the demand pick up that spend more on the variable cost side. So I said in my opening remarks that we'd expect those levels to be very very down in Q2 I said.
Maybe under 10 million between Cogs and.
And external marketing and performance marketing that of course, we're happy if revenue comes back more quickly we're happy to pick up the pace and spend more on that because that means more revenue will come.
The reason why are we believe the Q3 will look better than Q2 is Q2, our assumption for Q2 is that it stays pretty much at where we are today and so we've we've commented on.
Bookings and other revenue related indicators for our business to be down over 90% right. Now in end of March and April we expect that to more or less extend into the rest of the quarter. Maybe there is upside to that maybe there's a recovery faster in a in June but were not banking on that near term. We are expecting that there will be more of a recovery of red.
The new.
Into Q3 still very much down year over year.
But more of a recovery than we've seen in Q2, and we believe are now really at the bottom level.
Also as I highlighted some of other cost savings that we are that we're instituting and picking benefit all and I said that we expect Q3 benefits to be higher than Q2 benefits. That's because we get a full quarter of some of these cost reductions that we've made in Q2, we only get part part of the quarter for that so that that together.
In the statement that we expect Q3 EBITDA performance.
[music].
Got it and then just a quick housekeeping you guys report or average monthly uniques for the quarter anywhere I saw there. The number for Q3 of 19, just curious where that number shook out for Q1 of 20.
Thanks.
Average, mostly mix what sorry.
Just average monthly uniques.
On the Oh uniques.
No we've not reported that the square two quarters.
One is open.
[noise]. Thanks, a bunch of particular question it may be one big picture and and one so the housekeeping matter, Steve bigger picture you know, we talked a little bit about some of the dynamics of where you want to invest in the the portfolio of assets. You out you can you share your world you on how you think maybe the industry my consolidate or that might <unk>.
<unk> of the industry that a scale becomes more important on the other side with cold in 19, obviously pretty unprecedented in what we're living through right now and I'm just kind of curious for for your views on how the industry might evolve on the other side of this and then coming back to the deal that was announced it November with trip Dot com.
China.
My understanding of that deal if they had to purchase and the open market within a year to maintain the board C.G.O., if they've made any such purchases and and how is that relationship evolving or how could that be implemented in the next couple of years. Thanks. So much.
I think there.
I'll take the first part about it in terms of.
<unk>.
The biggest macro level from a traveler perspective.
Things are going to changing travel in a two three your time frame.
I got to say nothing much people love to travel it's.
More and more of the younger generation is growing up looking for.
Answers and travel always read Super highly on on what people want to do so the demand I believe will be there. So.
So then what happens in a supply side.
Especially in the midst of is endemic certainly we feel for all of these hotels out there that are going through an incredibly rough patch and unfortunately, one can guess that a number are gonna be recapitalised in one form or another.
But if you leave my prediction that the demand will be returning within a couple of years at least then you have seen need for accommodations and so the hotels me come under a different flag or maybe reborn under different ownership in general.
But there there.
And.
Perhaps more will join chains, perhaps the reverse that's that's a bit tough for me to read right now on the attraction side of things going to the other big suppliers that we care about yes, Ah again Super tough time, and there may be a thinning out that would be.
Unfortunate from our perspective.
But where there's a need and where that demand will grow those two two providers will quickly come back into business in many of those are not highly capital intensive. So so they can spring back restaurants again, some closures some reopenings as as demand emerges.
Big.
Super Big macro level, you already have such a consolidation amongst the big go T.A.S that there's not much further that back and go in my opinion at least so it's not clear that there's going to be tectonic shifts in the travel space that we will look.
Back in three or five years, and say Wow look what this pandemic caused in terms of the big supply the big suppliers of the big intermediaries being consolidated but again just just my two cents.
You're quite a second question about trip Dot com, yes excited about that a relationship excited about the opportunity that we have together the joint venture in China that we're working on together now has moved through its transition phase in a is now implementing the strategy.
Or the business and we're excited to work on that with with trip Dot com.
