Q4 2021 Expedia Group Inc Earnings Call

Speaker 1: There were border shutdowns. There were planes out of service because pilots and crew were sick.

Orders up downs, there were planes out of service because pilots and crew were sick things of that nature, but there was far less consumer beer over traveling.

Speaker 1: things of that nature, but there was far less consumer fear over traveling. And really, it was an issue of the inconvenience of the health issues. What we believe will come from this, presuming the next waves continue in ever lightning way, is that the world has essentially gotten accustomed to the pandemic. It will enter perhaps an endemic stage and

And really it was an issue of the inconvenience of the health issues.

What we believe will come from this presuming the next waves continue in <unk>.

However, lightening way is that the world is essentially gotten accustomed to the pandemic it will enter perhaps an endemic stage and.

Speaker 1: governments and industry, etc., will adapt much more easily as the next waves come. And in turn, this will continue to disrupt travel less and less. And certainly the consumers have remained willing to travel throughout and with the return of staff to the air.

Governments and industry et cetera will adapt much more easily as the next waves come and in turn this will continue to disrupt travel less and less and certainly the consumers have remain willing to travel throughout and.

With the return of <unk>.

Steps to the air and.

And the relief of border issues, we are seeing.

Speaker 1: relief of border issues, we are seeing a solid return to travel. Eric will take us through the numbers and the trends, but it's surprising to say that we are pleased to see.

A solid return to travel Eric will take us through the numbers.

And the trends but.

Suffice it to say that we are pleased to see.

Speaker 1: that bookings have strongly rebounded since anywhere that Omicron has topped out. And certainly we're seeing that broadly across our biggest market.

Net bookings strongly rebounded since anywhere that olive garden has topped out and certainly we're seeing that broadly across our biggest markets I've talked before about mix effects.

Speaker 1: I've talked before about mixed effects and I won't belabor those except to say it continues to be real. You know, certain areas are doing better than others, air is more challenging than other parts, geos, certain geos are more difficult than others. But in general, we feel good that big cities have not recovered as much yet and that is a good guy for us. International travel is still yet to return as strongly, that is another good guy for us. So we feel like directionally the things that are will be coming back as COVID-19.

And I won't belabor, those except to say it continues to be real.

Certain areas are doing better than other areas more challenge than other parts geos certain geos are more difficult than others, but in general we feel good that that big cities have not recovered as much yet and that is a good guide for US International travel is still yet to return as strongly that as another good guy for us. So we feel like Directionally the things that are.

We'll be coming back as open license generally benefit us and we're looking forward to the days of those returns.

Speaker 1: generally benefit us and we're looking forward to the days of those.

Speaker 1: With that said, I'm not really prone to doing retrospectives, but we are starting to focus much more on the future of our business and what we're going to deliver instead of how we manage COVID day to day. And I thought it would be useful perhaps to just reflect on where we've been and where we've taken the company over the last couple of years since we entered COVID. So first of all, the thing you've always...

With that said I'm, not really prone to doing retrospective, but we are starting to focus much more on the future of our business and what we're going to deliver instead of how we manage COVID-19 day to day and I thought it would be useful perhaps to just reflect on where we've been and where we've taken the company over the last couple of years since we entered Covid. So first of all the thing you evolve.

Speaker 1: clearly have liked is that we've been able to simplify and make the business more efficient. And it's easy to observe and it's important. Obviously there are more important things to our long term future, but I'll spend a minute on simplification.

<unk> and clearly have life is that we've been able to simplify and make the business more efficient and it's easy to observe and it's important obviously there are more important things to our long term future, but I'll spend a minute on simplification.

Speaker 1: We've been able to use our push for new technology solutions, our push to reorganize the company in a more single goal fashion.

We've been able to use our push for new technology solutions are pushed to reorganize the company in a more single gold fashion.

Speaker 1: We've optimized third-party spending and tools and many things, and we've become a much more efficient enterprise in fact today. And I should mention, as you know, we've also shut down or sold off certain businesses that we believed were non-core. As a result of that, we're running the company now with roughly 10,000 fewer people than we were at the end of 2019, which is a great credit to the people who are here, who have driven a ton of hard work.

Optimized third party spending and tools and many things and we become a much more efficient enterprise in fact today I should mention as you know we've also shut down or sold off certain businesses that we believed were noncore as a result of that we're running the company now with roughly 10000 fewer people than we were at the end of 2019.

Which is a great credit to the people who are here, who have driven a ton of hard work towards that goal of really running the company in a smart smarter more efficient better way.

Speaker 1: Toward that goal of really running the company in a smart smarter more efficient better way

Speaker 1: So that's been the big push there. And I would say that as we, you know, we still face challenges of hiring people, you know, we're like all the tech companies, but we have had a great influx of terrific talent. I think that momentum is increasing and that mixed with the great talent we have has really created, put us in a great position as we move forward. And as we start to move to really being focused on delivery of new tech, new experience.

So that's been a big push there and I would say that as we are.

We still face challenges of hiring people, where like all the tech companies, but we have had a great influx of terrific talent and I think that momentum is increasing and that mixed with the great talent. We have has really created put us in a great position as we move forward and as we start to move to really being focused on delivery of new tech new experiences.

Speaker 1: and improving the traveler experience as our core fundamental goal.

And improving the traveler experience as our core fundamental go but as I say efficiency is not the story here efficiency is a great thing we've been able to achieve but the real story of our future is about what we're doing to drive the business forward. So just to break that into a few parts on the demand front as you know we've combined our.

Speaker 1: But as I say, efficiency is not the story here. Efficiency is a great thing we've been able to achieve. But the real story of our future is about what we're doing to drive the business forward. So just to break that into a few parts, on the demand front, as you know, we've combined our multiple brands working in silos into one unified house of brands with a singular focus on driving travelers to the right product at the right time. This strategy is built on superior creative.

<unk> brands working in silos into one unified house of brands with a singular focus on driving travelers to the right product at the right time. This strategy is built on superior creative.

Speaker 1: making the brands make sense together, buying together in an efficient way, and of course, using performance marketing along with brand to really drive a more efficient way of bringing travelers into our universe. We believe we are well on our way to that journey.

Making the brands make sense together buying together in an efficient way and of course using performance marketing along with brand to really drive a more efficient way of bringing travelers into our universe. We believe we are well on our way to that journey.

Speaker 1: I hope you enjoy our Super Bowl ads in a few days. I think they're terrific, but it is a unified strategy that's about really delivering end-to-end, a great demand generation strategy that is efficient.

You enjoy our Super Bowl ads and a few days I think they are terrific, but it is a unified strategy. That's about really delivering end to end a great demand generation strategy that is efficient and we believe can drive better outcomes in the future for US. We also believe as you know that loyalty will play an important role and we are bringing our loyalty.

Speaker 1: and we believe can drive better outcomes in the future for us. We also believe, as you know, that loyalty will play an important role and we are bringing our loyalty programs together and that will begin to take shape over the course of the year and I think pay dividends for years and years to come and we're excited about that.

Grams, together and that will begin to take shape over the course of the year and I think pay dividends for years and years to come and we're excited about that.

On the technical front.

Speaker 1: Now this has really been the heart and soul of what we've been working on, which is getting to a singular platform so that we can drive a velocity of innovation for travelers and for our partners and really take travel to the next iteration for the online app-based travel.

This has really been the heart and soul of what we've been working on which is getting to a singular platform. So that we can drive a velocity of innovation for travelers and for our partners and really take travel to the next iteration.

For the online App based travel business.

Speaker 1: We've been on this journey for a while. We've talked about how we're moving multiple stacks into a single stack. That's more than just the efficiency story or anything else. It's really about building it as a set of microservices with APIs that can be externalized and can more easily be used internally to drive these great outcomes for our travelers and our partners. And when I say travelers, I really mean all.

We've been on this journey for a while we've talked about how we're moving multiple stacks into a single stack that's more than just a like efficiency story or anything else, it's really about building it at the <unk>.

Set of micro services with API that can be externalized and can more easily be used internally to drive these great outcomes for our travelers and our partners.

Say travelers I really mean, all travelers because for the first time as we build this out we will be able to create innovation in our stack that impact all of our travelers are.

Speaker 1: is for the first time, as we build this out, we will be able to create innovation in our stack that impacts all our travel.

Speaker 1: sea travelers, our B2B travelers, all in the same moment. So when we make an improvement in the checkout path or we make an improvement in the app, all those benefits will inure to the traveler wherever they come from and it will be able to drive real impact instead of the siloed way we used to have to work our way through it. So I think it's a really important step for both how we run our business

<unk> all in the same moment, so when we make an improvement in the checkout path or we make an improvement in the app all those benefits will in Europe to the traveler wherever they come from and it will be able to drive real impact instead of the Siloed way, we used to have to work our way through it. So I think it's a really important step.

For both how we run our business.

Speaker 1: how much innovation and velocity we can bring to the travelers and partner experience, and frankly just generally how we innovate and drive the entire industry forward. We're really excited about what's coming. It's a big year of delivery for us, but there are amazing things coming we think for the traveler, from the discovery elements to the service elements and everything in between. Again, that will inure to the benefit of all travelers in our economy.

How much innovation and velocity, we can bring to the travelers and partner experience and frankly just generally.

Now, how we innovate and drive the entire industry forward, we're really excited about what's coming it's a big year of delivery for us but.

There are amazing things coming we think for the traveler from the discovery elements to the service elements and everything in between and again that will inure to the benefit of all travelers in our ecosystem.

Speaker 1: And finally on the B2B side, which is really now an amalgamation of our B2B partners who drive demand and our partners who bring us supply, and more and more we see that as one universe. We combine those.

And finally on the on the <unk> side, which is really now an amalgamation of our <unk> partners, who drive demand and our partners, who bring us supply and more and more we see that as one universe. We combine those teams into one group that essentially you can have a 360 relationship with any partner and therefore any partner.

Speaker 1: into one group that essentially can have a 360 relationship with any partner. And therefore, any partner can benefit not only from selling into our platform, but also taking services out of our platform.

There can benefit not only from selling into our platform, but also taking services out of our platform and we think that approach is going to be really powerful we kept very close to our partners over the pandemic, obviously, we've had a share challenges and opportunities.

Speaker 1: And we think that approach is going to be really powerful. We've got very close to our partners over the pandemic, obviously we've had shared challenges and opportunities and we've renewed a lot of deals across lodging, air and car. And most of these deals have come with expanded capabilities where we've delivered more for our partners and we believe help them drive their own businesses to better our.

And we renewed a lot of deals across lodging air and car and most of these deals have come with expanded capabilities, where we've delivered more for our partners and we believe help them drive their own businesses to better outcomes. We're excited about this partnership approach. It's no longer just about supply or just about can we drive the man it's really about.

