Q3 2020 Tripadvisor Inc Earnings Call
[music].
As a reminder, today's conference call is being recorded at this time I would like to turn the conference call over to Tripadvisors, Vice President of Investor Relations Mr. will Lyons. Please go ahead.
Thanks, Joel Good morning, everyone and welcome to our call. Joining me today is our CEO, Steve Kaufer, and our CFO Ernst Teunissen.
Last night after market close we distributed and filed our third quarter 2020 earnings release made available our shareholder letter on our Investor Relations website.
At least you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call.
Also on our IR site, you will find supplemental financial information, which includes reconciliations of certain non-GAAP financial measures discussed on this call as well as other metrics.
Before we begin I would like to remind you that this call may contain estimates and other forward looking statements represent management's view as of today November six 2020.
The buzzer disclaims any obligation to update these statements to reflect future events or circumstances.
Please refer to our earnings release as well as our filings with the FCC for information concerning factors that could cause actual results to differ materially from these forward looking statements and now with that I'll pass the call over to Steve.
Thank you will good morning, everyone. Thank you for joining our call.
I'm going to make some summary remarks about the quarter and then will pass the call learns for some remarks on our financials before we open up the call to your questions.
As described in our release and shareholder letter that we posted last night, our third quarter results improved versus the second quarter in the midst of what has been an unprecedented period for our industry and for the world.
Consumer demand and revenue performance as percentages of last year's levels improved each month throughout the quarter.
Well Q3 showed a nice recovery trend in recent months with traveling this week a couple we progress has slowed particularly in Europe supporting our view that the near term path will be uneven.
Fortunately, we have planned appropriately for a variety of recovery scenarios and we're committed to supporting customers consumers and partners grew out.
We also remain confident that with each passing month. The world is closer to important medical developments that will meaningfully restore consumer confidence and travel and allow for a broad based travel we though.
In the meantime, we remain focused on factors inside our control maintaining focus on executing on our one trip advisor initiatives, the deepening customer relationships deliver more value to consumers and partners.
Position the business well for many years to come.
They can great pongratz, despite the challenging backdrop.
In Q3, we expanded our travel safe initiative to include more than 120000, hospitality businesses, enabling them to efficiently communicate permanent health and safety information perspective travelers client engagement and recover faster.
We also recently launched two new B to B products for hospitality clients further signaling our ongoing commitment to sport partners and deliver them more value was traveling dining starts to come back.
And finally within the next few months, we plan on we plan to begin rolling out our first direct to consumer subscription offering and are very excited by this new opportunity to deliver meaningful value the light to premium members.
So what would undoubtedly remains a very difficult operating environment. We are pleased with what we've been able to accomplish.
Before I pass the call Darren I want to once again extend the thank you to all frontline workers for her tireless hard work during this difficult time.
Of course, I also want to thank each and every week first advisor inc. employees, who their talent and dedication.
Better days will come and we are doing what's necessary to emerge stronger than before.
Now I'll turn the call over to art.
Thank you, Steve and good morning, everyone on our last two calls I have described how we quickly adapting our business to its new reality in the third quarter, we minimize operating expenses and generated positive adjusted EBITDA. Despite the fact that revenue was only 35% over last year's comparable period.
We remain squarely on track for over $200 million of fixed and discretionary cost savings this year versus 29 team.
That would be clearly more is there a cost like performance marketing are included.
And our quarterly fixed and discretionary run rate decreased by $67 million in Q3 versus the first quarter up this year.
It's a testament to our business model, our flexible cost structure and proactive cost reduction efforts that we were able to produce positive adjusted EBITDA, even at such sharply reduced revenue levels. This year.
We also strengthened our liquidity position with the bond issuance in Q3 at the end of Q3, we had cash of nearly $450 million as well as a $1 billion of undrawn capacity on our credit facility, which keeps us adequately prepared for a variety of corporate recovery scenarios, we believe that our concerted cost savings in our.
Turning efforts combined with the many new revenue initiatives that Steve just mentioned and we'll talk more about on this call.
That's an excellent position to benefit financially when the travel market inevitably comes comes Roaring back.
With that we will now open it up for your questions.