As you point out there is a an ongoing step with <unk>. There are some regulatory approvals that are still required before we get there, but we continue to have a strong relationship with c. dripping her excited about the partnership that report.
Thank you and then next question comes from alignment Palm right <unk>.
Oh, great. Thanks, Steve I think you made some comments about.
Expecting kind of a rebound in the hotel auction in a recovery and on one hand, I I guess that makes sense that the larger cities.
It might be in sort of a land grab mode, given everyone's been dark for awhile, but just curious if there's any more color you can give on kind of what gives you confidence about that you know given that those big advertisers have been kind of leaning away a bit from the Metasearch channel in recent quarters, and then just a follow up.
Just curious if there's any update on <unk>. How you guys are thinking about alternative accommodations or vacation rentals, you know that category have your views changed their given the pandemic. Thanks.
I think some good question.
I'd I'd say when looking at how I expect hotel chains.
I used to play in our Metasearch environment or any at a search environment I'm simply going off of Ah you know prior downturns and the basic economics that say the individual hotels are going to be very hungry for demand because there'll be operating.
And there's a huge difference to them, whether they're operating out of 40% occupancy yours, 60% occupancy.
So they will naturally turn to us as well as though to <unk> to help fill the rooms and as they.
Are willing to pay more in a marketing way that ends up coming back directly to us or through the O.T.A. channel, if they're making more money than than they are willing to spend more on various channels.
Hi.
More succinctly I'm drawing on past experience in this case demand hasn't really brought back hasn't really come back yet in a way that that allows me to have evidence to prove it one way or the other but I certainly think it's they're reasonable.
Pieces based upon history.
The second question on rentals.
You know rentals alternative accommodations are clearly an important choice for consumers to have you believe in maintaining that choice on or platform.
It's all about helping guide the travelers on their consider trip in in many many cases, having an entire home is is better than a couple of rooms in a hotel. So I don't think our views have changed disappoint certainly not with respect to the pandemic.
There's an argument that says alternative accommodations come back a little quicker than hotels.
But you know probably on the margin and I'm not even sure that I I personally by into that I find anecdotally different opinions, depending on different demographics I speak with.
[laughter].
<unk>.
Certainly.
<unk>.
Yeah, and the next question concerning a lot the line of V. Horwitz with <unk> [noise].
Great not thanks to the question just just one if I could I guess with with travel likely remaining much more localized in the near term people you know getting in their car and driving to their their new vacation destination. How are you thinking about adjusting your business model in order to capitalize on that trend if at all and how may that affect the I that the model.
I guess in the near term in terms of revenue per user or or any kind of color. There are localized travel would be helpful. Thanks.
Yeah that great comment great observation, we certainly.
I agree with it in our our research would say and all the research I've seen says a domestic trip is going to be much more common than before I. That's great with us we have all the content we need in every country to help folks have a great local trips so on that trip.
Or home page.
If you're coming from the U.S.I.P. or going to see if you fewer times will you be seeing Paris, and Bangkok and much more often it might be in Austin or San Francisco. So we just think Ah it's easy for us to market. This name.
Ones that we already cover very very well to more of with with more of a local audience. In initially it'll be a drive trips, but I think the big delineation is just going to be domestic versus international.
And.
If you were thinking about going you're sitting in Boston, you and you were thinking I'm going to Paris for the summer, it's a consider trip and you're going to be just as interested in my opinion about taking that consider trip somewhere else in the U.S. and so whether it's a a drive or a flight.
It's going to be you need the best place to stay you need advice from your community you need a memorable things to do and wonderful restaurants to eat and we'll have all of that we already have all of that information and we hope to be.
One of if not the most accurate source for a wonderful things to do in each of the countries in which we serve.
In terms of revenue per per user we would expect that to be just a shift if spending that's more domestic spending so not necessarily a change of the revenue we can generate pretty per use.
Oh, Yeah, and the next question on the line or sleep that kind of area with RBC capital markets. Your line is nothing.
Great. Thank you.
Well, how do you how do you see the current environment Bronco that different from maybe Bath recessions in your in your letter you did call out prior sessions and and at a potential for a quick a recovery and because demand for travel Moby there <unk> travelers will want to travel.