Speaker 1: We're excited about this partnership approach. It's no longer just about supply or just about can we drive demand. It's really about can we make our partners' businesses better, and what we're keenly focused on.

Can we make our partners' businesses better and we're keenly focused on that.

Speaker 1: So to close, I'll just say, you know, you can never count COVID out. We've dealt with a fair number of body blows over the last couple of years, but the industry has proven resilient. I think demand has proven even more resilient and we expect a significant rebound. And while we're excited to ride the rebound,

So to close I'll, just say you can never count cope it out we've dealt with a fair number of body blows over the last couple of years, but the industry has proven resilient I think demand has proven even more resilient.

And we expect a significant rebound and while we're excited to write the rebound.

Speaker 1: The important thing for us is really delivery. We have to deliver on all the promises we've made about how we're going to improve the product, travel experience, and how we're going to continue to run an efficient and effective business.

The important thing for US is really delivery, we have to deliver on all the promises we've made about how we're going to improve the product traveler experience.

How we're going to continue to run an efficient and effective business and I would just say ultimately we believe in the reigniting a travel we think we're going to play a central role in it.

Speaker 1: And I would just say, ultimately, we believe in the reigniting of travel. We think we're going to play a central role in it. We're not intended to sit back and write it. We want to be important in driving the future of the industry. And we believe we can bring benefit not only to travelers, not only to our own business, but to the entire travel ecosystem. And that is what we will be focused on.

We're not content to just sit back and right we want to be important to driving the future of the industry and we believe we can bring benefit not only to travelers not only to our own business, but to the entire travel ecosystem and that is what we will be focused on this year and with that I'll turn it over there thanks, Peter and thanks, everyone for joining the call.

Speaker 1: And with that, I will turn it over to Eric. Thanks, Peter. And thanks, everyone, for joining the call.

Speaker 2: I too am optimistic around a travel recovery this year and along with Peter, I'm excited to see us deliver more for travelers and partners. With that I'd like to start by providing a...

I'm optimistic around travel recovery this year and along with Peter I'm excited to see us deliver more for travelers and partners.

With that I'd like to start by providing an update on booking trends.

Speaker 2: While we witness the notable pullback due to Omicron in December , which continued into January , I am encouraged by the improvement we have seen in the past.

While we witnessed a notable pullback due to omicron in December which continued into January I am encouraged by the improvement we have seen in recent weeks overall in the fourth quarter. Our total gross bookings for all products net of cancels were down 25% versus Q4 of 2019.

Speaker 2: Overall on the fourth quarter, total gross bookings for all products, net of cancels were down 25% versus Q4 of 2019. A slight sequential increase in the gross bookings for all products, net of cancels were down 25% versus Q4 of 2019.

Slight sequential improvement versus third quarter.

Speaker 2: And when compared to 2019, we have continued to see a mix shift towards locking, and more specifically, burbo versus air.

And when compared to 2019, we have continued to see a mix shift towards locking in more specifically bareboat versus air.

Speaker 2: Given the continued volatility of the recovery due to Omicron, again this quarter we are providing monthly detail on our total logic bookings net of cancels, which includes hotel and burger.

Given the continued volatility in the recovery to the OMA crop again this quarter, we are providing monthly detail on our total lodging bookings net of capsules, which includes hotel Umberto.

Speaker 2: For October it was down 4% versus 2019.

For October it was down 4% versus 2019.

Speaker 2: It was down 5% in November , 27% down in December , down 11% in January .

Was down 5% in November 27% down in December .

Out of 11% in January with.

Speaker 2: with trends improving throughout January , and with us up versus 2019 in the most recent week.

With trends improving throughout January and what Thats up versus 2019, and the most recent weeks.

Speaker 2: From a geography perspective, this improvement has been driven by the US, followed by EMEA, while APAC and LATAM are lagging.

From a geography perspective, this improvement has been driven by the U S followed by India.

And Latam are lagging.

Now onto the P&L.

Speaker 2: Total revenue was down 17% versus Q4 2019, roughly the same level of decline we saw last quarter.

Total revenue was down 17% versus Q4 2019 at roughly the same level of decline we saw last quarter.

Speaker 2: As a reminder, we closed the Agencia deal on November 1st. In the quarter, Agencia contributed $29 million in revenue. Note this does not include revenue tied to the 10-year Logging Supply Agreement, our EPS business entered into.

As a reminder, we closed the deal on November one.

In the quarter Egencia contributed $29 million in revenue.

This does not include revenue tied to the 10 year license and supply agreement, our EPS business entered entertainment Cheesecake.

Revenue margin for the fourth quarter was 13% down from 16% last quarter largely due to typical seasonality.

Speaker 2: Revenue margin for the fourth quarter was 13%, down from 16% last quarter, largely due to typical...

Speaker 2: On sales and marketing, direct spend in Q4 was roughly $875 million, down 12% versus Q4 2019 levels, compared to 19% decline last quarter.

Our sales and marketing direct spend in Q4 was roughly $875 million down 12.

Percent versus Q4 2019 levels.

Fair to 19% decline last quarter.

Speaker 2: As you know, Q1 is a seasonal low point for EBITDA given the timing disconnect between higher marketing expense ahead of summer travel and lower state and room nights.

As you know Q1 is a seasonal low point for EBITDA given the timing disconnect between higher marketing expense ahead of summer travel and lower state and room nights in Q1.

Speaker 2: And this timing impact could be further amplified this year due to lower states and Q1 due to Omicron and our spending into the recovery based on the recent improvements and trends.

It's timing impacts could be further amplified this year due to lower state and you want to do that on a crime and our spending into the recovery based on the recent improvements in trends were up there.

Speaker 2: Moving on, overhead costs exclude intergencia in both periods, with up $23 million versus Q3 2021, primarily driven by the lower ability to capitalize labor and

Moving on overhead costs, excluding the genocea in both periods was up $23 million versus Q3, 2021, primarily driven by the lower ability to capitalized labor in the fourth quarter.

Speaker 2: Looking ahead to this year, as we compete for great talent, we anticipate higher-than-normal annual compensation increases, which take effect on April 1.

Looking ahead to this year as we compete for great talent, we anticipate higher than normal annual compensation increases, which take effect on April 1st.

Speaker 2: In total, adjusted EBITDA was $479 million, up a million dollars versus 2019 levels despite revenue down 17%.

And total adjusted EBITDA was $479 million.

$1 million versus 2019 levels, despite revenue down 17%.

Speaker 2: This marks the third consecutive quarter of positive adjusted EBITDA, and our highest Q4 EBITDA ever. And I believe the fourth quarter performance further illustrates how we are running a much more efficient business versus prior to the pandemic.

This marked the third consecutive quarter of positive adjusted EBITDA, and our highest Q4 EBIT ever and I believe the fourth quarter performance further illustrates how we are running a much more efficient business versus prior to the pandemic.

Speaker 2: On to pre-cast flow, which totaled roughly $142 million in Q4 on a reported basis.

On the free cash flow, which totaled roughly $142 million in Q4 on a reported basis.

Speaker 2: Excluding the change in restricted cash, which is primarily driven by the change in Burbos deferred merchant bookings, free cash flow was $35 million.

Excluding the change in restricted cash, which is primarily driven by the change in Burma deferred merchant bookings free cash flow was $35 million.

Now shifting to the balance sheet.

In 2021, our debt refinancing yielded approximately $80 million in annual interest expense savings and paying off the full $1 $2 billion in preferred stock last year.

Speaker 2: In 2021, our debt refinancing yielded approximately $80 million in annual interest expense savings, and paying off the full $1.2 billion in preferred stock last year saves us approximately $115 million in annual dividend payments.

Approximately $115 million in annual dividend payments our payouts.

Speaker 2: More recently, we informed the holders of our 650 million euro bond last week of our intention to pay off the notes at the beginning of March, which is three months ahead of their maturity.

More recently, we have formed the holders of our $650 million million Eurobond last week of our intention to pay off in the beginning of March which is three months ahead of their maturity date.

Speaker 2: This allows us to save approximately $5 million in interest expense this year, or $19 million annually, while also improving our leverage ratio.

This is the same approximately $5 million of net interest expense this year or $19 million annually, while also improving our leverage ratios.

Speaker 2: Overall, we are pleased to have maintained our investment grade rating through the pandemic and remain committed to deleveraging while also looking for ways to further reduce our cost.

Overall, we are pleased to have maintained our investment grade rating through the pandemic and remain committed to deleveraging. While also looking for ways to further reduce our cost of capital.

Speaker 2: In closing, despite the continued impact of the pandemic in 2021, and most recently from Omicron, I am encouraged by the continued progress made last year to reshape the company and further improve our financing position going forward.

In closing despite the continued impact on the pandemic in 2021, and most recently from Accra I'm encouraged by the continued progress made last year to reshape the company further improve our financial position going forward as mentioned I am optimistic about travel recovery this year and excited to see how this year unfolds for the company.

Speaker 2: As mentioned, I am optimistic about a travel recovery this year and excited to see how this year unfolds for the company. With that, Emily.

With that Emily we are ready for our first question.

Speaker 3: Thank you, Eric. As a reminder, if you would like to ask a question, please do so now by pressing start followed by one on your telephone keypad. If you wish to withdraw your question from the queue, please press start followed by two. When preparing to ask your question, please ensure that your device is unmuted locally.

Thank you Eric as a reminder, if you would like to ask a question. Please do so now by pressing star followed by one on your telephone keypad. If you wish to withdraw your question from the queue. Please press star followed by King.

Turning to ask your question. Please ensure that your device is on muted nicely.

Speaker 3: Our first question today comes from the line of Kevin Koppelman from Cohen and Company.

Our first question today comes from the line of Kevin Kopelman from Cowen and company Kevin Your line is open.

Speaker 2: Thanks a lot. First, I want to ask about the loyalty program. Can you give us more details on when you expect to roll out the consolidated loyalty program, how that might change? And if you can give us a sense of how important your loyalty programs are today, and maybe where they could go. Thanks.

Thanks, a lot first I wanted to ask about the loyalty program can you give us more details on when you expect to rollout the consolidated.

Loyalty program, how that might change.

And if you can give us a sense of how important your loyalty programs are today, and maybe where that could go.

Speaker 1: Yeah. Thanks, Kevin. Well, I'll say a couple things. First, you know, this is an ongoing effort. As recently as this quarter, we just revamped our Expedia loyalty program to create a construct that we think is better for travelers and kind of directionally and where we're headed more broadly for a loyalty program. But there is a lot of migration going on. We're migrating the whole stack, as I talked about.

Yes, thanks, Kevin.

I'll say a couple of things first you know this is an ongoing effort as you know as recently this quarter, we just revamped our expedia loyalty program to create a construct that we think is better for travelers and kind of directionally in and where we're headed more more broadly.

