Q4 2021 Tripadvisor Inc Earnings Call

Thank you for standing by and welcome to the Tripadvisor fourth quarter and full year 2021 conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone as a reminder, today's program is being recorded.

I would now like to introduce your host for today's program Angela White, Vice President of Investor Relations. Please go ahead.

Jonathan Good morning, everyone and welcome to Tripadvisor fourth quarter and full year 2021 financial results call joining.

Joining me today are Steve Kaufer CEO .

CFO and chief Executive.

Before Chris.

Last night after market close we distributed and filed our earnings release and made available our shareholder letter on our Investor Relations website.

In the release, you'll find reconciliations of non-GAAP financial measures to most comparable GAAP measure.

This call also on our IR site.

Find supplemental financial information, which also includes reconciliations of certain non-GAAP financial measures discussed on this call as well as other metrics.

Why are we begin I'd like to remind you that this call may contain estimates and other forward looking statements that represent management's views as of today February 17 2012.

Chip if I, we disclaim any obligation to us.

Future events or circumstances, please refer to our earnings release as well as our filings with the SEC for information concerning factors.

Actual results to differ materially from these forward looking statements.

With that I'll turn the call over to Steve.

Thank you Angela and good morning, everyone.

We just finished our fiscal year and I'm pleased with our rate of recovery.

Back to this time last year things were still very uncertain vaccines were not available in many parts of the world We're still in lockdown.

Come a long way in its 2021 progressed, we saw tourism industry began its transition out of the pandemic.

Our results followed.

Across our segments, we exited the year in a much stronger position.

Throughout the year, we remain focused on our partners customers and travelers.

We continue to launch new products and improve the user experience for our travelers.

And just a few weeks ago, we hit a tremendous milestone a billion reviews and opinions.

Now all of this is a testament to our terrific teams across the globe in the brand that we've built the foundation of which is the trust and engagement from our travelers.

As we laid out in the shareholder letter, we believe that across our businesses, we are well positioned to execute our plans for 2022.

Provided updates on our key segments and areas of focus as we start the new year I hope you've had a chance to read through them.

One update that I did not provided in the shareholder letter was on the CEO transition.

I can share that the board continues to search for my successor.

And we will keep you updated as the journey continues.

In the meantime, I remained fully engaged and focused on driving business results innovation, our employees and our customers.

So with that I'll turn it over to <unk> before we take your questions.

Steve and thanks, everyone for joining we were pleased with our 2021 financial results and are positive about the setup for 2022, we started last year with revenue that was one third of pre pandemic levels, yet as the industry recovered in the second half of the year, we exited at 72% of pre pandemic levels in our Q4 results were slightly ahead of the.

Expectations, we communicated in December .

As we saw the topline returned in 2021, we also managed our costs appropriately maintaining fixed cost savings a reflection of the flexibility in our model as we balance future revenue opportunities with investment.

In this new year, we see some exciting areas, which we called out in the shareholder in the shareholder letter for example, our experiences offering continues to deliver high growth and we are expecting revenue for this line to be well above 2019 in 2022.

As discussed in the previous quarter, we are looking at multiple opportunities to crystallize value of of our experiences <unk> dining business.

An update this quarter is that we recently submitted a confidential S. One which along with other opportunities. We are evaluating in parallel puts us in a position for a potential sub IPO of <unk> subject of course to market conditions.

Our <unk> segment continues its recovery path and while still a transition year, we expect to show great progress in all our revenue lines in this segment as well in addition to meaningful year over year profitability increases we look forward in particular to catching up in our more upfront or <unk> products for hotels and media sales.

So in summary, we are very optimistic that consumer travel continues to transition back to full recovery in 2022 and that we are positioned to benefit from the return to travel in general and international travel a tripadvisor strength in particular.

With that let's jump into Q&A.

Certainly ladies and gentlemen, as a reminder, if you have a question. Please press Star then one our first question comes from the line of <unk> Khan from Truth Securities. Your question. Please.

