Q1 2021 Tripadvisor Inc Earnings Call
Good morning, and we watch and to Tripadvisor as first quarter 2000, and treating one earnings conference call and.
As a reminder, today's conference call is being recorded at this time and I would like to turn the conference over to Tripadvisor, Vice President of Investor Relations. Mr will Lyons. Please go ahead.
Thanks, Larry Good morning, everyone and welcome to our call. Joining me today are Tripadvisor CEO, Steve Kaufer, and our CFO Ernst.
And last night after market close we distributed and filed our first quarter 2021 earnings release and made available our shareholder letter on our Investor Relations Web site in the release you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call.
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.
I also note that comments, we didnt make regarding cost savings levels referenced on this call do not consider depreciation and amortization restructuring and other related organization costs were stock based compensation.
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 seven 2021, Tripadvisor 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 SEC for information concerning factors that could cause actual.
And to differ materially from these forward looking statements.
And with that I'll turn the call over to Steve.
Thank you will and good morning, everyone. Thanks for joining us today.
And it's covered in our shareholder letter last night I'm pleased to say that consumer demand and revenue performance as a percentage of 2019 levels improved sequentially on our platform and both February and March. This was led by the U S market, where vaccination trends accelerated during the period.
Traffic to our U S hotel pages approached 80% of our 2019 levels in March.
She will be key offerings that lagged last year.
Our hotel meta search auction and experiences are showing nice improvements. So far this year again due to increased U S activity.
Europe lagged due to lockdowns, but demand picked up in April and we're optimistic for a broad and international recovery is vaccination rates improve.
As of Q1 trends and the U S and some other countries contrasts greatly with challenges and many other parts of the world like in India.
And then just wanted to say that our thoughts are with all of our colleagues and India as well as their families and of course, everyone who is struggling so hard with this terrible situation.
These contrasting trends that we're seeing support our overall view that the road to recovery is in fact on EBIT.
So travel is certainly not out of the woods will.
But we have a positive start to the year, we remain quite optimistic about the second half 2021 as the number of people vaccine and increases countries reopen and the leisure traveler will come we brought people want to travel and we are certain that when they feel safe to do so they will travel.
Will the Tripadvisor story is more than just the recovery.
And has and will continue to position the business for future growth by leveraging our platform and splits and our competitive strengths and executing on our strategic initiatives prepay.
Pre pandemic, we grew many offerings by double digits, including there will be the deep business display advertising experiences and dining.
<unk> been actively improving these products as well as our tech and I will go to market strategies in order to deliver customers the best experience possible and drive diverse growth.
And to that the innovation that we're bringing to travel in terms of our new subscription products with the bus plus.
As many of you know from our last quarterly remarks, you see a huge opportunity ahead and.
Fully expect the pluses can be a very exciting part of our future.
You remain in beta and the U S. Today, but we're pleased with our progress as we work to improve the product for consumers and work closely with partners to build delfi offering.
Converting even a small percentage of engage tripadvisor traffic not to mention the hundreds of millions of visitors per month that are searching on tripadvisor for hotels and experiences and place a potential long term growth opportunity of tens of millions of subscribers and a multibillion dollar recurring revenue stream.
I will note that absolutely none of this is possible without the team and I want to thank everyone and truthful answer for their ongoing commitment to helping millions of consumers and partners get back to travel.
Grown accustomed to executing through tremendous unpredictability and I've been very proud of to continued resilience and.
We remain very optimistic about what's ahead.
And with that Ernst let me turn it over to you for some additional thoughts.
Thank you, Steve and good morning, everyone. I first just want to echo some of Steve's comments uneven trends and uncertainty persists, but improvements have been encouraging.
And I remain pleased and impressed with our team's continued operational focus and how they rallied together to strengthen and tripadvisor not for only a strong recovery, but for the long run.
Q1 demand and revenue trends, indeed reflected our commentary back in February with varied stories by geography by offering progress and the U S. Almost singlehandedly drove sequential revenue improvements and our business in February March and in April.
On the other hand, persistent lockdowns across Europe and challenges throughout the international markets as well as the absence of international travel remains significant drags on our results.
The good news is that there's a lot of room for continued and continued improvement in the periods to come and the U S, but especially in Europe and beyond as the number of people vaccinated increases countries reopen and the leisure travel recovery broadens.
I want to quickly highlight three financial themes that remain within our control.
<unk> significant cost savings and ensuring a solid liquidity position and laying the groundwork for compelling and profitable growth to wind up and depth pandemic subsides.
Firstly regarding cost, we continue operating effectively and efficiently as a leaner company.