Loyalty program, but there is a lot of migration going on.

Migrating the whole stack as I talked about we're migrating.

Speaker 1: brand front ends into one onto one set of rails. And we are

Brand front ends into one onto one set of rails.

And we are.

Rebuilding our loyalty platform to accommodate one broad royalty construct that can serve all the different brands and so the big difference that's coming it's really that the loyalty program will cover all of our brands all of our products and you'll be able to earn and burn across all of them, which is a great innovation all the research.

Speaker 1: rebuilding our loyalty platform to accommodate one broad loyalty construct that can serve all the different brands. And so the big difference that's coming is really that the loyalty program will cover all our brands, all our products, and you'll be able to earn and burn across all of them, which is a great innovation. All the research shows that it's the most important thing to customers is having the aggressive product.

It shows that it's the most important thing to customers is having a breadth of products.

Speaker 1: And so we think it's going to be a great win for them. All the details are still being worked out of exactly how that policy.

And so we think it's going to be a great win for them. All the details are still being worked out and exactly how that policy and planning work, although I think the expedia construct is more or less in line with where we're headed in terms of California's work et cetera.

Speaker 1: planning will work, although I think the Expedia construct is more or less in line.

Speaker 1: where we're headed in terms of how points work, et cetera. But it will take the better part of this year to get all those pieces lined up. And of course, a rollout of the loyalty program, including converting loyalty people over from one to another, and adding it to front ends that haven't had it and all those pieces. It's not just like you flip one switch. It's a switch after a switch after a switch. So I think it will take us the better part of this year to really have the product where we want it.

But it will take the better part of this year to get all those pieces lined up and of course, a rollout of the loyalty program, including converting loyalty people over from one to another and adding it to program to front ends that haven't had it and all of those pieces. It's not just like you flipped one switches switch afterwards, which after switch so I think.

It will take us the better part of this year to be a really.

Have the products, where we wanted to be starting to convert everybody over to it but so I think next year will be the big impacts here.

Speaker 1: starting to convert everybody over to it. But so I think next year will be the big impact year.

The whole stickiness in totality of royalty, but I think it's a it's a.

Speaker 1: stickiness and totality of loyalty. But I think it's a big year for us as we build into it. And hopefully, we'll be moving some of the program over to that in the course.

Big year for us as we built into it and hopefully we'll be moving some of the program over to that in the course of this year.

Speaker 2: Thanks, Peter, and if I could just ask about the latest trends, you noted that that lodging is now up in the last week versus 2019. Can you talk about how that might play out given. Cities haven't fully come back yet and international travel is still certainly not fully back given the restrictions are not are not up yet.

Thanks, Peter and if I could just ask you about the latest trends.

You noted that.

That lodging is now up in the lab.

Last week versus 2019 can you talk about how that might play out given.

Cities haven't fully come back yet in international travel is still.

Certainly not fully back given the restrictions or not or not yet.

Yes sure.

Speaker 1: Yeah, sure. Well, I think, look, there's a lot of benefit in that for us in the sense that historically big cities and international have been an area of strength for us.

I think look there's a lot of benefit and that for us in the sense that historically big sees in international that's been an area of strength for us relative to some of what we've seen during COVID-19 like domestic travel into tertiary markets et cetera, which it had been historically weak on the other hand, we benefited greatly.

Speaker 1: relative to some of what we've seen during COVID like domestic travel into tertiary markets etc. which have been historically weak.

Speaker 1: On the other hand, we've benefited greatly. For a purple it's been super strong. It's benefited from the Weezer travel and the longer term travel of...

<unk> has been Super strong it's benefited from the leisure travel in the longer term travel of the kitchen around on people liking that during COVID-19 , where they can isolate with their families et cetera.

Speaker 1: Occasionally around some people liking that during COVID, where they could isolate with their families, et cetera. So it's a little tricky to predict, but I would say broadly the stuff that's left to come.

Good a little tricky to predict but I would say broadly the stuff that's left to come.

Speaker 1: in many ways favors our strongest areas.

In many ways favors our strongest areas.

Speaker 1: So I think that's positive, but, you know, the mixes have been hard to predict over time, and so I don't want to get too...

So I think that's positive but.

The mixes have been hard to predict over time, and so I don't want to get too.

Speaker 1: Get too much into prognosticating, but I think we've got some good runway ahead in where the puck is going.

Get too much into prognosticating, but I think we've got some good runway ahead, and where the puck is going.

Speaker 1: two metaphors there. And we feel good about that. You never know what the back-end unintended consequences are, but I think being positive now with everything that's left to come is making us feel pretty good.

Next to Matt of course, there but.

And we feel good about that.

You never know what the backend unintended consequences are but I think being.

<unk> now with everything that's left to come is making us feel pretty good.

Great. Thanks, so much.

You bet.

Speaker 3: Our next question today comes from the line of Naveed Khan from Truest Securities. Naveed, your line is open.

Our next question today comes from the line of <unk> Khan from <unk> Securities.

David Your line is open.

Great. Thank you.

Two questions. Please.

Speaker 4: Maybe just one on the on the on the comeback and travel as it continues to build.

Maybe just one on the <unk> when they come back in time and as it continues to build in.

Speaker 4: And 22, how do you see the mix of direct versus paid traffic coming to your platform? Can you maybe just touch on the opportunities between the different levers that you have to pull between CRM versus branding versus performance channels? And then maybe just another word on capital allocation. So you continue to deleverage and also you have kind of gotten preferred out.

And 'twenty two how do you see the mix them direct which is paid traffic.

Coming to your platform can you maybe just touch on the opportunities between the different levers that you have to pull.

Within CRM machines.

Branding.

<unk> channels and then maybe just.

Another one on capital allocation. So you continue to deleverage and.

So you have kind of brought new preferred out.

Speaker 4: How do you kind of see the scope for M&A opportunities here and maybe other use of capital like share buyback? Can we talk about that a little bit?

How do you kind of see the scope for M&A opportunities here and maybe they use us.

Capital.

Share buybacks.

Talk about that a bit.

But.

Yes.

Speaker 1: Sure, I'll go first and be able to come back and travel.

Sure.

First in and be able to come back in travel.

Speaker 1: You know, I think, as you mentioned, CRM, you know, we have so much opportunity to improve our direct relationship with consumers. You know, we've historically fished out of the big ponds of

I think.

I'm glad you mentioned CRM, we have so much opportunity to improve our direct relationship with consumers.

Historically fished out of the big parts of it.

Speaker 1: Google and Meta, et cetera, and brought customers in. And candidly, not done a good enough job in retaining those customers and making it sticky and making sure the experience is good. We are keenly focused.

And matter et cetera.

Customers in.

Candidly not done a good enough job in retaining those customers and making a sticky and making sure. The experience is good we are keenly focused on bringing travelers and now making sure. They enjoy all the benefits of what we have to provide member pricing loyalty et cetera, and they and if they get a better.

Speaker 1: bringing travelers in and out, making sure they.

Speaker 1: enjoy all the benefits of what we have to provide, member pricing, loyalty, et cetera, and that they get a better app experience, better CRM, which we are rebuilding like everything else. And we really focus.

App experience better CRM, which we are rebuilding like everything else.

And we really focus on retaining them and keep them coming back as often as possible directly. It doesn't mean, we don't expect to use performance marketing and all the usual channels, but we want to be able to derive much more long term value from those customers, we acquire and then in turn key.

Speaker 1: and keep them coming back as often as possible directly. It doesn't mean we don't expect to use performance marketing and all the usual channels, but we want to be able to derive much more long-term value from those customers we acquire and then in turn keep. So,...

<unk>.

Speaker 1: We hope very greatly that the denominator will be expanding, we'll just be bringing in more travelers, and that more and more of them we will be able to create direct relationships where they are coming back, they recognize the benefits we give them in price and service.

We hope very greatly that the.

That's the denominator will be expanding we will just be bringing in more travelers and that more and more of them will we will be able to create direct relationships, where they are coming back. They recognize the benefits we get down in price and service discovery and everything else, obviously theres more to come there because as the products improve and experienced improved at all.

Speaker 1: and everything else. Obviously there's more to come there because as the products improve and experience improves it all gets easier and that flywheel presumably you know turns faster but that is our focus and that is what we hope to derive from this. We're not we're not projecting what percentage will be what but it is

It's easier to connect flywheel, presumably.

I'll turn it faster, but that is our focus and that is what we hope to derived from this we're not we're not projecting what percentage will be what but.

It is.

Speaker 1: very closely tied to all the work we are doing to drive the traveler experience.

Very closely tied to all the work we're doing to drive the traveler experience.

Speaker 5: Great, and I'll take the second part of the question around capital allocation. And I know we've talked about it in previous quarters, and I think our message remains the same. We are keenly focused on cleaning up our balance sheets.

Great and I'll take the second part of the question around capital allocation.

We've talked about in previous quarters, and I think our message remains the same we are keenly focused on.

Leaning up our balance sheet, if you will given the disruption that we've.

Speaker 5: experience over the last couple of years. That includes de-levering the business. We've talked about the preferreds that we paid off. We've talked about the Euro bomb we're paying off and we're going to continue down the path of de-levering, which of course can take the form of growth and the underlying ethos of it also.

Over the last couple of years that includes key levering the business we've talked about the preferred so we paid off just talking about the eurobond are paying off and we're going to continue down the path of Delevering, which of course can take the form of growth in the underlying EBITDA, but also.

No.

Speaker 5: debt as appropriate. I want to lower the cost of capital as well in my prepared remarks talked about a couple of areas where we have quite significantly reduced the cash flow required to service whether it's the preferreds or different debt instruments.

Want to lower the cost of capital as well in my prepared remarks talked about a couple of areas where we are.

Quite significantly reduced.

Cash flow required to service, whether it's the preferreds or.

Different debt instruments.

Speaker 5: keenly focused on maintaining investment grade and quite proud that we've been able to do that over the last couple of years given the amount of disruption that we've had. And then a slight other lens on that as well is Peter's talking about the...

Keenly focused on maintaining an investment grade quite proud that we've been able to do that over the last couple of years, given the amount of disruption that we've had.

And then a slight other lens on that as well.

Peter is talking about the.

Speaker 5: the growth opportunities ahead of us and the opportunity for the company, and want to make sure that we are enabling that as best we can so that we can go as fast as we can in achieving that.

The growth opportunities ahead of us and the opportunity for that for the company and want to make sure that we are enabling that especially cancer that we can go assesses the cannon.

Sure.

Speaker 5: Specifically on two components that you mentioned, on M&A, we're always open for business. Even during the heart of COVID, we were open to business to a certain extent. But obviously, that wasn't necessarily the right opportunity or the right time as things coming up. But we are looking at different opportunities opportunistically and a few things that we're thinking about.