Thank you to ask a question you will need to press star one on your telephone.
So let's try a question press the pound key in the interest of time, we ask that you. Please limit yourself to one question and one follow up please.
Please standby will be compiled it kinda roster.
Our first question comes from de pop my sales in <unk> with Barclays. Your line is now open.
Right Hey, guys. Thanks for taking the question just two quick ones from Us first.
We're not looking to jump the gun, but can you provide more color on the subscription offering what will it look like and kind of what are your medium to long term goals with this product you know.
Well, it's on the supply side and on the consumer side, who would be the ideal suppliers for this program and then second question on the hotel business can you talk a little bit about the competitive dynamics on the option side that you saw as travel demand wasn't rebounding during the summer months and dollar tree Gil you know, where OTI ace and supply is coming back to the <unk>.
Platform, how does the participation from hotel chains and other suppliers during that time.
Excellent. Thanks, Steve This is Steve Hi, Great question, so the new consumer.
And were subscription offering launching in a couple of months.
Hey, we're looking to provide meaningful additional value for premium members. So if you're buying into the subscription.
Package she'd be able to get discounts on tens of thousands so eventually more and more hotels all around the globe, you'll get a discount off all the attractions. We sell last count was close to 400000 a experiences.
Right and there's plenty more if you think about it the things that we can add to the bundle when you think about our relationship with hotel your.
Hi, we have direct supply and we have supplied through Aggregators and we're looking to present, an offering to our travelers that not only saves them money. It gives them a that traveler especial experience Oh, yeah, everyone loves to feel like they.
They are.
Treated special that they are delighted when they go traveling not only by where they're going but how they are treated as a guest at a hotel or rather the experience we feel that.
Our demands on trip advisor side or relationship suppliers put us in a wonderful position to be able to come up with a with a subscription offering in that thing.
If you look at the overall picture, we have we're pretty cold the times and north of 400 million unique users on our site that we're looking to plan a trip we feel that a good number of them would clearly be interested in that extra special for the discount.
Well, the the better experience the extra the extra or something.
And then I when you look at our supply side, we have relationships with all of the aggregators and tens or hundreds of thousands of properties and attractions throughout the globe. So we kind of have pieces of the marketplace and our opportunities to connect them in a premium package.
[noise] by moving on to the second question on the auction we've seen the OTI age.
He quite rational in their behavior, they're looking for demand through all channels.
Hotels are looking through demand through all channels, including the OTA is not as well is that the boss who were so high.
I think the easiest way to look at our auction is that it's recovering in line with how.
Well, the overall travel footprint or do a world travel ecosystem this recovery.
Hotel leaders need demand of course and are coming to us and they are coming to the old T A's and via the OTI AIDS to us and so were the auction is essentially the heaping ads as we would expect and as much as that's a regional answer it's behaving regionally in those same areas.
Hi.
I Ernst do you want to add anything to that.
Oh, I guess on the auction I would add clearly as the cold it unfolded in April I made it was significant the auction in terms of volume in terms of cpcs down conversion rates being down.
And also our partners being quite carefully I think what we're seeing right. Now is obviously volumes have gone up in periods. Since then a CP.
Cpcs have improved because conversion rates have improved in the meantime, but volume and and conversion rates are still down from pre cobot Cobot times are.
In the early days, our take rate if you want to call. It the how much we got paid per booking delivered for for OTI age was down as well as the bidding was careful that has sort of normalize now and so we are finding that our partners are willing to pay again for the bookings like they were like they were before.
That's very helpful. Thanks on specs to.
Thank you. Our next question comes from Lloyd Walmsley with Deutsche Bank. Your line is now open.
Hi, Thanks. This is Chris on for Lloyd maybe one longer term question on the hotel auction you guys have been deemphasizing this business and your overall mix prior to the pandemic. So.
Just thinking longer term.
Longer assume that over time, you're moving towards taking the performance market effectively to zero for this business or is this really not the right way to be thinking about it.
And then just maybe coming back a little bit and focusing on 2021.
You talked about coming out of the quarter.
Results were better than internal projections back in August to maybe if you could just talk talk to us a little bit about how Ah getting threeq you under your belt help refine your 21 strategy. Thanks.