Operating expenses in Q1 were 32% lower year on year.
We expect the majority of the fixed cost savings that we generated in 2020 to persist positioning us for operating leverage as the travel environment normalizes.
On the liquidity front in Q1, we completed and opportunistic convertible debt capital raise which further fortifies our balance sheet.
And with $674 million of cash on our balance sheet at the end of the last quarter, plus an undrawn credit facility for which covenant flexibility was achieved last year as well as enhanced operating leverage as revenues comes back. We believe we are and a strong liquidity position.
And finally throughout the pandemic, we have been focused on driving improvements across our platform. We expect that these efforts will pay dividends as faster growth and more efficiency across our various revenue lines as the market recovers.
So in summary, much uncertainty remains but green shoots have definitely started to emerge we.
We remain optimistic that leisure travel will come Roaring back as early as the second half of the year and are pleased with the ongoing work that will enhance our positioning well into the future.
With that we will now open the call for questions.
Thank you and ladies and gentlemen, if you have a question at this time simply press Star then the number one on your Touchtone telephone and thank you.
And you ask a question. Please press star then get them relying on those accident.
And telephone one moment please for our first question.
And our first question comes from the line of Lloyd Walmsley update Deutsche Bank. Your line is open.
Alright, Thanks, two questions. If I can first just in the shareholder letter you mentioned kind of credit card.
Ships with Tripadvisor plus can you just help us understand conceptually how something like that might work is that your credit card company paying some.
We'll freight have free like how would that work in terms of paying for plus benefits for their members would it be their cardholders would have to activate or were they just pay kind of and blanket how did those deals work and what kind of like boundaries come with those if you guys can sign up.
Credit cards.
And for them, if you can flesh that out a little bit and then the second one just on the U S. Auctions. It seems like it's clearly coming back at 80 per cent of April levels are 80% and 19 levels in April.
That's a little bit behind at least some of the otas commentary on on U S. Booking levels. So wondering if you can help us kind of bridge the timing differences and yeah and then.
How do you guys think about that.
Category of meta catching up.
Relative to I guess, OTA bookings and revenue thanks.
Sure. Thanks Lloyd this is Steve maybe I'll take the first question Ernst will take the second.
There's a couple of different ways that we're looking to work with credit card companies.
The first could be on the part of the more.
Higher and credit card that carried some interesting travel benefits already or may be it.
Particular financial institution wants to break into.
That pretty lucrative category of travel and so the travel reward and one of the travel rewards with the credit card would be a subscription to tripadvisor plus that type of model would generally have.
The credit card with a financial institution paying tripadvisor on behalf of the customer a perhaps a somewhat discounted off of list price right, but.
But that every credit card company would.
I mean every credit card customer.
And I would automatically become a true supply surplus subscription that's a great deal for Tripadvisor, it's a way to enhance their credit card and a.
Very meaningful and differentiated way from a financial institution, but obviously those deals.
Take a little while to put together and have to buy.
On the right partner and we're still in beta as a product.
Another option.
And certainly being explored with.
Other financial institutions, just simply include a discount perhaps or a free trial, so a way to get started with true.
Tripadvisor, plus subscription, reaching and interesting audience.
<unk> and <unk>.
Again, it's something that the consumer would likely to be themselves.
Auto renew on we get someone to actually try the product and we are completely convinced that once someone sees what tripadvisor plus offers by way of.
Discounts on all of the hotels and all the experiences and additional value propositions that we're bundling with the product we think.
Renewal will come rather simply.
Ernst.
Yes, Hello, Lloyd with regards to the auction and particularly the U S auction seems significant improvement throughout the start of the year.
We said and our shareholder letter and.
In March we reached in the U S about 67% of 2019 and April that was nearly 80% and right now we're above 90% and.
And the U S compared to 2019, so rapidly increasing performance a lot of domestic.
U S travel.
On that.
That is helping us here and we're pretty excited about that the auction and seems to be performing very nicely cpc's.
Our recently roughly at 2019 levels.
Auction is very healthy indeed and of the Otas, obviously are actively participating in that so very pleased with how that's going and.
Good sign for what May happen with our European business, which is now.
Very suppressed in the second half of the year.
Alright, guys. Thank you.
And our next question comes from the line of Jason Bazinet of Citi. Your line is open.
I just had a quick question on plus.
As you've had discussions or sort of your hotel partners are there any sort of broad parameters of things theyre excited about or concerned about it and make sure you contemplate putting some of their inventory into the program.
Sure Jason.
Thanks, so much.