Specifically on two components that you mentioned on M&A.

We're always open for business, even during the heart of Covid, we were open for business to a certain extent, but obviously that wasn't necessarily the right opportunity for the right time as things coming up but we are looking at different opportunities opportunistically and in a few themes that we're thinking about.

Speaker 5: And then on buybacks, I think you can look at our long history as something that we have done regularly and consistently. I fully suspect that we will get back to that at the right time. And something that we will think about over the coming months. But again, we're going to observe COVID. We're going to clean up the balance sheet, if you will, and all the components that I talked about. That's where we're focused right now.

And then on buybacks I think you can look at our long history is something that we have done regularly.

I fully suspect that we will get back to that at the right time.

That we will think about over the coming months, but again were going to observe covet.

Clean up the balance sheet. If you will in all of the components that I talked about that for us right now.

Speaker 1: Yeah, and I would just add, just to close that one out, that on the M&A front, you know, we're much more focused. It has to fit with our long-term strategy, our platform strategy. It has to integrate. Well, we're not going to be just buying things because they're good deals. We're going to buy things that fit our long-term strategy and drive where we're trying to drive things. Good, goodbye.

Yeah, and I would just add just to close I want to note that on the M&A front, we're much more focused it has to fit with our long term strategy. Our platform strategy. It has to integrate what we're not going to be just buying things because they're good deals we're going to buy things that fit our long term strategy to drive where we're trying to drive.

Okay.

Understood.

Thank you Eric.

Okay. Thank you.

Speaker 3: Our next question today comes from Eric Sheridan from Goldman Sachs. Eric, please go ahead.

Our next question today comes from Eric Sheridan from Goldman Sachs.

Eric Please go ahead.

Speaker 6: Thanks so much for taking the question. I hope you're both well.

Thanks, so much for taking the question hope you're both well maybe just teasing out more on the capital allocation front to bring you back to margins.

Speaker 6: You know, Peter, Eric, can you help frame for us, you know, I know you've laid out before that you've exited sort of the efficiency program that you laid out from a couple of years ago. And there's obviously investment.

Peter Eric can you help frame for US I know you laid out before that you've exited sort of the efficiency program that you laid out from a couple of years ago and this is obviously investments against your ambition you feel you need to make in 2223 to capture some of that growth, but how should investors think about element, so where there is leverage driven.

Speaker 6: against your ambition you feel you need to make in 22 and 23 to capture some of that growth. But how should investors think about elements of where there is leverage driven by volume that can flow through the model over the next 12 to 24 months versus areas where you want to take incremental margin or incremental leverage and invest it back because you're playing sort of the long game over the next three to five years against the bigger travel opportunity. Just some of the variables that could flex.

By volume that can flow through the model over the next 12 months to 24 months versus areas, where you want to take incremental margin or incremental leverage and invest it back because you're playing the long game over the next three to five years against the bigger travel opportunity just some of the variables that could flex.

Speaker 6: margin leverage one way or another in the next 24 months. Thanks.

Leverage one way or another in the next 24 months. Thanks.

Sure, Thanks, Eric and I hope, you're well as well.

Speaker 1: your will as well. We, you know, the way I think you should think about it is this, we have, as I mentioned, there's a lot of work still going on into building the platform to get in the platform.

The way I think you should think about it is this we have as I mentioned theres a lot of work still going on and to building the platform to get into platform right. When those things are right. They will drive further efficiencies. So when you say we've exited the program. It wasn't like a program with a goal that we ended up.

Speaker 1: When those things are right, they will drive further efficiency. So when you say we've exited the program, it wasn't like a program with a goal that we ended, etc. We're finished. This is an ongoing drive for us to create the most efficient enterprise we can, which is not about taking people out. It's about being efficient in how we work, what we work on, how technology aids us, etc. There are lots of places where, for example, I'll give you one service.

Finished this is an ongoing drive for us to create the most efficient enterprise we can.

It's not about taking people out it's about being efficient in how we work.

We're working on and how technology Asos etcetera. There are lots of places where for example, I'll give you one service we continue to build the best service technology I believe in the industry and scale. It consistently we are building skills across the enterprise so that customers can service their own issues.

Speaker 1: continue to build the best service technology I believe in the industry and scale it consistently. We are building skills across the enterprise so that customers can service their own issues themselves and easily. It's an ongoing process, but the benefit of the efficiency born of those improvements has not really been seen because COVID has had this enormously elevated service demand on the industry.

Sales and easily it's an ongoing process, but the benefit of the efficiency born of those improvements has not really been seen because COVID-19 has had this enormously elevated service demand on the industry. So as we normalize out to historical propensity is for service calls instead.

Speaker 1: So as we normalize out to historical propensities for service calls, et cetera, et cetera, there is real benefit down the road in how we do that. Now, you alluded to there are places we are, quote, investing in. I mean, that is really just our way of saying we are pushing to drive this innovation and drive us across these.

Et cetera, there is real benefit down the road and how we do that now you alluded to there are places we are investing in I mean that is really just our way of saying we are pushing to drive this innovation and drive us across these breaches as quickly as we can and if we have if we need to invest more in people and resources.

Speaker 1: bridges as quickly as we can, and if we have, if we need to invest more in people and resources to drive some of this innovation, we will do it. But the innovation in and of itself will drive incremental efficiency. So I don't think this is a long-term, like, this is a long-term sideways to down, you know, or I should say expanding margin story, we believe.

To drive some of this innovation, we will do it but the innovation in and of itself will drive incremental efficiency. So I don't think this is a long term like this is a long term sideways to down.

I should say expanding margin story, we believe driven by the technical efficiencies that the product will drive and if there is some bumps in the road as we get there and if we have to you know.

Speaker 1: driven by the technical efficiencies that the product will drive. And if there's some bumps in the road as we get there, if we have to flex up to drive in an ovation faster, we may do that because we think it's the right thing for the traveler and for our partners. But overall, there's still much more opportunity to become more efficient over time for margins to expand and we believe that's what we will continue to do.

Flex up to drive innovation faster, we may do that because we think it's the right thing for the traveler input for our partners, but overall there is still much more opportunity to become more efficient over time for margins to expand and we believe that's what we will continue to drive towards.

Great. Thank you.

Speaker 3: Our next question comes from the line of Lloyd Walmsley from UBS. Lloyd, please go ahead. All right, thank you.

Our next question comes from the line of Lloyd Walmsley from UBS and Deutsche. Please go ahead.

Hi, Thanks, two questions if I can first.

Speaker 7: Any update on just the marketing integration, consulting data and ops into a unified group? Like any early learning?

Any update on just the marketing integration consulting data and ops into a unified group like any Ernie early learnings there and then secondly can you kind of help us.

Speaker 7: there. And then secondly, can you kind of help us parse out the strong ADR growth? Like how much of that is a function of homo-a growing in the mix?

The strong ADR growth like how much of that is a function of homeaway growing in the mix.

Speaker 7: And I guess more importantly, like, what are the puts and takes of how you see ADRs migrating over the course of the year? Like, is this still a big tailwind? Because like for like channel pricing is going up or there's like a shift back to core hotel offset that like, how do we think about ADRs over the course of the year?

And I guess more importantly, like what are the puts and takes of how you see ADR is migrating over the course of the year.

I think tailwind.

Because like for like channel pricing is going up or because they can shift back to core hotel offset that like how do we think of that in the course of the year.

Thanks Lloyd.

Speaker 1: Thanks, Lloyd. I'll take the first part, and by the way, watch the Burbo ad this weekend so you start saying Burbo instead of HomeAway.

I'll take the first part and by the way what's the verbal at this weekend. So he started saying barebones Oh boy.

Speaker 1: the on the marketing integration, you know, we've made a lot of progress, sir, you know, in in moving along on the marketing integration and the data and analytics.

On the marketing integration, we've made a lot progress sorry.

And moving along on the marketing integration and the data and analytics and measurement et cetera, I'd say, we're virtually all the way they're not quite all the way there and the learnings have been coming.

Speaker 1: measurements, etc. I'd say we're virtually all the way there, not quite all the way there. And the learnings have been coming. You know, Eric and I see reports weekly about where we're winning, where we're learning things, where we're testing things. There's no like silver bullet, like, oh, we found this and it's going to win everything. It's really a game of, you know, a thousand different little tests across a hundred geos.

Eric and I can see reports weekly about where we're winning we're learning things, where we're testing things theres no silver bullet to like Oh, we found this and it's going to win everything its really a game of a thousand different little tests across 100, geos across five product groups et cetera et cetera. So.

Speaker 1: five product groups, et cetera, et cetera. So all of it is incrementally getting there. We're feeling quite positive about a number of things we've been testing and learning. We're pushed heavily into mobile and other areas where we found that we're doing. We're pushing into new products and social products and other things where we found opportunity that is.

All of it is incrementally getting there we're feeling quite positive about a number of things we've been testing and learning.

Pushed heavily into mobile and other areas, where we found that we're doing we're pushing into new products.

And social products and other things, where we found opportunity that is sort of tantamount to performance marketing in certain ways. So there's a lot of interesting learnings going the reality is until things normalize is going to be really hard to measure us on this because you can't see what normal is anymore and even for US it's hard to see what normal is and a lot.

Speaker 1: sort of tantamount to performance marketing in certain ways. So there's a lot of interesting learnings going. The reality is, until things normalize, it's going to be really hard to measure us on this because.

Speaker 1: can't see what normal is anymore. And even for us, it's hard to see what normal is. And a lot of these new tests, new algorithms are learning on these very volatile traffic patterns because of COVID, et cetera. So I think we feel good about the technical progress the teams are making, about the way they've plotted out their course of learning and testing. And there's no question it will endure to our benefit. But being able to.

These new tests, new algorithms are learning on these very volatile traffic patterns.

But et cetera. So I think we feel good about the technical progress. The teams are making about the way they plotted out there of course is learning and testing.

And there's no question it will inure to our benefit but being able to.

Speaker 1: Identify a single thing or a single win or had it bonafide is really hard to do at this moment So I think you have to wait for the collective good to roll through our P&L and you know Hopefully you'll see it as things normal

Identify a single thing or a single win or how to quantify it is really hard to do at this moment. So I think you'll have to wait for the collective good to roll through our P&L and hopefully you will see it as things normalize.

And on the ADR side.

I'll give a sense for a look back and then look forward, obviously won't go into the details but to help you frame it.

Speaker 5: sense for a look back and then a look forward. Obviously, we won't go into the details, but to help you frame it.

Speaker 5: think about the historic core ADRs that continue to be strong across both Hotel and Birdau.

When you think about the historic.

Or ADR as they continue to be strong across both hotel and Barbara.