Hi, Thanks, Chris maybe I'll take the first starts to say hi.
In terms of I know a thought about deemphasizing the auction I no no no the auction and that hotel.
Search capabilities, finding the best hotel for your trip.
Remains and will always remain a core asset a core value that we're bringing to travelers hi, as such as we get a better AD performance marketing on terms of us buying traffic to that.
Shopping experience I would expect would always remain when you add in the subscription offerings and the other so the direct to consumer or things that we plan because as you know we've already launched a couple and this this new subscription offering will be a third it's yet another opportunity to them on.
It ties the traffic that we bring to the site organically or through paid channels or or repeat efforts all the different ways that get.
Get up to the hundreds millions of users and so.
For us the subscription with a the auction and the way. It's running we do you expect that to continue and performance marketing will probably always played a role in that.
In terms of your if your second question.
Our visibility of course, the oldest in that in the near to medium term remains limited. We said last quarter that we think the recovery may have an uneven path and I think we're seeing that right now Q3 was stronger than we expected.
Yeah, our European business again performed very strongly in this third quarter.
In the Fourq, our reservation business on the restaurants did very well in the current quarter and now we're seeing at the start of the fourth quarter or some of these trends are.
Are different and so we see Europe now taking a step back with all the lockdowns that we're in and so we're careful and conservative in our outlook for Q4, and you're seeing right now in our business that for instance, the restaurants in the business for the fourth is is trending down from that from Q3 with all the lockdowns.
And so it's going to be uneven recovery, we we remain.
Bullish and optimistic about the recovery of the travel market in the next periods to come we think travel will recover fully.
I want to highlight sometimes lost a trip advisor skews almost exclusively to leisure travel and we think leisure travel will be that the part of the travel market that will come come back the fastest.
We're looking forward to 2021, we're looking forward to hopefully on the medical side seeing progress in vaccine being rolled out and we're looking forward to where to recovery of the travel market, but in the meantime, it's it's patchy and we're seeing that right now in Q4 that doesn't take away from our.
From our enthusiasm of being ready to act to compact pulling back when the market comes back we've done everything we think that is prudent at this point, we've cut our cost quite significantly.
We have the funding in place.
We are able to weather these ups and downs that we are in right now and we think we've actually adjusted our cost position very attractively now because we might.
I might add back some cost when the market recovers, but not all and so we think that actually will come out with a with an improved cost structure when when the market returns. So we're waiting for that in the meantime sales will be retired we patchy looking.
Looking forward to walk towards 2021, we are focused on what we should be focused on being prudent on costs. While the situation has been resolved at the meantime, developing some exciting new tenants.
Tenants of our strategy I think the.
The revenue initiatives that we're rolling out right now that could have some real legs that you're.
You're not going to see that in Q4, it you're not going to see that in Q Q1, maybe.
But we are going to see that and when the market comes back and so we're excited about positioning ourselves correctly for 2021.
Got it appreciate the color.
Thank you. Our next question comes from shorter maturity out with RBC capital markets. Your line is now open.
Great. Thank you let me try to please.
Are you expecting first one is do you expect to put some marketing dollars behind a subscription product and maybe build that awareness. So that when consumers are ready they can subscribe it as they see value in that product and then second is on engagement any update on how you saw.
Engagement trends among your members so not only members membership growth or improvement, but Dan how are they in drafting <unk> did you see improvement through the quarter. Thank you.
Hi, excellent think sweater.
So in terms of do we need to apply or do we plan to play marketing dollars on.
On the subscription.
The way we look at it is we have 400 million unique users on our side. So we're planning a trip there in some stage of planning that trip. They are already in a planned slash spine mode. So our opportunity with the subscription product here is while they are on the site.
Presents the value proposition in such a way that it becomes a no brainer really simple so naturally you're planning a trip to a.
To Cancun.
You're examining a couple of hotels, it's it's a it's a consider trip script that matters you it's likely to be on.
On the higher end and you're going to be doing some activities. There and then you get an opportunity to see a subscription product that were to see a product offering that saves you meaningful dollars on the hotel that you wanted to stay at anyway is offers discounts on the tours and activities that you wanted to do and can cool.