We certainly had a quite a few discussions with hotel chains independent hotels, and we feel we're making good progress.
It will look let me just kind of back up and just remind everyone that we're super early days about bringing this whole new subscription model to travel and.
And hotel discounts are obviously, a core part of that consumer value proposition.
And in doing so we are actively engaging with chains and independent hoteliers and listening closely for what they like areas that they can and that we can improve upon and ultimately how we get to everyone who joined the program.
Absolutely dedicated to making a win for hoteliers just as much as its a win from the travelers.
And so.
And what we've learned over the past couple of months is that a number of chains and independent hoteliers really like what we're doing it perfectly comfortable how we are displaying the plus so we're merchandising how were.
And we require a traveler to buy a plus subscription in order to book a discounted rate and that's what we call a hard gate and and frankly, that's what makes plus so different from the legacy hotel discount sites.
If you go ahead, sorry go ahead.
So I was just going to ask you. If you had to sort of rank order. The risks of this not achieving your expectations what would sort of be at the top of the list and what's at the bottom.
Sounds like the value proposition to the consumers easy right. So that one doesn't seem to be a constraint what would be towards the top of your list of the things that you're hearing.
More nervous about.
Yes, so great question and I do think a lot about it because I love trying to kind of punch holes in and our thesis going forward and like we have the traffic on the site and shouted at about the 160 million shots on goal or people that are clicking on.
Our embedded links and 2019 weighted opportunity, we're signing up independent hoteliers and they're comfortable with the product we've had some pushback from some chains, but.
But they really don't speak with just one voice so.
Number are coming forward, saying.
And it's exciting and are in negotiations with the U C. This is a great channel for Tripadvisor for for themselves and they wanted to make sure their properties.
Essentially get their fair share of bookings from from this product.
And other changed a little bit more nervous.
And how we're showing the right and we've taken that as great sort of constructive feedback and we're addressing it and so we're in conversations with other ones.
Every single chain about what it will take to make them feel very comfortable about joining the program.
You asked me about.
Concerns and then just kind of want to make the point that.
And we don't need universal coverage for this on it because we have and travelers going to say, Ken kun and they want to see some amazing deals and we want to present dozens of deals, but we don't need to display hundreds of deals and how do you think all the way back to instant book It was kind of different.
And then but here, we're able to promote the deals that we're getting from chains and independents wherever we get them.
And the kind of the better the deal the more we're interested and promoting it to the traveler and we've seen over the past several months travel receiving liberally.
More than that.
Our best savings is more than a thousand dollars every single day since we launched the product and like pretty compelling numbers, there and so when we talk about.
The demand we already have on the site I believe and.
And partnerships, which I am happy to go into more.
On the supply side, we have independents, joining we have.
Good progress on negotiations with the chains and some of the chain and we want to make sure that we have.
Participation from as many as we can because some of those chains have the absolute best properties.
Absolute best properties around and so we want every property to be able to join the program, but the point I was trying to make is we don't need every property. We just need a few dozen and all the geographies that people are traveling to.
So it may take a little longer than others, where some of the change.
And to hop on board to see the benefit, but we want to make sure all of their properties again get get the share of bookings that.
That plus will be driving.
Great color. Thank you.
And our next question comes from the line of Richard Clarke of Bernstein. Your line is open.
Hi, there thanks for taking my questions a couple of on a you provided some very helpful color. There on where we are in terms of U S.
And right into the auction product.
And experience it will you be possible to get kind of the similar commentary for the rest of world and aggregate or broken it down and we see any progress as we kind of exited the quarter outside the U S and.
And then maybe just a quick follow up on the <unk> product I think we've seen a few comments on the supply has come down a little bit over the last month and everything does not change and memorial day and that was a couple of months ago and it's not just a natural.
Results of the shift from wholesale supply to direct partnership supply.
And we're all you and not that prices are shifting true that that direct partnerships and client.
Yes. Thank you Richard I'll, let's start with the commentary about outside the U S. Much more muted.
More like Q4.
Throughout Q1.
More green shoots more recently, starting in Q2 and April and in May.
But more depressed and the U S. Because of the lack of the rollout of the vaccine and Europe and the Lockdowns, many lockdowns, but by countries, but is this starting to change we see that the U K is.
Very much ahead with the vaccines and travel incentives increasing there we see a thawing in our restaurant business and reminder of last year as soon as the restaurants opened and Europe performed business bounce bounce back to 2019 levels very quickly and last Q3, we're starting to see restaurants open.
There is a timetable for restaurants to open in Europe, now, which is and the next few weeks and most countries at least partially opened Spain, partially open.