Yes, hi, Thank you and good luck.

Just a couple of questions maybe.

On wire to or maybe could you guys maybe talk about some of the areas where you'll see some.

Low hanging opportunities, so I'm going to spend maybe you'll get the biggest ROI.

Roy and then in dining beyond the recovery that is expected to happen over the next 12 to 18 months from the recovery in <unk>.

And travel.

Nevertheless that you have to drive long term growth in this segment.

Yes. Thank you for the question.

Let's talk about experiences first experiences with.

It was a tremendously strong year in 2021.

And a very strong.

Return to pre pandemic levels.

In that business.

We saw.

It's traditionally in this business, we had very strong city <unk>.

Consumption of experiences strong international.

<unk> of experiences and last year.

The opening up of a very strong U S domestic business in parallel or in replacement in large part which was a business we haven't tapped into so much so.

We grew strongly domestic use cases of experiences.

<unk> in Florida the Canute.

The <unk> on the Colorado River, a helicopter tour in Hawaii and that drove very strong growth for US. We also as you as you alluded to.

Flexed, our marketing spend in this area are two very great very great effects, we were able to.

Get a lot more revenue by.

Stretching our our payback periods just a little.

And as this was a huge success. So we feel we've taken significant share.

In a market that were pre pandemic was growing at very high levels.

And we are positioned really well with our experienced business going forward.

<unk>.

There's various initiatives that you asked about that we have in place and levers that we have in this business.

We talked in our shareholder letter about one exciting new product, which we accelerated for our operators, which is called accelerate and this is an opportunity for operators to profile themselves more on the platform.

And this has created great results for us not only in bookings, but also in our take rate.

Other initiatives, we have really improved the quality of the products that we have the experience with products that we have and how we show them to our users a real focus on quality and showing only the best.

Experiences to our users which has resulted in great conversion gains.

The.

The last thing I would highlight is a strong focus on our app.

For <unk> we are.

Indexing on.

We are under indexing on our on our App usage, but have made great strides in developing that product.

Over the last year and see tremendous opportunity going forward one important feature of the experiences and shifting the experiences businesses is that increasingly consumers are one.

Investing in experiences rather than the place they stay or the travel to the place days day, especially with millennials, that's a huge huge trend.

Second important trend that we are seeing in tapping into is in increasing our flexibility to book experiences really while in destination and the App is a critical tool for us there and so we're investing significantly in our app capabilities on dining.

The levers that we have there is still increasing the penetration.

We are with the fork indexing heavily towards Europe , where European business with the <unk>.

And Europe is underpenetrated in terms of restaurant reservations compared to for instance, the United States and there is a lot of opportunity still to go penetrate.

Penetrated countries more deeply go to secondary tertiary cities and sign up restaurants there.

And to increase the user base that we have and the loyalty of the user base and those are all areas, where we invest another exciting area around dining is we're investing more towards more fintech type of applications.

We have launched.

Hi.

Payment option pork pay on the App to pay on the App for.

For your dinner when Youre in a restaurant integrated with the restaurant, which is a very exciting way of <unk>.

Creating stickiness and loyalty.

And then the other area, where we have invested in <unk>.

Gift cards.

Which allow us to further penetrate the market and leverage off the word of mouth of.

The great service that we provide so.

Levers are different differentiating towards more fintech product deeper.

Deeper penetration into into markets.

K, Germany markets, where we under index, we're investing in and so we have for both.

Both of those businesses are huge Tam ahead of us.

80% offline inexperienced there's still a huge Tam ahead of us and.

And we think the competitive position to really take advantage of this market and so we're bullish on both businesses.

As we are highlighted in our shareholder letter continue.

Continuing to invest in these businesses for long term value creation for <unk>.

Sure for Tripadvisor and its shareholders.

Got it.

A quick clarification on something you said earlier.

So.