And maybe as you look at the savings that we can offer instantly on this trip versus the subscription price that becomes kind of a no brainer. It becomes a very easy opportunity without your question any incremental marketing costs for us the educated consumer at the time that ready to go.
By that this is a great deal and we of course expect the consumer will continue to shop around to make sure that this is the hotel they want to stay at that there is a deal that we're offering using SEC better than what they can find another sites and when that consumer is convinced that well yes.
Actually is saving money for them and that hotel is offering a chance for a free upgrade or a spa dining credits or something else there that make that state extra special.
Combine that kind of a win for the consumer.
The ability to use the subscription products for the next entire year.
I think that's kind of the experience we're aiming for and then of course when the travelers on trip experiencing the benefits you know the money they saved on the hotel they might be able to do an extra.
An extra special meal, the upgrade with the Ocean view, how exciting is that though remember that its trip advisor that.
Right. Then this enhanced experience like that subscription of course that flows into the logic or whether they renewed a year later.
Hi to you were a second question on engagement of members I, Yes, certainly.
Numbers or art as engaged as the average traveler during during this pandemic.
Not sure we see a particularly different type of behavior on the side, everyone. A member nod to Super concerned about safety. They want to go to a more outdoors war.
Less urban more suburban.
Super been more out of the way more National Park I trip.
I don't think we've seen a split along member November lines and.
And of course, because the members we have the ability to suggest they come back for some of those.
Types of trip that the more likely to take the RCR and channels.
So as.
As you suspected membership continues to grow but I can't point to anything, particularly meaningful that's different in members versus non members at the moment.
Okay. Thanks, Steve.
Thank you. Our next question comes from now that can lead to a securities. Your line is now open.
All right. Thanks, a lot.
A couple of questions from me can you help us on our fourth quarter outlook, a little bit maybe.
So you expect or.
Revenues to be up performance to be modestly below third quarter can you maybe talk about the.
The spirit of revenue for the hotel business between.
You asked about shows a non U.S. I kind of remember it being two thirds U.S. a one times.
International and then the restaurant segment is all European how should we be thinking about that image to the lockdowns.
Yes, I'm not that.
Hi.
The our Europe business is.
We don't break it out but as a is a minority of our business that has impacted.
You asked is more significant.
The trends that we're seeing right now for instance in the hotel business is that.
The U.S. is coming.
Compare to where we were in September we'll end up holding up more or less at the same sort of recoveries recovery levels. So not too much change moving from September to October.
Into November.
The Big change we have seen is in Europe with the law firms that have been introduced there weve.
We've seen that on the hotel side and we've seen it on the restaurant side as well.
Most correct about your statement about dining and the skew to Europe. The Fourq is almost exclusively in Europe, our reservation business bid in Australia, but in South America, but almost exclusively in Europe.
So thats very significantly impacted by the Lockdowns and that's the majority of our dining revenue.
But there is also a component or dining revenue that is in the U.S., which is our true. It is our business to business component no subscription services and other marketing services, we sell two restaurants.
But.
The largest part is your hope that business, you're correct about that.
That's very helpful.
A quick follow up if I may so.
So on the on the fixed cost savings of six to 7 million that you had in third quarter. If I just annualize that it could sit on 270 million.
Oh, but then obviously.
You did say that you expect to retain most okay, but not obviously on effect when things do turn around so.
If I had to think about 2021 can you give us some some guy like bullish about how much of this can be a sustained decline in terms of cost savings.
There are there are when the market comes back we are going to be some cost that we will naturally have to add back.
Just as an example, we are not operating at the officers right now our assistance or most of our offices are close with these larger ones are close and.
When we reopen some of them for structure cost will come back.
There is always some some other inflationary pressure to to cost and when the market comes back we may invest behind some strategic initiatives like our subscription product.
But the we have found after taking out this much cost as you often do is that we.
We have become more efficient we're targeting much more on the things that really matter for our strategy and we're looking around and we're saying Hey, This actually works for us as well, we don't have to add back all this cost. So I don't have a specific number for you yet for 2021, but.
And we will add back some cost I believe.
Add back the cost even if the market comes back.
Great. Thank you.