And in those markets Berbera, partially UK has just opened and those markets where were partially opened we immediately see revenues jumped back so recent green shoots across Europe and.
But we anticipate that Europe is although behind the U S is going to catch up with the U S and in the back half of the year.
Thanks, Richard for the plus question as well.
Hi.
I will give a short answer by saying simply we're in discussions with.
And number of different Aggregators.
And once we brought on originally that helped us deliver such a comprehensive and amount of supply and right out the gate.
And as well as independents and chains, who are direct supply effort.
That's caused some variation as you noted on the site I'd say, it's less seasonally related.
And more and aspect of how we're going to market with our direct connectivity where ex supply and.
And how we're working with a different set of Aggregators.
I'd say expect more change going forward.
We will test and learn company and this is a brand new product. We're innovating about the best ways that we can display inventory display great discounts for travelers while at the same time respecting the wishes of.
Group of hotels, who want to make sure their inventory their prices are displayed and the way that they are comfortable with so as you continue to look at the site you will see some more tests coming.
Is it some more changes coming and the next weeks and months and.
And Thats part of the reason why we're still in beta as we as.
As we hone in on what makes for a great consumer experience.
And with a nice breadth of inventory coverage.
Wonderful thanks for the color.
Thanks.
And our next question comes from the line of Debbie kind of curious Securities. Your line is open.
Alright, Thanks, a lot.
Maybe first on trip plus maybe can you give us a sense of the scope and debate on how.
How much traffic.
And that's supposed to it and.
Has the beta so far caused you to recalibrate your expectations up or down any color on that and the great and then.
On the on the plus profits and I think last time, you disclosed more than 100000 properties.
And.
Do you have an updated number you can share and has that number grow on versus a rent and Ross previously.
Sure Thanks to meet.
So we have been since we rolled out in beta.
Earlier in the year, which was on to their small percentage of our traffic we rolled it up to north of 75% in the U S and terms of chances of seeing Tripadvisor.
Because we want to get as kind of as much experimental data as we can for how consumers are interacting.
On any sort of given day, you might have four or five different plus related tests running as we again kony and on kind of what makes the best.
Tyler merchandising, how the checkout flow works, how we're sorting different properties to the task before list lots of different things that.
And are all part of the equation.
And I would I've been.
Hey, calibrating up or down and getting more bullish on the opportunity because they see the types of savings that consumers are are achieving and and they are pretty compelling our average savings north of $300 and theirs.
Several times every day when someone's saving.
And our sales and $1.
And that's a meaningful number for changing the type of the trip that that traveler can have and as word spreads that hey, all of this is available with this new tripadvisor plus subscription product I look three to five years out and I will say of course somebody and darn it that's going to be us is.
Moving to have a travel subscription product with tens of millions of subscribers because such a launch it will fit into the ecosystem subscriptions clearly prove and so many different categories now and.
And we price this we feel appropriately so that.
So that a lot of people can afford to subscribe I mean, do the math and $100 a year.
Less than $9 a month, what a great deal to be able to get the type of discounts on hotels and 10% off all of the Bookable experiences on Tripadvisor you will soon see some of the other things that we're adding and into the package.
It's just a.
Great and Ocean and frankly, great business model for us So I'm on.
Im getting more bullish on the opportunity as I've seen more of the customer reaction and.
And frankly I'm getting.
And <unk>.
Careful myself to temper my enthusiasm about what this looks like and five years with how quickly we can get there because I'm constantly reminded there isn't another travel subscription product out there people arent comparing this with something else. It's a new concept that we're introducing to people and I have to be.
Little bit patient about.
The time, it takes to educate folks and time.
It takes even though we have these no brainer moment the time it.
It takes to for us to help persuade them that it's a it's a very clear savings.
And so.
And <unk>.
I am reminded by my team I remind everyone that this is really early days.
Great new product category.
And.
And success is measured in years not months.
And that's the way we're approaching it because it's again.
I will try and be more says Saint Pierre I believe even more in the category love. It it will take us from time to get there.
Inpatient by personality, but I understand these things that will take some time and.
And and Super excited.
To your property count question.
Question and.
And I want to hang too much on specific property counts because what we found is it's really the combination of the discount level, we're getting and how that compares to other partners of the prices that we're showing that bribes.
A lot of the other.
On the bookings so surprisingly.
Very small discount.
If we have a lot of properties with a very small discount it doesn't move the needle for us, but when we're getting the 10 and 15 30, and 40% discounts does become bestsellers pretty quickly and we're really helping those hotels.