The potential IPO exploring provides are.

With some of the options are not mutually exclusive.

Not necessarily how should we think about that.

Yes, we have a range of options, we're considering we announced today.

Yesterday evening that we have filed confidentially E&S one provide tour that puts us in a position to do a sub IPO as early as somewhere this year.

And Thats a great option to have we're also looking at other things in parallel.

Yes, some different some.

Consistent with it but this is one that we highlighted and is definitely an attractive option.

Great. Thank you.

Thank you. Our next question comes from the line of Richard Clarke from Bernstein. Your question. Please.

Thanks for taking my questions just first one on what you've been seeing for the last few weeks in terms of trends both for your experiences in dining annual hotels hotels business. Some of the other companies have compensated.

I'll make kronos kind of eased off.

Things are getting better and just maybe how you've reflected the last couple of weeks into your guidance for Q1.

Sure This is Steve.

Take this Richard we have seen in <unk>. Some of the comments that micron does seem to have eased off January .

December January were pretty tough in the travel industry I think everyone.

Has seen that and thats caused.

A material issue for what we would have hoped for in Q1.

<unk>.

We were reluctant to make many forward looking statements based upon.

Days or a week or two of data but.

We're certainly encouraged.

By what we see we look in the very recent past.

If you put it into context of what we said about the first quarter January clearly impacted by Amazon and we saw we saw December and January having having impact, but as Steve was highlighting trends are up February is looking much stronger.

And.

And that makes us makes us incrementally positive about about the year, but Q1 will be impacted by by that January impact but.

It seems it seems.

It seems to have been predicting a particular January issue in terms of specifically your question about experiences <unk> dining very strong performance there.

At the moment dining was significantly impacted also in January in Europe .

And that is clearly easing now into February .

And experience has experiences has been strong in February two so things are looking up in February .

Thanks, and if I could just ask one.

One follow up in your shareholder letter you mentioned youre, not just kind of put resources into experience of dining but it also means your core hotel and media offering is that a reference to the to the leaning into paid search or is there some more products investment going into those areas as well.

The total investment were making in HMP incrementally quite limited, we called that out in our shareholder letter.

There is some inflationary pressure on wages, and we're making some hires but by and large the increase in fixed cost is quite quite moderate, but we are shifting resources around within our portfolio there.

<unk>.

As we were waiting for the pandemic to come back we were.

We were focusing less with resources on Relaunching for instance R.

Our <unk> business and we are at.

Dressing that this year by shifting more resources towards that so theres more resources going to the core parts of the business that that will drive revenue in year.

Okay very helpful. Thank you.

Thank you. Our next question comes from the line of Jed Kelly from Oppenheimer. Your question. Please.

Hey, great. Thanks for taking my questions just circling back on experience as you mentioned, yes, it would be a.

Pretty strong share gains in the U S. Can you talk just regionally how your experiences business is doing.

Regions, including Europe and APAC.

And then just on the plus subscription I know last year, when you're first rolling it out it was a lot of discounting so has those $99 subscriptions renew.

How is that occurring or people churning off that or you are alerting people or can you just talk about how you're managing through the discounts that people received last year. Thank you.

Hey, Jed I'll take the first the first one on experiences.

Our experiences business, it's a global business and we have experiences in Europe , North America and in Asia Pacific.

Our audience our.

Points of sale have skew to two more English speaking so we're strong U S point of sale U K, Australia historically.

And Europe point of sale is as an opportunity for us where we were.

They still have a lot of room to grow on the POS side, what we saw last year in terms of trends was.

Where historically we had seen.

U S UK travelers, making city city trips and CD experiences.

Or and or make international trips the American going to do a call cm tour in Rome for instance.

We saw last year very strongly a shift towards the U S market in U S domestic consumption in Europe now coming back.

And so we have seen at the back end of the year and early this year.

Europe coming back and increasingly international travel coming back and so what makes us so.

So enthusiastic about our experiences business is that.