Thank you. Our next question comes from James Lee with Mizuho Securities. Your line is now open.
Thanks for taking my questions. Steve I was wondering you know given the fact that we see a pretty meaningful mix shift towards alternative accommodations here.
I was wondering maybe what do you think about your strategy.
Kitchen rentals, where you'd be more focus on going forward like making more investments in that segment and also secondly, you know with T. Com seal on your board right now anything you have learned off on the company's specifically they certainly have a reputation on merchandising and bundling I was wondering anything you can.
Pickup from their perspective thanks.
Hi, Thanks, James Hi, so to begin with on the alternative accommodation question.
Okay.
Absolutely combinations are alternative accommodations are a key part of our future.
We have a reasonable footprint that we're looking to augment and the trick if you want to challenge the opportunity. If you talk to a trip advisor or most of the other kids is figuring out the way too much.
Mix in that alternative accommodation mix into the defaults or the opportunity to help teach travelers that there. There are these great options out there by because it is a growing category and we fully expect to.
To have that a growing part of our mix as well I don't think the trip advisor brand will stay on for alternative accommodations at any particular point, we are looking to help travelers plan those big trips that matter and.
That involves any type of accommodation fantastic experiences, helping you get there the lending you with inspiring content out of the way things to do.
Hoping helping make that trip is memorable as possible and so alternative accommodation does lodging type plays a role in that but it's not kind of front and center for them.
Hi to the question on.
Having a tripped up Tom on our board James.
Jane Sun a terrific addition for us I I can't.
It wouldn't be right for me to kind of disclose any particular learning as it is I can say however, it's fabulous to have the perspective of one of the major global on T.A. is Ah that has tremendous operating experience not only in China, but.
And so many other parts of the world as we operate very complementary businesses, but obviously very much in the same category in the same space. So I enjoy our interactions quite a bit.
Great I just would get some clarification on your strategy I don't think kitchen rental sounds like your strategy going forward to help to do more help odd traveling do more planning for the accommodation pushing traffic to your suppliers as opposed to sourcing to inventory directly.
Am I reading that correctly.
Well, it's a fair statement that we don't plan to sort of.
Compete with the number of sales reps sourcing supply directly versus everyone else because we feel we can do a better job for our travelers by taking inventory, we have augmenting it with inventories worst by other players to present, a more comprehensive experience but.
We bring to the equation is demand what we bring to.
The equation is the travelers looking for a very considered trips and since alternative accommodations do play an important role in that we just want to have that supply on our system, certainly regardless work without necessarily investing in building.
A or growing our supply organization in order to get.
Great. Thanks.
[noise] thinking.
Our next question comes from Lee Horwitz of Evercore ISI. Your line is now open.
Great. Thanks for the question two if I could maybe on the subscription product in a more normalized demand environment. How do you think about the advertising investments needed to support the subscription product ultimately how do you balance paid advertising versus leveraging your owned and operated space in order to drive subscription growth and.
Then maybe on the revamp cost structure can you help us size the magnitude of these fixed cost savings across your business lines I'd imagine that given the relative size of businesses that much of it is coming out of the hotel, but any help on hotel versus non hotel would be helpful. Thanks, So much.
Sure. Thanks, Lee So certainly at some point, we will be looking to build a brand around the subscription offerings.
I really do want to drive home the point, though that we have north of a 100 million members. We have tens of millions of travelers planning a trip visiting our site every single day. These are all folks who we have the opportunity to introduce or subscription price.
To add there.
Right moment, they are already in travel planning mode or is there a member they already know trip advisor and have been using us perhaps for years. So we think the success of the subscription product will revolve around the value that we're providing to these travelers are helping them.
Understandable for interest just making sure that that math works that the perks the extra experience the delayed and the savings that we're offering the traveler is worked out subscription piece. Unlike another business. If you were to start up the travel subscription business and not have our demand.
Said your question would be spot on how much do you have to spend in order to acquire and whats the lifetime value is going to be for the subscription and can you make that math work.
For us, it's really quite different because we're confident we already have the traffic so where the demand on the site each and every day.