Fill that empty room and that's.
And why that's why the whole model is so powerful.
Great. Thanks.
Thanks will thanks for the color on maybe a quick question on maybe on the wire Tyler distribution deal.
Yes.
And then when should when can we start to see any of the P&L impact on.
And the economies are still reopening, but maybe talk about.
Back maybe.
How the economics might be structured and.
And their potential to do more distribution deals such as this.
Sure. So I will try to answer that.
And.
And then I'll, let Ernst comment.
Part of bio towards business model is as a player for all the different <unk>.
Once a sale and so whether that be a booking dot com and expedia other otas.
Including kind of the traditional offline travel agencies. So.
They're very good and we are.
He could distributing that that type of <unk>.
And Tory and again, it's early days and the recovery of all experiences thrilled with the partnership with <unk>.
And dot com great.
Great Company to work with obviously you worked with them for a long time. They are excited on the experienced aside they have some of their.
On plans and we're able to complement.
Globally for them and Thats from our perspective quite exciting.
Ernst do you want to and anything that I will.
It's the fact that we are able to do distribution deals like this is a reflection of the power of the of the supply aggregation that we've put in place with Baidu are second to none.
Across the world.
And we have very attractive connections with very attractive.
Hi.
Clearances.
And that makes a.
Our partnership with <unk>.
With players like booking and attractive proposition for both sides will.
Allow them to scale their experiences business faster and will allow us to create even more scale.
Our supply aggregation.
Great. Thank you.
And our next question comes from the line of the talk with you about and Alcoa Research. Your line is open.
Hey, guys. Thanks for taking the question a couple ones. So first can you talk about the auction participation. At this time are you seeing more participants come in either hotels on more otas beyond your large partners just trying to get a sense of how various plans and reacting during the rebound and what the marketplace could potentially look like post.
Recovery and then second one on plus and now it's a small data point and given it's in beta right now, but as you assess the rois and based on early data on how are you thinking about currently and the potential cannibalization of metal revenues.
Because of this product thank you.
I'll start with the first one deepak on the auction, yes, we're pleased with the increased participation.
The auction and especially in the U S is coming back to life.
I was describing the cpc's recently have been sort of close to 2019 levels, which is an indication of sort of the help that you see emerging.
And I said that our revenue per recently has been above 90% and the U S versus 2019, and so the auction is is regaining share.
<unk> and.
We're very pleased with that.
And all.
Jumping on the plus question so why.
We certainly keep a very close eye on cannibalization and when we put a plus offer at the top of the fourth quarter.
While <unk> still can click on meta link from that plus offer and many people do we're obviously trying and succeeding and driving a bunch of traffic into the plus flow.
Too hard to say with the complete ROI is going to be because we really don't have.
Data on on renewal rates, but if we make reasonable assumptions and we clean up a few of the loose ends on.
The conversion path to make them more effective and I'm quite confident that will get to a.
Positive.
Clearly positive draw on.
On the dilution for the auction in place so.
The subscription revenue.
The other thing that clearly helps the causes that folks who become subscribers surplus come back more frequently and.
Whether the coming back to book and other plus hotel or a hotel that's not plus but in fact is a regular auction that click they believe and they are much more loyal to tripadvisor and.
So we will also looking at that repeat behavior and seeing how that boosts our domain direct traffic, which in turn boosts our.
Overall auction revenue outside of plus.
As you pointed out very early days pretty hard for us to measure right now.
Those kind of medium to long term benefits, but what we're seeing so far it looks positive.
Got it okay. Thanks, guys.
Our next question comes from the line of Shred Upcountry area of Evercore ISI. Your line is open.
And she met our criteria your line is open.
Oh, I'm, sorry, I wasn't needed can you hear me.
Yes.
Okay, sorry about that so could you please remind us how the pricing will work with <unk> plus.
And I know there was a question.
Wholesale pricing just thinking about price.
And how are you thinking about that.
And for 100 dollar might use to pass up.
John.
Subscriber and.
And you get a subscription fee, but and the subscriber sees 85 or something like that and would it be different in terms of how much your battle and whether its a chain.
And then hotelier and just could you please remind us how you're thinking about that and on the second is what what would what are you looking for in terms of supply on the platform in terms of engagement that will.
On a full launch.
So what are some of the metrics what do you think will.
We will let you non.
The product fully let and electric globally. Thanks.
Great. Thanks with excellent excellent two part question there.
So the basic model, we're working with and that perhaps there are some exceptions is that we're encouraging hotels of all types to identify a discount that we are able to pass along to the travel and we're in fact, passing along the entire discount will they are able to offer to be kind of the most.