We captured this the.

Strong domestic U S business last last year, there will be to some extent some.

So move from domestic consumption to international consumption, but we also believe that we have really demonstrated that use case of domestic U S consumption to our users in a way that will be sticky.

This year, we're expecting an increasing.

Recovery of Europe as well as.

As well as international trips that our audience is making so all things that bode well in combination with the various improvements we're making to the product I highlighted some of those.

We're set up for us for a strong strong year.

And Jed I'll take the plus question so.

It's still pretty early days for us to get a good handle on kind of churn in redemption and you have to remember we werent fully rolled out at this time last year nor.

Nor would I counsel us or I do not read a lot into churn on the very first set of customers. The early adopters, who are the other industry folks who.

Who might signed up to try something.

Hi.

I would add that we don't view ourselves as having been dependent in our early set of customers on the discounts we did try discounting.

The $99 price in a variety of different matters, but I wouldn't.

Perfectly fair question, but I wouldn't particularly.

Worried that the discount level would be.

Sure.

A major factor in churn versus.

Usage over the course of the year.

Thank you and just a follow up when you talk about expanding bias towards non English speaking countries do you.

<unk> to grow organically or would you look at acquisitions.

Mostly organically, we have a strong footprint.

And it's not so much supply.

Supply growth.

So very strong supply in Europe .

The audience the points of sales in European countries, particularly Continental Europe .

We have under indexed for us and we think Thats still a growth opportunity that will tap into.

We'll do that with product and marketing not with with acquisitions necessarily.

Thank you.

Thank you. Our next question comes from the line of Lloyd Walmsley from UBS. Your question. Please.

Thanks, guys two if I can first.

The shareholder letter you mentioned experiences EBITDA being kind of like.

Mid to high <unk> range, historically, you've talked about the targets being hotel like so wondering if there was anything.

That change to kind of lower that target margin and then.

The letter also talks about revenue from free traffic recovering faster in 2022.

Is there any any changes to Google SCO, we should be keeping in mind or what is your plan in terms of brand advertising spend in 'twenty two.

Versus the past that we should think about.

For kind of traffic driving.

Yes.

I'll take the I'll take both questions Hey, Lloyd.

On the first one no.

Long term outlook for <unk>.

Isn't really changed we said mid to high <unk>, which we said in the past as well.

And that could go beyond that but that's sort of.

Intermediate long term goal the economics.

Both businesses are very healthy if you take experiences.

We have take rates in the mid twenties.

<unk> percent, which is very healthy.

Have a cost structure that is comparable to one of our hotel OTA business.

<unk>.

The the microeconomics on a consumer level are attractive as well, we see nice repeat rates.

In our user base et cetera, and so we think the economics are very healthy and so as.

As we compare ourselves.

To.

Hotel Otas in their development historically, we think that that those are the kind of margins that we can can target for this business long term.

And.

We are going to benefit we believe long term of being a market leader in that area on the restaurant side.

The economic model is slightly different more focused around.

Getting.

Getting a bounty seated diner from from restaurants.

And that's a business that can scale very nicely.

That model. We are currently investing in expansion markets I talked to you about that we are acquiring customers to repeat.

The repeat rates of customers that we acquire for our dining business are attractive and so generate a nice NPV and so we're building that base as we go forward and expect to see real leverage in that model going forward as well so.

So we feel that we feel good about the long term, but as we highlight in the near term we're more focused on.

Getting the growth.

And taking advantage of the Tam and our market position.

We're more focused on topline growth than on than on bottom line growth.

Your second question on free traffic.

Yes, we saw Independencia last year, and we've highlighted that in our core auction.

Thats, our pay traffic was growing faster than our free traffic or recovering faster than in free traffic.

Largely a function of.

Very healthy Cpc's that we've seen and we've called out, particularly in the U S, which is allow us to.

In our turn spend more on paid marketing channels on Google and other paid marketing channels.