Obviously, we will be stuff, obviously, perhaps but of course, we'll be spending some marketing dollars. If we have some folks going through a path to buy the subscription product and they abandoned we would naturally seek them out to remind them to come back and finish the transaction, but the big win the big opportunity is to leverage.
Traffic that we already have and.
As others have done do with consistent job improving the value over time with our content additional discount special treatment upgrades.
Credits at hotels experiences that are you in destinations that are unique to to a paid membership.
Oh, you offering and you know were that there have been others programs in travel there's certainly plenty of programs like this in other verticals.
Got it.
But again to your question is.
It's not a question of costs that consumer acquisition for us because they're already on our site.
First you want to take the second one.
Yes, Lee in terms of your question about the magnitude of the fixed and discretionary savings across segments are similar on our a similar level of savings year over year as a percentage.
Between our hotel media platform business and experiences and dining more on the other segment.
Great. Thanks, so much.
Thank you. Our next question comes from Tom White with D.A. Davidson. Your line is now open.
Great. Thank you for taking my question, Steve earlier, when you were talking about the subscription offering a you mentioned how kind of your direct connectivity with hoteliers and properties played a role there could you maybe comment on sort of what percentage of your overall properties.
On the site you guys have maybe some level of kind of direct connectivity with.
I eat you know not Juno, T.A., <unk> or through a hotel GDS or something like that and I'm, just curious whether kind of driving more that direct relationship with with properties is a big strategic focus for you guys and.
How you might monetize that itself.
Hi, Thanks, Tom So.
As you saw we announced a couple of additional products in our hospitality solutions offering to new b to B products.
The enhance your reputation as well as deliver business insights to help on your business. So we're constantly evolving and hoping that the sort of tens of thousands of Hoteliers Indies.
Indies, and and as many of the chains as are interested help them grow their business and grow their business using trip advisor.
Hi to the question on the subscription product and how it relates we obviously view that channel direct to hotel years, hi, as a tremendous asset being able to deliver unique value in the subscription products. If you can imagine a hotel year that might have.
Shoulder season and might be perfectly happy to provide.
Discounted room or an extra piece of an extra credit extra part of the experience that are resort to trip advisor members behind our pay gate. So if you think of the overall ecosystem.
There tends to be you many hotels in for rate parity across.
The various channels, but behind a paid gate or subscription good.
Hi, Theres lots of new things that hoteliers can choose to do and we're not by any means inventing this model the price line the hotwire that.
There have been plenty of other very successful examples of how discounted rates and other packaged rates are established distribution channel for hotels.
For the first time, we're bringing that to trip advisor.
In the form of the subscription offering so we shall see and we will learn what hotels are interested in offering to get access a preferred access in some cases to those two the travelers on on trip advisor.
Specifically around connectivity we.
We have connectivity to the 8-K is threed she'd yeses three hundreds of different internet booking engines that hotels.
I have been using on our site.
It's not easy part of the equation, but through previous efforts.
We have quite a bit of experience, establishing the connectivity that will enable.
Many dare I say most hotel leaders that.
I would be interested in our audience to be able to establish that direct booking or that direct offer capability.
Great really interesting thank you.
Thanks.
Thank you. Our next question comes from Heath, Terry with Goldman Sachs. Your line is now open.
Great. Thank you, Steve just to dig a bit deeper into into the direct opportunity anywhere you know, we're obviously seeing.
Google and sort of other metasearch models attempt to enable.
Loyalty program efforts that hotels or certain.
Certainly pretend to make that even through this pandemic or attempting to build out during the pandemic that we're seeing and the shift in consumer behavior towards more direct booking via the phone is consumers try and get more information about health protocols and check in and that type of thing.
What kind of opportunity do you see for Tripadvisor to play a role there are short term and then certainly to the extent that we're all focused on the longer term to use that.
And the the environment or add to sort of benefit.
Benefit drip of ours, there's more direct relationships with you know with the Steve's hotel speed on sort of around the ecosystem.
Hi, Yes. Thanks Heath interesting question I. So we were pretty quick to market with our travel safe initiative. The clue previous calls I think it was talking about 50000.
Businesses advertising or information about safety now it's up to 120000. So I think our traveler is clearly receive benefit those that are clicking on.
Or those properties with travel safe information or getting a higher percentage of our traffic.