Beneficial to the consumer to get them to get that consumer to book the properties. So with an independent hotel ABC says look really interested demand for these from these dates will give will offer 25% discount that 25% discount flow straight through to the consumer that mean.
And when someone is looking for a couple of nights day at a 25% off the decent average daily rate.
<unk> might now be a 300 dollar savings for that trip and.
And the consumer sees Wow, that's a great savings loved this hotel highly ranked in the location and I want.
And consumers saved 300, recharged and 99 net savings of $200 and and so win win win all around.
I have different hotel may only choose to offer 10% off which is something we would still offer but it's not as compelling.
To the traveler.
For an existing plus subscribers hey, that's still nice from a brand new plus subscriber for a one night stay that's probably not or perhaps isn't going to trigger a subscription purchase.
But that same hotel, 10% off for certain nights day, probably does add up to quite a bit of savings. So we leave that up to the hotel and there's a minimum discount when we sign up the hotels.
<unk>.
But that is something that they can kind of toggle up and down depending on.
And there <unk>.
And needs at a particular points and Todd.
And then.
I mean, I hope that kind of answered the how we kind of deal with discounts of course down the road, we could always.
Choose to not pass along the full discount to the consumer.
But thats.
That's not our plans at the moment. It is is we want this to kind of catch fire with consumers as quickly as possible maximize the discount is one way to do that and we're still making our money on the subscription and growing net recurring revenue stream.
In terms of the plus supply slash launch criteria.
Supply is one aspect of it we're looking to kind of hone the consumer experience.
Kind of makes the conversion flow.
<unk>.
And as straightforward as possible and make sure the.
All the ticks and ties the nuts and bolts on.
Building, this and making sure it's working on all of our devices.
Is kind of is up to snuff.
We don't have and.
And we don't feel its necessary a hard and fast being must have X number of properties at a wide discount level, but we do look around at obviously are our major geographies, we look and say.
Are we offering set of hotels that are compelling and.
In terms of discount and compelling properties themselves and we know we will never get it right.
We're not waiting to have every city.
Great before we launch.
But again.
Net.
The product is available too.
Most of the majority of our traffic right now we simply haven't launched it to our members and started up our PR machine and.
And the rest of the way as one goes about launching a product, but as I say.
That will come soon.
And we will.
And just putting the finishing touches on this how I would phrase it.
Okay very helpful. Thanks, Steve.
Thanks.
And our next question comes from the line of Tom White of D. A Davidson your line is open.
Great. Thanks for taking my questions.
Firstly.
I was hoping you could give us an update on your progress around leveraging the massive amount of customer data that you guys have and making it more actionable.
Any way you can kind of quantify the potential benefit to the business, maybe you hope to see from that be it you know.
More repeat rates higher conversion and also where does this rank kind of on your priorities, maybe it's kind of fallen down the pecking order just given the focus on plus and.
And making sure you optimize around the recovery and then just a quick follow up on plus Steve you remarked, how you know no. Other online travel platform says kind of launched a subscription offering for consumers.
Just curious on that I mean is that just because you because maybe the otas from day, one has sort of been set up to kind of after optimize around transactions and kind of e-commerce conversion or.
Do you think there are other reasons why no one else has done something like this.
Sure.
Couple of part question, there, so I'll try and be the first ones first data to make it more actionable.
And we're certainly.
I haven't talked about it a lot, but we have been continuously doing that in our <unk>.
CPM or display ad.
Business, helping to target.
We are.
And the and segmentation that only just by geography, but but lots of different aspects and that's what enables us to command a.
Our premium CPM and and most of our display business. So we are doing that and have been making progress.
When it comes to Tripadvisor plus certainly our go to market plans do involve looking at a lot of our.
Internal historical data the travelers, who we think would be great plus customers.
How we approach them.
And offer something different than how we're mass marketing to all of our visitor audience. So I'd say the data and analytics support us.
And in service to that to that plus subscription priority as we launch and when I look at a bunch of the activity that's going on.
We aren't doing a lot as you haven't seen on the site in terms of pure recommendation type.
Capabilities.
And we're adding a bunch and you will see some of the visit and experience going forward.
But again, it's a matter of priorities, we have a bit more focus on plus than that and hotel auction in that regard at the moment, but.
Suffice to say, we do have teams working on bringing that data to life just hasnt given it a lot of their time historically.
The second part of the question.
Yes.