And that has with still lower number of shoppers from free channels coming in because of the pandemic.

As shown a mix shift in our total portfolio towards more paid as the as the pandemic unwind and as we're getting closer to a more normal we expect to that balance to shift back to more historic levels.

And as such.

In this year in 2022, we expect fee revenue to grow ahead of pace.

Pay traffic in.

Get a not full but partial rebalancing towards towards the historical levels.

In terms of brand spend.

We have.

Some brand spend that we have been doing in the last.

Last year around the fork.

And.

Our bigger brand spend historically of course was in <unk>.

Tripadvisor. We currently don't have any plans to return to significant brand spend budgets for tripadvisor.

Okay and anything on SCO.

<unk> algo changes to be mindful of Orange.

This is Steve I.

I would say.

As you probably where there continued to be a set of changes Google continues to push pretty much everyone else further down in.

In the organic list, but I can't cite any.

Any big moves over the past quarter.

Okay. Thanks, guys.

Thank you. Our next question comes from the line of James Lee from Mizuho. Your question. Please.

Great. Thanks for taking my questions. A couple of questions follow up on trip plus I think on the shareholder letter you guys talk about not making.

Much progress.

Expected, maybe you can clarify that statement a little bit Steve is that in terms of supply or the benefits you're offering to consumers or the uptake on the membership and also curious what are your key focus.

Plus for 'twenty, two and also maybe help us understand a little bit of consumer behavior. I'm sure you guys done a lot of survey help us understand what the key reason people are not signing up for your service.

Sure. Thanks.

Thanks for the question so.

When I talk about kind of a plus not quite meeting our expectations we did.

Leave with the traffic and the brand trust and the number of folks that.

We're looking to plan their vacation on Tripadvisor that travel subscription would resonate faster than 2021.

Sure.

Yes, we had some supply challenges but.

We did some changes as you look on the site you can see some some pretty nice discounts.

Across the board in the markets that were rolled out at.

The biggest learning for us as we say, we're still hugely invested in making a travel subscription product work, but we have to recognize that at this point, we haven't found the product market fit that that we're looking for so.

As you pointed out we do our customer surveys focus groups one of the things that I can share is that high.

As we.

Get people down the purchase path for a hotel with the big savings.

Decision to.

Actually customers are telling us.

The decision to make this big hotel purchase while at the same time signing up for travel subscription service.

<unk> is perhaps a bit more of a load then then that customer is ready to.

Written to decide.

That makes some intuitive sense.

If you have a.

A big choice, where am I going to stay for my vacation to the expensive purchase and yes, you are saving real money.

But it's not just whether to buy a travel subscription it's whether this hotel is the right. One for you and so some of the things that we've been trying <unk> been presenting.

The opportunity to buy a travel subscription.

At different points.

I think it's fair to say, we have quite a few other things in the hopper that we look to.

Hi.

As we respond to this customer feedback that we've gotten where we look to find different ways to present the value proposition in a way that consumers will say, yes at a higher volume so.

2021.

The learnings is that we were too.

Too optimistic and the consumer uptake.

And we tried to share that in the shareholder letter with you.

With that we're still very excited about the prospects of the travel subscription based upon all of the trust and traffic and.

And capabilities that Tripadvisor has to offer.

Alright, Thanks, Steve if I can ask a follow up question regarding a new CEO search.

Previously you said you guys were looking for.

Potentially an executive with travel and tech background I was wondering any changes to your search criteria, you're expanding that just curious kind of where you are in the progress.

So I don't think theres been any change in job description. The board obviously for for very good and appropriate reasons wants to be thorough in their evaluation.

Given them.

Ability to be thorough with my timeframe of five.

Luke.

Find the ideal successor and then.

It could be a very smooth transition so I wouldn't read anything.

Into the lack of a candidate yet the searches have been going on for that long.

And the <unk>.

Criteria is still is.

Fantastic company with a tremendous brand and someone with the.