You can see that across some of the other industry companies our metrics and then our mix in particular has benefited from more weighting to the U S. We're waiting to hear about more waiting in vacation destinations, where theyre typically are higher adr's. So our high ADR performance. If you will it's a mix of both core ADR.

Speaker 5: to that across some of the other industry companies or metrics. And then our mix in particular has benefited from more weighting to the US, more weighting to Vrbo, more weighting to vacation destinations where there typically are higher ADRs. So our high ADR performance, if you will, is a mix of both core ADRs and the mix that we've had over the last.

And the mix that we've had over.

Last quarter.

Prior to that as well.

Speaker 5: Moving forward, we do expect board ADRs to remain strong. We think this is going to be a strong rebound travel year.

Moving forward, we do expect 40% ADR is to remain strong and we think this is going to be a strong rebound traveling year, we ought to see.

Speaker 5: We have lots of bookings already going into the summer period where we can see the ADRs are holding up quite well. But I do think you need to look at when you take the core into the projection of our business.

Lots of bookings already going into the summer period, where we can see the ADR is holding up quite well and but I do think you need to look at when you look at the take the core into the protection of our business presuming some of other areas of our business come back its still going to be a mix, we're going to go into some primary markets that have some higher ADR.

Speaker 5: presuming some of our other areas of our business come back, it's still going to be a mix. We're going to go into some primary markets that have some higher ADRs. We're also going to mix into Europe a bit more, potentially APAC when it starts rebounding last hand so and so.

We're also gonna Miss Center, Europe , a bit more actually APAC when it starts regarding Latam summer so far more than the hotel then presumably virgo not predicting any degradation in Morocco, but just from a mix perspective, and so I need to protect that ADR for us.

Speaker 5: more in the hotel than presumably Vrbo, not predicting any degradation in Vrbo, but just from a mixed perspective. As you project that ADR for us, I expect that will normalize to a certain extent over time, but again, it's on the back of four underlying strong ADRs.

I expect that will normalize to a certain extent over time, but again, it's on the backup for underlying strong videos.

Alright, thank you.

Thank you.

Speaker 3: Our next question comes from Justin Post from Bank of America. Justin, your line is open.

Our next question comes from Justin Post from Bank of America, Justin Your line is open.

Speaker 2: Great, thanks. First question, can you help us at all with with summer booking pacings, whether lodging or in total versus either 19 or last year? And then 2nd, I don't know if you can help us at all, but I'm just thinking about verbal as a percent of the total. I imagine it's grown a lot over the last couple of years. But if you could help us think about where that could be today. Thank you.

Great. Thanks first question can you help us at all with summer booking pacings weather lodging or in total versus either 19 or last year.

And then second I don't know if you can help us at all but just thinking about <unk> as a percentage of total I imagine it's grown a lot over the last couple of years, but if you could help us think about where that could be today. Thank you.

Yes.

Speaker 5: Yeah, I'll take that one. Thanks for the question, Justin. So, VRBO continues to perform well overall.

Yes, I'll take that one thanks for the extra question Justin.

Perfect continues to perform well overall.

Speaker 5: We see strength against 2019, we see strength against 2021, obviously not going to go into the specific details of those, but the brand and the product category are both doing quite well. When you ask about summer bookings or pacing, we're...

We see strength against 2019, we see strength against 2021, obviously not going to go into the specific details of those but the the.

The brand and the product category are both doing quite well when you asked about summer bookings are pacing.

Speaker 5: seeing ourselves up against both of those time periods that I just mentioned, both 2019 and 2021. So it's not only that that category is floating up, but it continues to to win share, if you will, in this market. Hotel on the other side is recovering, not quite at the levels that we would have seen in the past.

Sure.

And ourselves up against both of those time periods that I've just mentioned about 2019 and 2021. So it's not only the category slowing up but it continues to win share and do well in this market hotel and the other on the other side is recovering not quite at the levels.

That we would have seen in the past.

Speaker 5: We suspect if the recovery continues that there will be a catch-up somewhere along the line.

We suspect that the recovery continues that.

There'll be a catch up somewhere along the line.

Right.

Okay. Thank you.

Okay.

Speaker 3: Our next question comes from Deepak Mehtavanan from Wolf Research. Deepak, please go ahead.

Our next question comes from Deepak <unk> from Wolfe Research.

Please go ahead.

Great. Thanks for taking the questions just a couple ones can you talk about the hiring plans and head count levels for 2020 do you know do you feel like you are in a good position with respect to head count right now.

Speaker 8: Great, thanks for taking the time to ask questions. Just a couple of ones.

Speaker 8: Can you talk about the hiring plans and headcount levels for 2022? You know, do you feel like you're in a good position with respect to headcount right now and generally well-prepared for demand recovery across various products? Are there also any notable wage inflationary trends, you know, that you're seeing currently?

Generally well prepared for demand recovery across various products are there also any notable wage inflationary trends that you're seeing currently and then second question on variable marketing efficiency on the direct marketing side can you help us maybe in a qualitative way to kind of understand how much efficiencies youll see.

Speaker 8: And then a second question on variable marketing efficiencies on the direct marketing side. Can you help us maybe in a qualitative way to kind of understand

Speaker 8: how much efficiencies you're seeing on the direct marketing side because of all the brand rationalization efforts and things you have done in the last couple of years. You know, it's kind of easy to see the fixed cost savings, but given the moving pieces of the business, you know, particularly due to geographical mix and product mix, it's a little bit kind of tricky to see the direct marketing efficiencies that you're seeing. So maybe you can qualitatively touch on that. That'd be great.

On the direct marketing side because of all the brand rationalization efforts and things you have done in the last couple of years.

It's kind of easy to see the fixed cost savings, but given the moving pieces of the business, particularly due to geographical mix and product mix, it's a little bit tricky to see the direct marketing efficiencies that you're seeing so maybe you can qualitatively touch on that that'd be great.

Thanks, Steve.

Speaker 1: I'm glad you find it tricky too. We also do, given everything that's moving around. And as I mentioned, it's one of the challenges in trying to quantify for you or anyone or ourselves exactly how much progress we've made in terms of marketing efficiencies because the traffic patterns are so volatile.

I'm glad you find the tricky too we also given everything that's moving around and as I mentioned, it's one of the challenges in.

Trying to quantify for you or anyone ourselves exactly how much progress we've made in terms of marketing efficiencies because the traffic patterns are so volatile.

Speaker 1: mixes is so different, etc. You know, I mean, you just take something like air as an example, the air market has changed considerably. It's largely domestic, very little relatively international. We've historically been strong in international.

Mix is so different et cetera.

He just takes something like air as an example, the air market has changed considerably largely domestic very little relatively international we've historically been strong in international.

Speaker 1: We've improved how we're approaching it, as you say, across our brands. We've consolidated spend.

We have improved how we're approaching it as you say across our brands with consolidated spend.

Speaker 1: learned a lot about the multi-brand approach, but it hasn't really paid off yet in, for example, international air, because there's just not much of it. So the short answer is,

Learned a lot about the multi brand approach and.

But it hasnt really paid off yet in for example international Eric because theres just not much of it so the <unk>.

Short answer is.

We've made huge amount of August as I said in terms of tools in terms of data in terms of insights in terms of.

Speaker 1: We've made a huge amount of progress, as I said, in terms of tools, in terms of data, in terms of insights, in terms of being able to test and learn across a much broader swath of our enterprise. But being able to quantify really how much better it is...

Being able to test and learn across a much broader swath of our enterprise.

But.

Being able to quantify really how much better it is.

Speaker 1: in basis points or something that would give you, you know, a projectable marketing efficiency is still very challenging. We believe it's much better. We believe we are in a much better position to capitalize on the future state of normalcy.

Is it.

Basis points or something that would give you.

<unk> marketing efficiency is still very challenging we believe it's much better, but we are much better positioned to capitalize on the future state of normalcy, but.

Speaker 1: question the tools and the capabilities are in a much better place, but we have to pay that off and demonstrate it to the world and ourselves and it's in process but it's going. So I think you know we feel very good but we acknowledge it's difficult for you all to see it and we're just gonna have to wait for things to normalize so you can see the best.

There's no question the tools and the capabilities are in a much better place, but we have to pay that off and demonstrated to the world than ourselves and it's in process, but it's gone. So I think we feel very good but we acknowledge it's difficult for you all to see it and we're just going have to wait for things to normalize you can see the benefit.

Speaker 5: Thanks for the question, Deepak. I'll take the first part of it around the hiring plan, and I'm going to expand your question so it's just more overall from an overhead perspective.

And I'll take that thanks for the question Deepak ill take the first part of her on the hiring plan and I'm going to expand your question such as more overall from an overhead perspective.

Speaker 5: And just perhaps help a bit on some of the moving parts as you look into next year to help you model it out. I think first off, in Q4 where we were a bit lighter on expected people costs, we do have plans to continue hiring.

And just perhaps help a bit on some of the moving parts as you look into next year to help you model. It out I think first off in Q4, where we were a bit lighter unexpected people costs. We do have plans to continue hiring around some of our initiatives as we go into next year I don't really want to if you recall that we have.

Speaker 5: around some of our initiatives as we go into the next year. That would be one. Two is, do recall that we had one month of agencia in Q4, so that's something that you would want to model out, which I discussed in my remarks.

One month of Genocea.

In Q4, so that was something that you would want to model out, which I discussed in my remarks, our T&D discretionary et cetera continues to be lower than once we start getting back into.

Speaker 5: Our T&E, discretionary, etc., continues to be lower than once we start getting back.

Speaker 5: normal business travel and whatever form or shape that takes, etc. going forward. On your question on wage inflation, as mentioned earlier, I do expect that we will have higher-than-expected compensation increases this year. And again, as a reminder, those will go in on April 1st.

Into normal business travel and whatever whatever former shape that takes et cetera going forward on your question on wage inflation as I mentioned earlier I do expect that we will have higher than expected compensation increases this year and again as a reminder, this will go in.

<unk>.

Speaker 5: And as we talked about on previous calls, there are some investments that we are making in the business. We are excited about a number of different opportunities to accelerate the growth in a number of different areas. Of course, we're being prudent, very positive ROIs. We're going to track those relentlessly along the way, but that could increase overhead to a certain extent as well. Hopefully that helps.

And as we've talked about on previous calls there are some investments that we are making in the business. We are excited about a number of different opportunities to accelerate the growth in a number of different areas of course, we're being prudently very positive rois.

Track this relentlessly along the way, but that could increase rent to a certain extent as Bob.

Okay that helps you.

Great. Thank you so much.

Thank you.

Speaker 3: Our next question today comes from Stephen Drew from Credit Suisse. Stephen please go ahead.

Our next question today comes from Stephen Ju from Credit Suisse from Stephens. Please go ahead.