Plus we expect to be the first kind of mass market travel subscription products and we're investing a ton behind it and it really is a very different model than the traditional store and so otas like and expedia or booking are tremendous companies have.
Super brand awareness, a great product offering for travelers.
Wonderfully global.
They built their business around a.
<unk> orientation, which to be clear is a great business.
We've been in the lead generation business for hotels that transaction business, just like the other otas for experiences and that we're introducing this new direct to consumer subscription model. So.
Not that other folks can't it's that it's a new way to think of something and travel and because of trip and the challenge with somebody else doing it.
Startup or new companies that they may not have the traffic to expose to the subscription expose the subscription product do.
Hi.
But that's not Tripadvisor is challenged we already have so much of the traffic so.
The opportunity to sell a subscription product for and occasional use unlike the netflix or an Amazon prime and youre not watching a movie or buying something.
Every week or every month travels more episodic.
But the value that we're presenting and this form of subscription is.
Oftentimes much higher and can offer that instant savings because we have the traffic is why we think it will be successful where others might be challenged.
Great. Thanks for the color.
And our next question comes from the line of James Lee of Mizuho Securities Your.
Your line is open and great.
Great. Thanks for taking my questions a couple of questions on plus here.
Maybe can you guys talk about the checkout process here.
And tires sign up and booking flow on your website on.
Do you need to actually click on a website here and.
And just curious the way she will cancellation policy from membership and lastly, I think Steve will talk about the deals in general Thats, great saving about 30% to 40% and just curious at this hotel deals you're able to negotiate a day exclusive to tripadvisor.
Great. Thanks, Jim saw excellent questions.
Going forth.
The checkout flow is all on Tripadvisor and we're not sending you to any other website.
We are the entity, that's making the reservation for you if theres anything wrong or you want to change your calling us and <unk>.
We're hoping through the process whether that be.
For the attraction that you booked with the discount or the hotel that you booked with a discount.
And that's a very deliberate choice.
We're also in terms of.
Hoping to get that second booking for the same trip or the very next trip.
The operating on very hotel friendly policy in terms of when someone books the hotel on Tripadvisor with sharing the full name inflammation everything directly with the hotelier is part of the reservation and were encouraging and hotelier to to try to up sell that client with spa treatment.
Whatever room service whatever else that they may might will be able to do or have them join the hotels loyalty program everything like that so.
That's all good and in fact encourage from us canceled.
Cancellation policy for true plus.
Super consumer friendly now.
Essentially.
If you look around and Youre not going to use the subscription we will let you cancel I think it's currently 30 days, but will probably.
Extend that.
And then you can envision kind of going forward.
Hi.
It's not a monthly subscription its annual subscription so.
If you for whatever reason hasn't been able to use the product. We don't feel you should be paying for it but if you have to use the product.
And then Neil.
It's not refundable you have it for the whole rest of the year and.
And frankly, if you're using it once a year youre, probably making your money and fusing it twice a year.
It's clearly a great savings.
Third part of the question or the deals exclusive to tripadvisor, they can be and that's really up to the hotel.
We're as we contract with the hotels, we are not.
Demanding that it be exclusive.
Four other channels, but what's going to happen is that if a hotel offers us a 15% discount to be part of plus and they simultaneously give that 15% discount to and OTI. A then it will never be merchant.
On Tripadvisor is a plus deal because its not cheaper than what's showing up and our meta auction and.
And.
Or.
The reason again, we are different is because we're requiring our travelers to buy the subscription product before they can book this discounted hotel and Thats, though that's the hard gate Thats. The pay gate that enables hotels to give us a discount that they are not putting out there.
On their own website or through other channels and that's what makes our deals special so.
No.
In the weeds I guess, if the hotel is offering this discount.
Same discount on some other.
Opaque discount site or packaged with an airline flight that would be fine with us, but it's also on a.
A deal Thats also on their own website and Theyre just.
And the work, we're not going to merchandize their property.
Plus property on Tripadvisor, because it's not a compelling value proposition.
And just a follow up question here on a separate topic and.
And does this product you guys Havent talk about and a while will just need to see you guys call a fee product.
And any progress on that front, specifically and you know this is a couple of quarters ago, you talk about fees very importantly, you got to drive lock and users and any update on that too. Thanks.
And I'm, sorry, I want to.
I wanted to make sure I understand the question.
Could you could you re ask it wasn't quite catch it.
Yes, Steve I think couple of quarters ago, you guys introduced a very much and news feed like product very similar to Facebook, where people can put inspirational pictures videos onto you're asking me what I got it yeah.
Certainly more than a couple of quarters ago that that was what threw me a.