We share that with hotel the time, it's fairly obvious to think about travelers want to know what the hotel is doing to keep them safe and so I think we burn some some bonus points with travelers by presenting the information such a comprehensive way and with hoteliers for making it available to a hotel.
On tours were free to help them.
Addressed the concerns that their customers have.
Hi.
We do quite a bit for hoteliers and restaurant tours.
For free.
Let them sign up they can add photos they respond to reviews all of that is part of just our ongoing relationships with.
Our registered owners when we offer products that.
All the ones that we brought to market. So far there really to help leverage some additional information on trip advisor or get additional bookings direct bookings from our site and which again helps them to grow the subscription offering brings yet another model that is a very.
Demand oriented.
And extremely easy to measure because we are actually providing more bookings based upon the offer and in its kind of a no risk situation for a hotelier.
Wants to test participating in our program.
And.
And they will see the bookings come through whatever connectivity, we've established with them. If we are successful in driving more and that makes it a win for them and or travel obviously gets the benefit of the Peru or both that hotel was off.
Great I appreciate that thank you.
Thanks.
Thank you.
Next question comes from Jed Kelly with Oppenheimer. Your line is now open.
Hey, great. Thanks, Thanks for taking my question. So just looking at your your your traffic patterns. Your Traffic's, obviously ahead of where some of the OTI AIDS Our room night seems good gene.
It seems to be more of a leading indicator as you think about travels coming back.
Is there a way sort of any product you could potentially introduce to kind of control your own destiny in terms of revenue and generate revenue more revenue either through your media platform adds.
More consumers look to book to travel before actually traveling.
Yes, so I'll take a shot at that Steve again I.
So I think you've seen some of the leading indicators the destination marketing organizations. The geographies that want to start attracting tourists are beginning in a bit more heavily into the display space one of our product offerings then.
Then the chains and that's a combination of dollars available, but also they recognize those organizations recognize that people are even in the midst of a pandemic planting and still making some of the decisions for well when all this craziness is over where do we get to go.
The demos want to be there and thats arguably a bit too risky for the hotel chain to play at that level decision process. We have no doubt that as demand picks up because people feel safe to travel.
Again, not not next month, not even next quarter necessarily but as the recovery happens all of the ecosystem will rebound to where we were the chains will be super active.
The destination marketing organizations, because so many destinations tourism is a critical component will be back on the site.
In spades, and OTI A's and our traditional clients will all be.
Oh back in force looking for that demand.
One other thing I wanted to kind of add on that subscription product because we're talking about sort of chains and loyalty programs is that of course, we believe that the loyalty program set the chains offer and that though tees off or will.
Well, obviously continue those tend to be reasonably strong programs or subscription offering is not meant in any way shape or form to pull people away from those its a.
That's very we view it as very complementary.
To those systems and so nothing that we're doing product wise would make it any less interesting for hotel chains for instance to be terrific advertising partners for us.
And I would underline.
The point that you're making a joke about leading indicator of traffic. We had in September we had we were at 74% over the previous year in terms of unit users, which is obviously way ahead of that.
The 35% we were on revenue compared to last year and so we look at those trends we were even in the depths of Oh April may we had about a third of our Oh, our traffic. So on our side. So we were seeing engagement.
Peter engagement with the trip advisor platform.
Even when conversion rates are low that's that's very positive for us the other sort of leading indicator I would point out is if we get into a situation next year, where there is more certainty on the ending of Colby because there is a vaccine and its not just about the logistics of rolling it out.
We may see part per hotel auction, which is mostly pay per click of course that we may see as a leading indicator there because people will start to engage and started.
Started booking for further out.
Another area, where we might need to be there is the recovery.
Thank you.
Thank you Ashley reminder, to ask a question you'll need to press star one on your telephone. Our next question comes from Doug and matched with JP Morgan. Your line is now open.
Okay. Good morning Pacific They offered hook, thanks for taking the questions I had.
Two.
The throughout the hospitality product, but you have a role now could you elaborate a little bit on that and give us.
For more details on what you're doing there and then looking more broadly across that need to be opportunity.
Are there any other unique opportunities or interesting things that are popping up no.