E Commerce travel all the things you mentioned.

Perfect.

Great. Thanks, Steve.

Thank you. Our next question comes from the line of Deepak <unk> from Wolfe Research. Your question. Please.

Thanks. This is zach on for Deepak just on buy it or as you explored various different options for the business.

How do you think about how important the kind of core tripadvisor platform is to the long term growth outlook for viator.

And then I appreciate the kind of mid to high 20% long term margin target for the A&D business is there any kind of meaningful difference between kind of the experiences and dining portions of those in terms of the long term margins are they meaningfully different or roughly the same.

Hey, Deepak.

In terms of the.

<unk>.

And the Tripadvisor point of sale.

Within our portfolio within <unk> portfolio of revenue.

The.

The by far the largest component of that revenue is the viator point of sale.

<unk> Dot com app.

Where people go to book directly book on Viator book experiences, that's the largest channel.

A significant but smaller channel is the tripadvisor point of sale.

<unk> is the fulfill air for Tripadvisor Tripadvisor as the sales channel for Viator. So someone can book on the on the Tripadvisor Dot com.

Appearance as well.

And that gets fulfilled by <unk> customer service gets done by <unk>, the <unk> the merchant of record.

Guess fulfilled through <unk>, but it's an important channel.

And then the third much smaller channel is.

Other third parties that integrates with it has.

A range of different arrangements.

With <unk>.

Attractive long term growth channel for us as well.

For Tripadvisor experience is an important strategic vector for tripadvisor to the brand.

Increasingly.

It becomes important for our travelers when they are in market to really look at.

And figure out what to do and what interesting things they can do.

The fact that we have <unk>.

As a company.

In our portfolio and later, perhaps with a more arm's length relationship is important for Tripadvisor brand and a strategic focus for Tripadvisor brand and.

<unk> advisor is has ambitious goals to grow its channel there and so.

<unk> will benefit from that in the future as well.

Okay.

In terms of your question to long term margin differences.

Both.

Both businesses are attractive long term have a long term profiles.

Highlight that what.

What I really like about the experiences profile is what Ive said in a very attractive take rate, which is compare it to the hotel industry very attractive.

With very similar economics in terms of.

The rollout of supply and marketing to users and so I believe that setup is.

As very attractive going forward in particular.

Does that answer your questions.

Yes. Thank you.

Thank you. Our next question comes from the line of Mario Lu from Barclays. Your question. Please.

Great. Thanks for taking the question.

In terms of.

Your views.

Getting to $1 billion.

We also announced earlier this morning.

Our new partnership with Pi.

Sure Yes.

The yield on its web site. So I was just wondering why.

Curt elaborate on this partnership and how this benefits trip.

And then to potentially in the future it could extend beyond that.

To better monetize each $1 billion externally. Thank you.

Sure so.

Obviously, clearly we're very proud of the billion reviews and opinions the testament to everyone coming back.

A reminder of the power of the network effects in our industry.

I believe the clinic relationships.

We're talking about is.

Our cruise critic subsidiary Repowering, the Cayenne cruise tabs.

Hi.

And what a great way for.

We're kayak to be able to expose crews to their users and for cruise critic.

Company or sub to be able to gain access to that.

Those additional customers when they might just be thinking about hey, how much does it cost to get to to Miami to take my cruise.

And you can offer more crews information includes critic powers. It so.

Thanks very much.

Strong company a lot of traffic perfectly good.

Notion of widens, our powerful together I'm not sure I would read too much into that to the rest of tripadvisor.

Got it.

Okay.

Thank you. Our next question comes from the line of Tom White from D. A Davidson your question. Please.

Great. Thanks for taking my question guys.

Two if I might I guess first you mentioned.

Shunt.

B to B subscription revenues, having a strong recovery in 2022 can you maybe just elaborate on that a bit is that kind of just more of a slow build due.