Speaker 2: Okay, thank you. So I think it's been some time since we've seen these types of metrics, but anything you can share in terms of what percent of the verbal inventory has now been integrated into Brand Expedia and the other outlets? I mean, ultimately, I think you want to present the traveler with more choice and improve the overall shopping experience. And I think the last time we talked about this, you guys are still kind of in the experimental phase and trying to see how much of a better shopping experience you could drive. But sort of any sort of perspective on that would be helpful. Thank you.

Okay. Thank you so.

It's been sometime since we've seen these types of metrics, but.

Anything you can share in terms of what percent of the verbal inventory has now been integrated into brand Expedia. The other outlets I mean ultimately.

Guy you want to present, the traveler with more choice and improve the overall shopping experience. So I think the last time, we talked about this.

Guys are still kind of an experimental stage and trying to see.

How much of a better shopping experience you could drive, but sort of any sort of perspective on that would be helpful. Thanks.

Yeah sure. Thanks, Steven I would say we are still building to it it is a core part of our plan.

Speaker 1: Yeah, sure. Thanks, Stephen. I would say we are still building to it. It is a core part of our plan. And by the way, it's not simply so that we can provide it to our own travelers. It's also so that we can provide it to our B2B partners so that they can provide it to their travelers. So it's a quite interesting and substantial opportunity, we believe.

And by the way, it's not simply so that we can provide it to our own.

Robert It's also so that we can provide to our partners. So that they can provide their travelers. So it's.

It's a quite interesting and substantial opportunity we believe.

We do have an integrated it's not a great integration, but we do have it integrated into Expedia.

Speaker 1: do have it integrated. It's not a great integration, but we do have it integrated into Expedia and Hotels.com. The issue has been it only works, among other things, not being a great product experience is what the main thing we have to fix, but also it does not have an approach that works for

In hotels Dot com.

Issue has been that only works among other things not being a great product experiences.

Main thing we have to fix but also it does not have an approach that works for us.

Speaker 1: properties that you have to reserve and then we have to, they're not instant book the ones where we have to go to the owners and see if they are okay.

The properties that you have to reserve and then we have to Theyre not instant book the ones, where we have to go to the owners and see if they are okay for the booking that.

Speaker 1: That is a construct that is not part of what is currently possible in the Expedia brand or

As a construct that is not part of what is currently possible in the Expedia brand or the hotels dot com brand et cetera. So it's kind of a two part thing one is we want to improve the product experience for the travel or make it a better integration make it easier to book makes it makes the content more useful easier to easier to understand.

Speaker 1: hotel.com brand, etc. So it's kind of a two-part thing. One is we want to improve the product experience for the traveler, make it a better integration, make it easier to book, make the content more usable, easier to understand so the travelers can make the decisions. And then we want to expand the universe of...

And so the travelers can make the decisions and then we want to expand the universe.

Speaker 1: properties that can be available through those pipes and that is where another big expansion and the idea comes. Those are both in the works. It will take some time.

The type of properties that can be available through those pipes and that is really where the big where another big expansion and the idea is those are both in the works. They will take some time I would say, they're not our highest priority, but they're far from our lowest price they are big.

Speaker 1: I would say they're not our highest priority, but they're far from our lowest priority. They're a big, important thing. And we have teams working on it, and we will.

Big important thing and we have teams working on it and we will.

Speaker 1: We expect to continue to see improvement. We have a lot happening on the front end of the product this year in terms of integrating a number of our brands to the same front end rails and a lot of opportunity to improve those experiences and roll out a new app construct, et cetera. So all of those things, you have to obviously, an order of operations question, but as those things roll out, this experience will get better and better and we believe.

We expect to continue to see improvement we have a lot happening on the front end of their product this year in terms of.

<unk> a number of our brands through the same front end rails.

A lot of opportunity to improve those experiences and rollout of new app construct et cetera. So all of those things you have to.

Obviously.

The order of operations question, but as those things roll out this experience will get better and better and we believe will become.

Bigger feature of the business.

Thank you.

Speaker 3: Our next question comes from Mario Liu from Barclays. Mario, please go ahead.

Our next question comes from Mario Lu from Barclays. Mario. Please go ahead.

Speaker 7: Great, thanks for taking a question. First one's on cancellation rates. I believe the lodging numbers you provided earlier was set as well. So just curious, was it much higher in 4Q and early in 1Q due to Omicron? And if so, do you think those that canceled could potentially be a tailwind to future bookings?

Great. Thanks for taking the question.

On the cancellation rate.

We believe the margin numbers you provided earlier with that at all.

So just curious.

Was it much higher in fourth Q.

Early in one case omnipod in.

Do you think those that cancel potentially be a tailwind.

Bookings.

On cancellation rates.

Speaker 5: As you read more in the newspaper, generally the cancellation rates go up. So yes, we saw cancellation rates go up, and particularly the December time period in the early part of January .

As you read more in the newspaper generally the cancellation rates go up.

So yes, we saw a cancellation rates go up and particularly the December time period in the early part of January .

Speaker 5: was impacting the businesses so people didn't necessarily feel safe and comfortable traveling and we certainly saw cancellations increase. If I extend to a longer period of time, obviously if you go back to 2020, cancellation rates went up exceedingly. They were coming down over time, still elevated relative to historical levels.

A promise what's impacting the businesses so people didn't necessarily feel safe and comfortable traveling and we certainly saw cancellations increase.

I extend to a longer period of time, obviously, if you go back to 2020 cancellation rates went up exceedingly they were coming down over time still elevated relative to historical levels.

Again safety concern cheaper gone down the covenant individually and can't travel or whatever else I guess saw a spike up in December and then coming back down again following a similar path to what I was just mentioning.

Speaker 5: safety concerns, people come down with COVID individually, can't travel, whatever else again, saw a spike up in December and then coming back down again following a similar path.

Yeah.

On a tailwind on future bookings I think you are asking.

Speaker 5: On the tail end of future bookings, I think you're asking the level of pent-up demand or how many people would postpone.

The level of pent up demand or how many people at best possible. They rebook.

Speaker 5: Will they rebook if they cancel? I think that's hard to tell, but I would say just generally speaking, and I think everyone feels in a similar way, which is when people can travel, they are going to travel and they're going to travel quite consistently throughout the year if they're able to do so, maybe more than they have in the past to rebook, if you will, but only time will tell, but I would say we're certainly

Will they rebook if they cancel.

I think thats hard to tell.

I would say just generally speaking and I think everyone feels in a similar way which is.

When people can't travel and they are going to travel and they are going to travel quite consistently throughout the year. If they are able to do so maybe more than they have in the past pre book if you will.

Time will tell but I would say, we're certainly optimistic.

Great and then just second question in terms of the remote work.

Speaker 7: Great. And then just second question in terms of remote work and, you know, longer duration stays for lodging by the business. Have you guys seen that kind of drive bookings already at Verbo or even the core business? And then, you know, how long is the opportunity do you think that is in the long term?

No longer duration state.

Lodging business.

Have you guys seen that kind of drive bookings already after a bottleneck or even our core business.

And then how long is that there's an opportunity or do you think that is in the long term.

Speaker 1: Yeah, this hasn't been a big thing for us. You've probably noticed on our calls. I know some others have a different view of that. It's an interesting thesis, and certainly, as people have more flexibility to travel.

Yeah. This hasn't been a big theme for US you probably noticed on our calls I know some others have a different view of that.

It's an interesting thesis and certainly.

As people have more flexibility to travel.

Speaker 1: We hope they fill up their flexible time with travel. In terms of Vrbo, we haven't quite seen the distortion. We've heard others talk about in terms of long stays or things like that. It's moved somewhat, but it's not.

We hope they fill up their flexible time with travel.

In terms of <unk>, we havent quite seen that.

The source and we've heard others talk about in terms of.

Long stays or things like that it's moved somewhat but its not.

Speaker 1: not as noticeable for us. I think it's an interesting and good potential tailwind if people have more time to travel.

It's not as noticeable for us.

And.

And I think it's a I think it's an interesting and good potential tailwind if people have more time to travel.

Speaker 1: But, you know, we'll see. We'll see when people get back to work. We'll see, you know, with schools back in, et cetera, how much flexibility everybody gets. We don't think it matters. We think there's tons of pent-up demand, as Eric says. And if there's more days to be away, terrific. You know, that will be good for us. And I think that will be selective, but a good general trend on some portion of society.

But we'll see we'll see when people get back to work, we'll see with schools back in et cetera, how much flexibility everybody. Yes, we don't think it matters, we think theres tons of pent up demand.

As Eric says and.

There's more days to be away terrific that that would be good for us and I think that we'll be selective but a good general trend on some portion of society and we're looking forward to that.

Great. Thank you.

Yes.

Speaker 3: Our next question comes from James Lee from Mizzouho. James, please go ahead.

Our next question comes from James Lee from Mizuho.

James Please go ahead.

Speaker 7: Great. Thanks for taking my questions. So it looks like everybody's expecting normalized travel trends with a makeshift to urban and international markets.

Great. Thanks for taking my questions. So it looks like everybody is expecting normalized travel trends with the mix shift to urban and international markets.

Speaker 7: And Peter, I was hoping you could comment on this. If home accommodation continues to gain traction in urban markets, how do you feel about your supply and verbal? Any plans to increase ahead of demand? And I guess my second question relating to maybe additional levers in improving efficiency. I know you guys may have talked about this in the past. Will you consider consolidating all your hotel brands under Expedia? Thanks.

And Peter I was hoping you could comment on if Homelink Commendation continue gain traction urban markets. How do you feel about your supply and verbal Annie.

Any plans to increase ahead of demand.

Yes, My second question relating to maybe additional levers and improving efficiency.

I know you guys have talked about this in the past would you consider.

Solid bidding all Youll hotel brands onto Expedia. Thanks.

Yeah.

Speaker 1: Thanks, James, appreciate the question.

Thanks, James I appreciate the question.

Questions.

I think.

Speaker 1: On the first question, which is, you know, supply in major cities for Burbo,

On the first question.

Which is supply in major cities four per Boe.

Speaker 1: You know, it's never been a great shot of ours. It's never been a huge focus of ours. We do have some in some big international cities.

It's never been a great strength of ours, it's never been a huge focus of ours.

We do have some and some big international cities again, I think much less for the one night stay kind of thing and much more for the.

Speaker 1: Again, I think much less for the 1 night stay kind of thing and much more for the family vacation and that sort of thing. We think there's opportunity there and we will continue to follow the demand trends. And as I mentioned, we've been. Focused on not just sort of.

Family vacation and that sort of thing.

We think theres opportunity there and we will continue to follow the demand trends and as I've mentioned, we've been focused on not just sort of buying supply across the universe, and everything and really being much more targeted and where the demand where the demand is and where we can get return for the homeowner.