Come down the pipeline.
And then.
King after he took dot com partnership has spent a lot of years issue among that partnership.
Updates to share her on how the partnership has progressed so far.
That's certainly so I can start thank you day by two B to B products recently released and then.
Subscription component, we can talk about if you want I.
In no particular order, there's a reputation pro which enables hotelier I mean stepping up level of hotels reputation on trip advisor is I'd say, many many properties around the growth globe critical to their success its a ton of absolutely free visibility.
The client to us or not is visibility for them its reputation as I read about it on trip advisor, they're very proud of their rewards and so hotels naturally do what they can all many many hotels try very hard to improve that reputation on trip advisor because.
As everyone knows you cant kind of buy your way.
Short order.
Right. So one of the best way that we recommend hotels to improve the reputation on trip advisor is to actually deliver a better customer experience no surprise and then to get their travelers their guests to write about their experience on trip advisor and we've just seen a stunningly consistent correlation.
And between the more guests that right about the hotel the better at it.
Overall average score that would be so good reputation pro helps automate that process So hotel leaders.
We are able to essentially set it and forget it so that the review request goes out to all the guests.
It.
I can also add some extra questions. The hotel you would get some extra insights into what guests are saying, but most importantly.
The review volume goes up the reviews tend to be positive, which helps their ranking on tripadvisor again.
They can and many hotels do it independently they emailed to guess asked and you're right. The views on trip advisor, we love that but for those that want to have it a bit more automated be able to check the reviews on trip advisor.
In Facebook and Google and one spot, it's a very nice relatively simple offering.
The second product is a.
Spotlight business insights product it looks round at this is in partnership with another company.
And it.
Using trip advisor data and the other technology really helps deliver insights into how to run your hotel business.
What's price rooms that.
Relatively establish category, but penetration is not what one might expect because.
It's.
It's expensive to have a trusted sales force that one's globally, well, we have that so in partnership.
With some extra bells and whistles, we've put together a product and we're bringing to market now.
We think those are two very.
Valuable products to hotel is there also sticky products, there, helping them run their business and build their reputation over the long term. So we look to form relationships.
That with hotel leaders that are really helping them in a permanent sense to the degree that some hoteliers will also be very interested in our offering something special in our subscription business. That's another more on the demand side, but hoteliers care about filling the rooms and so.
That will be not yet, but will be another opportunity to engage with hoteliers and help them grow their business.
And I would add to that just as a reminder, our strategy to grow revenue outside of our hotel auction is not limited only to experiences and dining.
Last year, our non auction hotel products to be to be products, we're growing double digit year.
Year over year, and so we have a lot of plans to keep growing that hotel b to b part and these two new products that we've introduced are important.
Important tenants about so big focus internally here to keep growing our hotel b to B business.
As well as our media business as well as our experiences in dining and now these added consumer new consumer streams as well.
To your second question the.
Oh, sorry, Stephen you can add the two key partnership yes, indeed, almost a year since we keep that joint venture very positive about what we're doing together.
In China as she was talking earlier about the benefits of having Jane on our board, but in China itself, we're working on.
The team is working on the joint venture we're excited about what we can do together in that marketplace. Obviously cogut has impacted the plans at least the revenue for that business as well, although the Chinese market domestic market has recovered quite nicely actually the.
The focus the main focus for the joint venture is China outbound traffic international traffic that part of the market hasn't recovered.
Very well so in terms of revenue not on track, where we hope to be because of cold it but in terms of the team building the product that we need for the future very happy with progress.
Great.
For the color.
Thank you and no other questions at this time I will now turn the call back over to Steve coffee.
Thank you everyone for joining the call.
I just want to reiterate my thanks to all Tripadvisor employees dedication is an inspiration.
We are truly lifting one of our company values being better together.
To our investors we are confident in the signals of pent up consumer demand. We believe our continued disciplined balance and cost savings and targeted investment in our future will enable us to emerge leaner and stronger than before.
We'll get through this.
Time, and time again travel has rebounded and travelers have come back to trip advisor, we will continue executing our strategy and this would trip advisor please influential role with consumers and partners worldwide in this recovery and beyond so thanks and stay safe everyone.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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