How do you compare to go big related downturn versus what the what you've seen in the bathroom and Oh it in L. nine how would the decorating and how we're going to recover maybe definitely thank you.
Thanks, I'll I'll start and lit in earnest toss in some comments I think it it certainly will be different past downturns have been.
Very economically forecast so economically impactful.
Meaning there was always a class of individuals who could afford to travel in would happily go anywhere it was just economically impaired.
Whereas here, even though this pandemic, even those with the ability to take the trip or not going on the trip anywhere at the moment and when the restrictions ease up will likely much forced a domestic.
It's going to be a little hard to fathom, how travel completely returns to normal until there's a vaccine or you know months of no new cases, taking hold and so you know, we all think or many of us think that that that's quite a ways out so with the.
Airlines in hotels and travel suppliers are doing to make people comfortable traveling in the information that we can provide of course helps bring it back but our forecasts.
We think would be quite different worry at night.
I see this painfully were merely a recession versus something that.
Ah causes people meaningful health concerns when traveling.
I don't know if you want to add.
Yeah, not much to add it's obviously a much sharper the travel industry and much sharper reaction much sharper reduction of revenue than Oh boy, seven or eight or nine where.
But that May mean that doesn't mean that the recovery half as much longer than it was a was at that time.
It is that is difficult to forecast what I do observe is is that the economic support structure, the financial markets functioning really well.
And Ah it feels that there is nothing liquidity available for for for companies.
Which at least bodes well for the potential shape, the overall economy economic recovery.
Thank you thank farms.
Thank you.
<unk> question <unk>.
I think thought.
[laughter] a question about.
They made some changes to their to hurt on shopping I made some changes Oh wow.
Price ads or Anneke price that's actually.
You have any thoughts on that.
You expect something like that to happen and traveling.
<unk>.
Thanks.
I.
It's Steve My thoughts I, Yes, we noted what what they were doing the shopping I think the competitive dynamics are are pretty different in the shopping category versus travels so.
Look when when Google makes the change or Google offers new product, we certainly happily look at it and see if it fits or business needs, but I'm not spending a lot of time sort of guessing about whether or something like that is is coming into the travel category.
Okay.
Sure.
Thank you and the next question <unk> with mobile home airline don't they.
Thanks for taking my questions hope everybody's healthy and safe Steve you know just curious as you go to the portfolio review process, how shall we think about your ability in terms of string streamlining your business, even more I'm thinking about maybe a trip advisor China.
Maybe what you necessarily want to be that business or potentially exiting some update geography, oh, even vacation rental business. So another way of looking at categories wait you're not where you do not have a leading opposition specifically thanks.
Thanks, James So I.
I think we did your back look at or China offering and.
And said, yeah, we're not going to be able to do this alone. So we put it into the J.V., which does effectively take it off of our books and to the extent as as the junior J.V. partner see trip or trip Dot com can use all of our content information to help Chinese travelers.
That's clearly a win for us and it's clearly a win for trip Dot com. So kind of on on my check list. That's a great done already achieved the streamlining that I think you're alluding to.
For rentals, it's still in evolution, we want the alternative accommodations to be part of the experienced that trip advisor offers.
We have our own rental supply augmented by some other partners and so how can we further both improve display on our site and knowing that we're not going to be you know the king in the supply area is there a better way that we can deal with.
That part of our business. You also did announced that you are smarter traveled business is being you know some of the brands folded into to trip advisor and we're looking to see whether.
There's some other better homes for some of those brands that we had acquired many many years ago. So the streamlining and in the portfolio review I did happen, it's obviously ongoing.
So that where it enables so that we are able to really focus on what we expect to move we would hope would be you know the big wins in the next three to five year timeframe.
Right. If I can answer follow question <unk> expecting any maybe structural changes.
To your customer behavior, what sounds suppliers diode users sign for example, I'm thinking about maybe experienced the supplies moving to on line faster. So maybe you anticipating to capitalize on that and also maybe help us to think about maybe potential <unk> motto emerging where you can provide content to raise concerns.