A couple of years ago, we had.
And did a social feed to the product a lot of that is still.
Live on the site you can still pose too can still follow.
It was a great way to engage more users it generated a lot more software content and guides for us that was all very helpful.
And and we had been investing in and then you know pandemic and Tripadvisor plus came along and we.
And we realize that this opportunity is kind of far more interesting far more sustainable and kind of didn't have.
Wanted to call it a perceived competitive threats from other social networks and we were not at all trying to be a social network.
But the short answer's, yes, that's still live on the site, where we're adding and I think the numbers were adding more than 100000, new members every day, just as part of people joining tripadvisor.
Because it's a great site to join and so we're able to market to those people so sort of growing membership is.
Something that we're already I think quite good at engaging those members in our newer offerings like Tripadvisor, plus and will focus on experiences I think as the fund part of the game right now.
So what.
Hi.
At Etsy.
And of the day, we look at how can we best deliver and amazing vacation amazing travel experience to consumers and we're doing that with the content on tripadvisor the content and they're used to in terms of abuse and photos the new content the guides and the.
And the new ways, we're educating users about destinations and COVID-19 information that we're adding as.
And as well as obviously trip plus the ability to save a ton and have a much better vacation because of.
Your ability to sustain and extra night or take that extra special tour, otherwise see the location and the way that we hadn't been able to before.
Thanks, Steve.
Yes.
And our final question comes from <unk>. Your line is open.
Great. Thanks, you mentioned U S auction coming back to life. Your peers has alluded too much stronger booking trends and the domestic market and amidst that backdrop, just kind of curious how you've seen.
Rico, and the insurance product progress, which was a direct to consumer offering that you've rolled out and then a second part different product D to B I think it was reputation pro and spotlight curious how those are progressing as well as demand is improving.
Thanks.
Excellent questions there so.
Reco really fund product.
And definitely aimed at the bigger usually more international trip, that's where you get to connect with a travel agent Thats really an expert or design or we call them really an expert in.
In the field that you're interested the type of trip that youre, taking and people have not been taking those types of big trips over the past couple of quarters.
We launched the product right as the pandemic was.
With sorting and we did not.
And we chose not to put the product on ice and wait we chose to continue to iterate and improve even though we didn't have a lot of usage and so now as travel comes back as Europe says there open up to U S. Travelers. This summer we will.
Look forward to being able to really give the product a great test run out there with tons of users connecting and and looking at and hopefully the NPS scores that we're seeing continue to shine.
And.
And with that let that product sort of gains from organic traction.
Hi.
For the second part of your question on the PCB side spotlight reputation pro.
Excellent products again launched revamped in the middle of the pandemic when it's both tough to reach hoteliers as will its tough to sell something new to them. So I think the <unk>.
121, certainly the back half here will be a great time to growth.
To be looking and saying how are they doing we're able and hotels are clearly opening up.
And if demand is growing here in the U S. We're getting some stronger upticks of interest now at least in the U S.
But it is a worldwide product set.
And so it will be a great question for us to update you on and in another quarter or two it's been slow over the pandemic time, but we're not discouraged because we actually think these products are we know these products. So it will be quite valuable to the hotels that we're selling.
And Vince as we are sort of filling out the tour of all the different revenue lines and I also want to highlight experiences, which we haven't talked about and we talked a bit about the biotech deal.
But experienced this as really a highlight in this past quarter and right now.
Spirit is very much lagging and 2020 during that during the joint 'twenty, but really coming to life and the U S.
This quarter, we said and our prepared remarks that.
U S point of sales booking levels reached 50% of 2019 in March that was substantially up from earlier in the quarter and from before and has moved further up.
In April and now into May.
And the U S. As a destination has been very powerful for our for us.
And and a good driver of the of the business so experiences coming back to life and.
We are looking with enthusiasm to jazz and what we can do for the rest of the year there.
Thanks for all the detail.
Thank you.
And there are no other questions at this time I will now turn the call. It will go back to the conference.
Super Thank you everyone for joining the call.
Time, and time again travel has rebounded and travelers have come back to Tripadvisor will continue executing our strategy and ensure tripadvisor plays and influential role and travels recovery.
Again, I want to thank all of our employees globally as well as all of our Tripadvisor customers worldwide and also.
I want to thank our shareholders for their shared belief that tripadvisor can play a key role and she can travel in the years ahead.
Please get your vaccines and stay safe and I look forward to updating everyone on our progress next quarter.
And this concludes today's Tripadvisor first quarter 2000 and earnings Conference you May one day.
Disconnect.
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John.
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