Speaker 1: buying supply across the universe in everything and really being much more targeted and where

Speaker 1: where the demand is and where we can get return for the homeowner. So, you know, we'll continue to do that. But, you know, Vrbo is not.

So we'll continue to do that but.

<unk> is not in the same way like some of the other choices focus on being a replacement for hotels in cities. We have a lot of great Hotel partners in all the major cities of the World and we see them coming back more strongly and we think that's where the business is going to be for now of course, we want to continue to expand verboten wherever it makes sense and then we'll certainly look.

Speaker 1: same way like some of the other choices focused on being a replacement for hotels in cities. We have a lot of great hotel partners in all the major cities of the world and we see them coming back more strongly and we think that's where the business is going to be for now. Of course we want to continue to expand Vrbo wherever it makes sense and then we'll certainly look at cities.

Cities.

It makes sense.

Speaker 1: As far as the brands, I would say this, it's on the brand team to figure out the best way to consolidate the brand.

As far as the brands I would say this is on the brand team to figure out the best way to consolidated brands.

Speaker 1: in a construct that makes sense for the traveler. This isn't a construct that makes sense for us or we think is cool. It's about what makes sense to travelers, and why and how they need different products to do so.

In in a construct that makes sense for the traveler. This isn't a construct that makes sense for us or we think it's cool it's about what makes sense to travelers and why and how they need different products to do certain things if over time, we conclude that.

Speaker 1: If over time, we conclude that we need fewer brands, I'm not sure it will be all under one, but we may conclude we need fewer or certainly that we're going to lean into fewer. If that makes sense, we will do that. But that's what the brand team is working on now.

We need fewer brands I'm not sure it will be all under one but we may conclude we need fewer or certainly that we're going to lean into fewer if that makes sense, we will do that but that's what the brand team is working on now.

Speaker 1: We've got new brand propositions for all our major brands.

Got new brand propositions for all our major brands are rolling out soon and.

Speaker 1: rolling out soon, and I think over time we will figure out what is right for the traveler. And certainly as we integrate our loyalty programs, it is going to bring the brands much closer together and put us in a much more simplified position to decide

And I think over time, we will figure out what is right for the traveler and certainly as we integrate our loyalty programs is going to bring the brand is much closer together and put us in a much more.

More simplified position to decide whether fewer makes sense et cetera, and have everybody still caught up in our web of loyalty and all the good thing good things and good products, we bring to the market.

Speaker 1: fewer make sense, et cetera, and have everybody still caught up in our web of loyalty and all the good things and good products we bring to the market.

Great. Thank you.

You bet.

Our next question comes from Jed Kelly from Oppenheimer. Okay. Jed Your line is open.

Speaker 3: Our next question comes from Jed Kelly from Oppenheimer & Co. Jed, your line is open.

Speaker 9: Hey, great, great. Thanks for for for getting me on and nice work over the last 20 months.

Hey, great great. Thanks for getting me on.

Nice work over the last 20 months.

Just two questions if I may.

Speaker 9: Just two questions, if I may. Just how should we view Expedia relative to the Google risk going into 22, which is looking like a nice demand environment, relative to 2019? And then, Peter, you talked about you really can see nice margin expansion longer term for Expedia. Do you have a long-term margin target you guys are kind of shooting for, above 25%, 30%? Can you help us there as well? Thank you.

Just how should we view.

<unk> relative to the Google risk going into 'twenty, two which is looking like a nice demand environment relative to 2019, and then Peter you talked about.

You really can see nice margin expansion longer term.

For Expedia do you have like a long term market margin target you guys are kind of shooting for about 25%, 30% can you help us there as well thank you.

Speaker 1: Yeah, thanks. Those numbers sound pretty good, but I would say this. We don't have a number. And that is because candidly we are getting smarter about what is possible as we continue to roll out unified technology, unified solutions.

Yes, those numbers down pretty good.

I would say this we don't have a number.

And that is because candidly we are getting smarter about what is possible as we continue to rollout unified technology.

Unified solutions, we don't yet know the quantum of benefit that you get in conversion and other things that allow you to be more efficient on the marketing side because the product is working better there's a lot to learn I mean, I know you've all looked at the competition that tried it referenced that but I think look we believe all of these pieces.

Speaker 1: We don't get no, you know, the quantum of benefit that you get in conversion and other things that allow you to be more efficient on the marketing side because the product is working better. There's a lot to learn. I mean, I know you've all looked at the competition and try to reference that, but I think, look, we believe all of these pieces add up to benefits that drive more growth and higher markets and that's what we're focused on. So as the product improves, that's the underlying technology platform.

Add up to benefits that drive more growth and higher margins and that's what we're focused on so as the product improves as the underlying technology platform improve as that service more partners et cetera.

Speaker 1: as that serves more partners, etc., all of those things get better and scale brings efficiency. So I think we're just going to continue to drive it. It's in our core now to continue to drive it and I hope those numbers are achievable.

All of those things get better in <unk> and <unk>.

<unk> brings efficiency, so I think.

We're just going to continue to drive it.

And our core now to continue to drive it.

And I hope I hope those numbers are achievable.

When we get there we get there so I don't think its about putting some random number that we're guessing at what is possible out there I think we're just driving it.

Speaker 1: we get there, we get there. So I don't think it's about putting some random number that we're guessing at what's possible out there. I think we're just gonna be driving it as far the Google risk goes.

As far as the Google risk goes.

Maybe.

Speaker 1: I'm saying, but I don't consider it a Google risk. Google is Google. We operate in that market. We do everything we can to optimize that market. We work closely with them to try to figure out better ways.

I'm, saying, but I don't consider it a Google risk Google Google we operate in that market. We do everything we can optimize that market will be more closely with them to try to figure out better ways to optimize that Mark you know we have we think some interesting ideas percolating at the moment.

Speaker 1: You know, we have, we think, some interesting ideas percolating at the moment, but ultimately, as I alluded to, when we pull all those people out of the Google market, we have not done

But ultimately as I alluded to when we pull all of those people out of the Google market, we have not done.

Speaker 1: sufficiently good job of retaining those travelers as long-term customers and that's on us because of the product, because of competitiveness, because of all kinds of...

Sufficiently good job of retaining those travelers as long term customers.

That's on us because of the product because of competitiveness because of all kinds of things and.

Speaker 1: And we are literally addressing all of those things at once. I believe that each of them multiply on each other and make us collectively stickier, between a better product and better loyalty and broader loyalty and better...

We are literally addressing all of those things at once.

I believe that each of them multiply on each other and make us collectively stickier.

Between a better product and better loyalty and broader loyalty in that are.

Better marketing and that helps us travel around understanding the benefits, we provide and getting them to enjoy the benefits we provide more readily et cetera. So I think.

Speaker 1: better marketing that helps the traveler understand the benefits we provide and getting them to enjoy the benefits we provide more readily etc. So I think you know we believe that

We believe that.

Speaker 1: Google's going to stay Google. I always say, you know, Google's a shark. You should expect a shark to be a shark. It will keep doing what it does. We operate in their marketplace. And we have to do our part of optimizing their marketplace. We have a lot of room to do better. And that's what we're focused on. And I'm pretty sure they don't want to be in a business taking service calls and dealing with travelers and actually being a customer company. They just want to be a search engine. So I think we're in a pretty good spot.

Google is going to stay Google I always say you know Google has a sharp you should expect a sharp sharp.

We'll keep doing what it does we operate in their marketplace.

And we have to do our part of optimizing their marketplace. We have a lot of room to do better and.

And that's what we're focused on.

And I'm pretty sure they don't want to be in the business of taking service calls and dealing with travelers and actually being a customer company. They just want to be a search engine. So.

So I think we're in a pretty good spot.

Thank you.

Yep. Thanks.

Speaker 3: Our next question comes from Tom Champion from Piper Sandler. Tom, please go ahead.

Our next question comes from Tom Champion from Piper Sandler Please.

Please go ahead.

Yes.

Speaker 5: Hi Peter and Eric, good afternoon. I was wondering if I could ask a question around the new customer cohorts and I'm just curious whether they resemble pre-pandemic behavior or if you're seeing any new or divergent trends out of your...

Hi, Peter and Eric Good afternoon, I was wondering if I could ask a question around the new customer cohorts.

And I'm, just curious whether they resemble pre pandemic behavior.

Seeing any.

Newer or divergent trends.

Out of your.

Speaker 5: newer customers. And then maybe Eric, for you to ask the umpteenth question around margins, it looks to me like 4Q margins were up 300 basis points, give or take, over 2019. I'm just wondering if that's a good guidance for

Newer customers and then maybe Eric for you that Scott.

Scott the umpteenth question around around margins it looks to me like.

<unk> margins were up 300 basis points give or take over 2019, I'm just wondering if thats a good.

Good guidance for thinking about that.

Speaker 2: the margin potential for the next couple quarters, kind of the near-term outlook. Any thoughts around there would be really helpful.

The margin potential for the next couple of quarters to kind of the.

The near term outlook any any thoughts around there would be it would be really helpful.

Hey, John it's Peter.

Speaker 1: I'll go first. You know, in terms of cohorts, again, I think it would be a mistake to draw too much from anything that's going on right now to mention patterns and much different.

In terms of the cohorts again, I think it would be a mistake to draw too much from anything that's going on right now as I mentioned patterns are much different volatilities.

Speaker 1: Ebb and flow of cancellations and other things are much different. What we're working, we focused on is looking at cohorts in terms of engagement with the app. You know, how that changes as we make improvements in the product, et cetera. I think there we're seeing the directional things we hope to see. We have a lot, lot, lot, lot more to deliver. So it's early days. But our focus is really on that. I don't think we've seen any new patterns that are.

In flow of cancellations and other things are much different well, we're marking we focused on is looking at cohorts in terms of engagement with the app.

How that changes as we can make improvements in the product et cetera, I think there we're seeing the directional things we hope to see we have a lot more.

In order to deliver so it's early days, but.

But our focus is really on that I don't think we've seen any new patterns that are either alarmingly, good or bad in terms of how travelers ask how many of them go to.

Speaker 1: either alarmingly good or bad in terms of how travelers act, how many of them go to go onto the Google and MetaWorld versus Come Direct. I mean, direct, most travel companies benefited from a mix to direct, but that was only because there was less demand in the open seas. I think as...

<unk> gone to the Google on meta world versus come to rapidly direct most most travel companies benefited from mix to direct but that was only because there was less demand in the open seas.

I think as as demand.

Demand continues to rise.

Speaker 1: not really any reason to imagine that that would be greatly distorted except to be found.

Not really any reason to imagine that that would be greatly distorted except for the family.