Overconfidence of potential result from the potential friction Twain come to travel thanks.
I. So you raised two things certainly online you know more experienced providers coming online I think a number are are doing that we have.
Business unit called broke in which is dedicated to exactly that and they continue to to sell in in the marketplace. It's combined with the channel on both by a tour in trip advisor for when people are ready to do those experiences again that we can help steer them to it so.
I think that's an unnatural.
We already have a lot of supply on or if I have to wear platform. So well I think that's a long term secular benefit to us I don't think it's it's been <unk> particular neat needle mover over the next year.
And then on the confidence to travel I don't viewed as an additional business model, but more the folks who are coming to trip advisor because they're exploring their thinking about a trip. The more we can provide information to make that traveler feel comfortable where appropriate that they can travel safely and stacey.
Eat safely.
Yeah, that's going to help a conversion rate and they're already on our site. So is they convert by booking that experience or or booking that hotel on our side or booking that hotel by clicking off too.
A booking or an expedia or marianne or Hilton, we're in different but because of that raised confidence we've helped the conversion.
Benefits us.
That would add to to both be spongy about the portfolio as well as though the change of structural changes in behavior.
We have obviously Oh <unk> been ruthlessly now ruthlessly focused on what is that we invest died as we said in our in our opening remarks, we have done a layoff close to a quarter of our of our people and so we have very very cautiously no thought about how do we want to allocate.
The 75% that are we're still in a company.
Certain businesses have been Deprioritizing focus.
Certain activities have been the price comparison unfocused and certain activities were really major focused on continued to build our competitive advantage and experiences that you've talked about is one of them experience in dining our our but our growth every other week, we have a very strong competitive position we are.
Investing to remain meters in these industries and we want to emerge.
From from this crisis really in a very very strong position. So looking at opportunities that may or may offer in terms of more rapid online movement that you were saying we're other opportunities if something were super focused on despite the fact that we producer cost.
<unk>.
Thank you.
Think think season or next question comes from Brian Gerald as well as far as <unk>.
Thanks, guys had at at a couple of questions may want to follow up to to Tom's question and Steve I'm wondering from from the traveler point of view are you seeing any nuances with respect to traveler preference score.
Alternative inventory versus proper hotels as we emerge from this hey, I you know I'd, rather stay at some place where they have seals on the doors and you'll be light cleaning versus you know some guys vacation rental so the nuances around that in that second question was around.
Your your dining assets.
Book, a table and and and Wild horse shit as as we emerge from this crisis I think the scheduling aspect of showing up at places right, they're not going to be able to open up another table in the corner to see it you. They're good it's going to be a third pulled to a hassle and they're going to have to.
Measure that and and meter that very carefully how do you feel about the opportunities of those your your dining assets being.
Kind of exacerbated are highlighted as we as we emerged from this.
[noise]. Thanks Bye.
Good questions. The first one unfortunately I don't have have much insight in terms of.
Ah alternative accommodations versus hotel and user preferences, we we've thought about it you see it both ways, but our traffic is such that it's it's insightful at this point in time.
To restaurants, I, yeah, there's a as restaurants open up and they need to reconfigure their tables, especially in Europe, where the restaurants are in fact smaller the four can play quite a useful role from a traveler perspective to make sure there's.
Room, there you don't want to venture out and then sure enough. There's no room at the restaurant, but also from the restaurant management perspective to help.
Educate the restaurant towards that maybe it's time, especially in Europe to shift to two two seatings six P.M. and an eight P.M. over Europe at an A.P.M. and a 10 P.M. a dining opportunity.
<unk>.
And reservation management system helps one do that combined with online capabilities I I don't want to imply that this could be a big driver for for Lafourchette, because the whole restaurant industry is hurting but I.
Think as dining goes back more new habits are going to be formed including making sure I can get a table when I venture out and the fourth does that beautifully so I think it you know.
With big changes comes opportunities and I think before certainly throughout Europe is going to be able to leverage this to help restaurants and travelers even more than before.