Speaker 1: job of, again, getting travelers to the app, getting them locked into our ecosystem, getting them understanding the benefits. So that's what we're focused on, and I think anything else, frankly, it'd be wrong to draw any conclusions based on the volatile times we've been in, so we'll see as things normalize, but we'll let you know if we see events.

Do a good job of again getting travelers to the app getting them locked into our ecosystem getting them understand the benefits. So that's what we're focused on it.

I think anything else frankly, too it would be wrong to draw any conclusions based on the volatile times, we've been in so we'll see as things normalize, but let's see.

Great.

Speaker 5: Great, Tom. Thanks for the question on the margin side. I'm not going to go into specifics on the number of bits and one quarter versus another. But, you know, of course, we are pleased to see for 2021 standpoint, the margins that we did have relative to the volume where we were down 17% from last year.

Tom Thanks for the question on the margin side.

I'm not going to go into specifics on the number of bets in one quarter versus another but.

Of course, we are pleased to see Q.

Q4, 2021 standpoint.

The margins that we did have relative to the volume, where we were down 17% from a revenue standpoint.

2019.

Speaker 5: Keep it to numbers. So please, from that perspective, I guess a few things that I would.

EBIT numbers, so pleased from that perspective, I guess, a few things that I would.

Speaker 5: One, if there is significant seasonality in this business, so you have to look at Q1 versus Q2, Q3, and Q4, and that there's a significant different curve from a book and state basis book that's obviously driven by marketing and that expense, and then the state basis where the revenue is coming from.

Hershey's and consider what if there is significant seasonality in this business. So you have to look at.

Q1 versus Q2, three and four and that Theres, a significant significant different curve from a book and state basis book, just off obviously, driven by marketing and that expense and then the state basis, where that revenue comes from.

Speaker 5: So just make sure that you're keenly aware of that seasonality. I gave some information earlier around overhead and various components that you can model.

<unk> perspective, so just make sure that you are keenly aware of that seasonality.

Gave some information earlier around overhead and various components that you can model.

Speaker 5: to the business as well. And then two other quick comments is, on the margin, we are going to be aggressive from a marketing spend perspective, as we've talked many times in this call already. We are optimistic about this year and the return of travel, presuming nothing else comes out of left field, if you will. And we're gonna be aggressive and we're gonna spend into that recovery. And then lastly, I know we touched on a little bit earlier, but just from a variable cost perspective.

<unk>.

As well and then two other quick comments on the margin, yes, we are going to be aggressive from a marketing spend perspective, as we've talked many times on this call already.

We're optimistic about this year and number and the return of travel.

Presuming nothing else comes out of left field, if you will.

And we're going to be aggressive and we're going to spend into that recovery and then lastly, I know we touched on it a little bit earlier, but just from a variable cost perspective.

Speaker 5: We have every time there's one of these disruptions, there are long duration of calls with customers with complex issues to sort through. And our real cost savings associated with variable costs really can't be seen yet. We are increasingly using technology to solve customer or traveler problems.

Every time, there's a lot of these disruptions there.

Long duration of calls with customers with complex issues to sort through and are real.

Costs are cost savings associated with variable costs really can't be seen yet we are increasingly using technology to solve customer traveler problems.

Speaker 5: We're consistently using that technology and that's being clouded a bit because of those more challenging.

We're consistently using that technology, and that's been clouded a bit because of this more challenging coal volumes and so.

Speaker 5: And so I suspect that we'll see some of those babies come in as we get to a more normal period. Hopefully that helps you.

We will see some of those savings come in as we get into a more normal period, hopefully that helps you with your modeling.

Thanks for the comments.

Yeah.

Speaker 3: Our final question today comes from Richard Clark from Samford C Bernstein. Richard your line is open.

Our final question today comes from Richard Clarke from Sanford C. Bernstein, Richard Your line is open.

Speaker 10: Thanks very much for taking my question. So just a question running into the summer, I guess coming out of the financial crisis at 2009, Expedia and the other players probably benefited from a prolonged recovery, maybe too much supply relative demand. If this summer is very, very strong.

Thanks, very much for taking my question.

Just a question running into the summer I guess coming out of the financial crisis.

The Expedia and the other plant pretty benefited from a prolonged recovery maybe too much supply relative to demand. At this summary is very very strong and we have a lot of demand relative to supply do you see any danger.

Speaker 10: and we have a lot of demand relative to supply. Do you see any danger?

Speaker 10: that hotels or your private rentals, you know, play the platforms off against each other a little bit or look to other channels. And then second question, a little bit more simple, but in Q3, I think you talked about your marketing cost being quite high because of the Delta variant coming very late in the quarter. You could sort of say the same pattern happened here, you know, Omicron came quite late in the quarters. Has that distorted the marketing spend in the quarter at all with committed spend earlier on?

The hotel is only a private rental play the platforms off against each other a little battle or look to all the other.

Other channels.

Then second question.

A little bit more simple, but in Q3, I think you talked about your marketing costs being quite high because of the Delta variant coming very late in the quarter you could sort of say the same patent happened here omicron came quite late in the quarters is that distorted the marketing spend in the quarter a tool with committed spend on your own.

Speaker 1: I'll take the first one and Eric can cover the rest.

I'll take the first one and Eric can cover the.

And costs.

Speaker 1: costs. Um, thanks for the question, Richard. I would say,

Thanks for the question Richard I would say.

Speaker 1: You know, you could have made the same argument during COVID when there was compressed demand in a number of places.

You could have made the same argument during COVID-19 when there was compressed demand in a number of places.

Speaker 1: We did not see what you're alluding to in terms of.

We did not see what youre alluding to in terms of suppliers playing off I think as I said, we all have a common challenge we were all working together.

Speaker 1: fire is playing off. I think, as I said, we all had a common challenge. We were all working together.

Speaker 1: You know, for every hotel in Miami, there's another one in New York that was suffering. And many big chains, et cetera, own, you know, own hundreds of hotels across good and bad markets. And I think we're all in it together. As I said in my beginning remarks, we're in it to try to help them optimize their business.

For every hotel in Miami, there's another one in New York that was suffering.

Many big change et cetera.

<unk> of hotels across good and bad markets.

All of that together as I said in my beginning remarks, we're in it to try to help them optimize their business as much as optimizing the hours and I think there is definitely a shared sense of we can all build this better together so.

Speaker 1: much as optimizing hours and I think there is definitely a shared sense of...

Speaker 1: can all build this better together. So, you know, I think there will be a lot of

I think there will be a lot of demand there will be some compressed places.

Speaker 1: There will be some compressed places. I think there'll be enough places to go that the

I think there'll be enough places to go the demand worldwide.

Speaker 1: find an outlet. I think we provide unique services in terms of people being able to find things, discover where they want to go, find alternatives, etc., and provide a great value for our supply partners, including the many things we do for them beyond just allowing them to supply on our platform where we're the

Finding out that and I think.

I think we provide unique services in terms of people being able to find things discover where they want to go find alternatives et cetera, and provide a great value for our supplier partners, including the many things we do for them beyond just allowing them to supply on our platform, where we're their partners demand generation of other products or where technology et cetera.

Speaker 1: demand generation of other products or more technology, etc. So I think it's my sincere hope that our supply partnerships or our partnerships more generally are going to get bigger and broader and more beneficial to both sides over time.

So I think.

It is my sincere hope that that are our supplier partnerships or our partnerships more generally aren't going to get bigger and broader and more more beneficial to both sides overtime.

Speaker 1: This isn't going to be the classical fight for who's got a little leverage for the last nickel on a given day. So I don't think we'll see that. I think we'll see.

This isn't going to be the classical site for who has got a little leverage for the last to go on a given day so.

So I don't think we'll see that I think we will see.

Speaker 1: everybody trying to benefit from the upward trend and riding it together and you know that some of our partners will get their direct traffic, will get our direct traffic and everybody will do the best they can with those travelers.

Everybody is trying to benefit from the upward trend and riding it together and.

Some of our partners will get their direct traffic, we will get our direct traffic and everybody will do the best they can with those travelers.

That's what I expect and.

Speaker 5: And then Richard, on the second part of your question on marketing costs, we did see a similar dynamic this quarter as well, just given the Omicron impact towards the latter end of the quarter in December . Perhaps to a lesser extent, but again, a similar dynamic. And I would split it then into two components. The first is around performance marketing. Those are finely tuned machines that ultimately are driven by the underlying search demands, and whether that's across meta channels.

And then Richard on the second part of your question on marketing costs, we did see a similar dynamic this quarter as well just given oh micron impact towards the latter end of the quarter in December .

Perhaps to a lesser extent, but again a similar dynamic.

I'll split it into two components. The first is around performance marketing and those are finely tuned machine that ultimately are driven by the underlying search demands and.

Whether that's across many channels.

Speaker 5: or wherever else. And so as people stop searching for traffic and we're booking traffic, then the number of clicks and associated marketing expense naturally comes down with it. On the brand marketing side, we stayed the course in Q4 all the way through December .

Or wherever else and so as people stopped searching for traffic number of booking traffic and the number of clicks and associated marketing and expense naturally comes down with it on the brand marketing side. We stayed the course in Q4 through all the way through December .

Speaker 5: you are likely aware brand marketing spend becomes much more fixed as you get closer to the time of it being deployed. And then secondly, is we had a hypothesis.

So you are likely aware brand marketing spend becomes much more fixed as you get closer to the time at the and deploy it and then secondly, as we had a hypothesis is that for each variant that comes along the impact is going to be shorter and it's going to be shallower and thats. Ultimately what we have seen with <unk> that we effectively were impacted for us.

Speaker 5: that for each variant that comes along, the impact is going to be shorter and it's going to be shallower. And that's ultimately what we have seen with Omicron is that we effectively were impacted for approximately a month, maybe a little bit more than that, where it was more like two, two and a half months with the Delta variant. So we felt that we should continue to invest and perform it as it was there. We would go after the demand and we stayed the course on brand marketing.

Approximately a month, maybe a little bit more than that where it was more like two two and a half months with the Delta Varian. So we felt that we should continue to invest in performance. If it was there we could go after the demand and we stayed the course on brand marketing.

Very helpful. Thanks, very much.

Thank you.

Speaker 3: Those are all the questions we have time for today, so I'll now hand back to the management team for any concluding comments.

Those are all the questions. We have time for today I will now hand back to the management team for any concluding comments.

I guess I'll just say thank you for joining us I hope you all travel this summer.

Speaker 1: I guess I'll just say thank you for joining us. I hope you all travel this summer and you know where to find us if you need to travel. We'll talk to you next quarter. Thank you.

And where to find us if you need to go.

Next quarter. Thank you. Thank you everyone.

Speaker 3: Thank you everyone for joining us today. This concludes our call. Please disconnect your lines.

Thank you everyone for joining us today. This concludes our call. Please disconnect your lines.

Speaker 11: ?? ?? ??

Okay.

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