And I think more broadly indeed, Steve set of before more broadly trip advisor as a brand is so well trusted we're providing great information to to its users and more information about Steve says layout of a restaurant or how good isn't experience supplier where hotel.
Social distancing cleaning.
<unk> more information is going to be a premium and we think we have we have the brand to to benefit from that.
Awesome. Thanks, guys appreciate it.
Thank you <unk> <unk> <unk>.
<unk>.
Great. Thanks, Steve I was just wondering if you know given the obviously the the world we're living in and now doesn't come along very often is there is there any way that you're looking at this as an opportunity to to revisit some of that some of the things that you may have tried before where it wasn't just say it simply just wasn't the right time in the <unk>.
Stray or the the industry yeah your customers the hotels, maybe weren't necessarily ready for it <unk>.
<unk> Instantbooking comes to mind, but it's not it's not the only thing that I'm, but I'm thinking up here that you know maybe given where the businesses here you have some air cover to try some things that are a little bit more extreme involving your involving your business model just just curious to see it kind of getting.
Beyond the quarter and the current crisis, you know somebody who's been through these before and seen a lot of evolution in the industry. How you might be looking at this isn't it as as an opportunity for trip.
Oh thinks he's a great question you bet, we've been thinking hard about this frankly, not so much from the perspective of of instant booking a though it it may have a role, but really more from reinventing the experience of the travel.
That are coming to trip advisor to plan that important trip and historically because we were so successful in so many categories and we were growing.
Hey, we opted for.
For speed and we opted for focusing on you know conversion around or hotel shopping or expand shopping growing or inventory Oh, you know wide range of things that made a lot of sense and improve the company quite nicely over the past couple of decades.
This is an opportunity we have andar, taking right now to we imagine the consumer experience.
Around that consider trip around the planning aspect where.
Ah consumer a traveler isn't just looking for a hotel or is it just looking for something to do they're looking to have an amazing time, visiting Philadelphia or San Francisco wherever the trip is going and how can we internally and this is product is tech. This is.
You know sharing information. This is great data access this is treating the traveler throughout their life cycle. When the first discovering a location all the way through collecting the five or six things they want to do when they get there and having an amazing itinerary so that they.
So that we're not a stop along the way we're planning a trip, but where the travel where someone is starting however, they found us but with so much wonderful functionality designed around the completing that entire trip.
That they keep coming back and back again to be fair, that's coming at the expense some of the other things that we had been doing for.
A couple of decades in terms of making the hotels shopping path as smoothing frictionless as possible or making sure. We had all the perfect payment types in all the different markets that we were supporting so to your question. We are taking this opportune.
<unk>, where.
Are are the fundamentals of the revenue of our business is dependent upon traffic coming back and we're not able to influence that a lot to really rebuild from much more foundational perspective, how we want the traveler to experience trip planning on trip advisor.
So that as we emerge trips are planned or or or bigger or more complete users were turning to trip advisor many more times and the end of the day or or total unique users per month might go down but repeat rate goes way.
Because we've found the set of audience that is entirely that loves being dependent upon trip advisor for the whole experience versus using as for you know a point task and that's not that's not a one quarter to quarter journey.
But that is I'd say the biggest way that we think this pandemic will will contribute to reinventing trip advisor.
Great I really appreciate the answers to thank you.
<unk>.
Thank you.
And there are no further question time, <unk>, okay, well anymore.
Thank you everyone for for joining the call.
We are navigating tough times.
We have had to bid farewell to a number of exceptional employees.
On behalf of the trip advisor family I want to extend a heartfelt. Thank you these colleagues for their passion and their service.
Into my current teammates a trip advisor.
You were doing an amazing job.
Very proud of how you've all stepped up to help or business partners in the industry.
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The near term remains unpredictable the time and time again, we have seen the hospitality industry recover and thrive.
Concerted actions of solidified or financial position and will help us to merge them more focused business on the other side.
We will continue executing our strategy initial trip advisor plays an influential role with consumers in partners worldwide.
Recovery and beyond.
So thanks, everyone and please stay safe.
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