Due to the subscription nature of some of that stuff or are there any kind of new products or new AD formats that should move the needle.

And then on experiences can you maybe just share your view on.

How we should think about the long term competitive differentiation for you guys and experiences I think Airbnb said.

On their earnings call that they're going to kind of renew their focus on.

There their product in that space, but long term do you guys win or be one of the.

Long term stay one of the long term leaders to the supply breadth is it the.

Tumor experience is it.

Linking experiences up with other parts of trip like maybe plus stuff.

Stuff like that would be curious to hear your thoughts. Thanks.

Yes.

Tom The first question on our <unk> business, so in our shareholder letter.

A graph of our.

Tripadvisor other branded hotel revenue, which is.

Very largely the subscription business.

And its percentage to 2019 throughout 2021, and you see that compared to other parts of the business in that earlier in the pandemic. The business was doing relatively well as a percentage of 'twenty, one which is the nature of our subscription product and you see that.

As we were recovering.

About the business in 2021, you'll see that this line of the business recover some but not as fast and that is again the nature of the subscription business.

We also are.

We also are now currently aggressively rebuilding our sales force capability for this for this product of course.

We did not invest as much in Salesforce <unk>.

During the pandemic and we are rebuilding that right now to capture the recovery in 2022 that we expect but you are correct to point out to them that has a lag effect because if we sign up subscriptions. The revenue recognition of this well will be will be trailing trailing that so this is a business that will continue to be.

We'll have to snap back as fast.

Recovering travel market, but.

But we will believe.

We recover on a sales basis and as we move.

Further into the recovery will catch up on our revenue recognition basis as well.

Then in terms of experience as long term differentiation.

The way, we think about this marketplace there are going to be players like tripadvisor that target a integrated trip full trip and use experiences as an add on.

Two.

Two the overall marketing of a trip to their consumers.

We also believe that there is going to be room for a few pure play experiences providers like there have emerged.

Other verticals in travel.

And we believe that we are uniquely positioned with our <unk> brand to capture that pure play experiences hotelier space.

And.

There will be competition, but.

But we believe that we have a fantastic position to be positioned long term as a player and a differentiation that it becomes in the breadth of supply that we're aggregating.

We have about 300000.

<unk> products today.

Breadth of supply.

A differentiated way of marketing that to our users and just our brand recognition for that one place you go to if you really want to books and exciting experiences and Thats, where the space competitive space that we're capturing.

So we're playing it from both angles from that angle plus the more integrated.

Integrated play that we make with Tripadvisor and that combination we think.

Is going to be very differentiated.

Thank you guys.

Yeah.

Thank you and as a reminder, if you have a question at this time. Please press Star then one our next question comes from the line of John comment Tony from Jefferies. Your question. Please.

Thanks for taking my question.

I just wanted to ask about cost savings it sounds like youre expecting to obtain the majority of fixed cost savings and H, MMP, but reinvest fixed and variable cost savings and Andy.

Maybe you could just help outline out of the $240 billion in total cost savings, maybe just walk through what portion you are expecting to retain going forward versus spend back into growth initiatives.

Yes.

I think the additional <unk>.

Additional disclosure that we gave in our shareholder letter, which we believe will be helpful.

Is that we.

Split out our fixed cost and variable cost by segment and this.

Allows for better modeling for you analysts and investors.

And allows us to talk about the different trends, we see in different segments, because that's clearly what we're what we're seeing.

The $240 million of fixed cost.

<unk>.

Highlighted that within H M M P.

That was about $100 million of that was in <unk>.

And we're adding some back but it's very modest.

But inflationary press.

Pressure a bit of hiring sales force et cetera, but it's very modest and so.

Those savings by and large are very sticky.

We've also highlighted in the shareholder letter that about $90 million of costs.

It came out in our E&E.

<unk>.

And there we want to reinvest and we think the majority of that $90 million is going to be reinvested this year into product development.

Technology development capability of our of our supply organizations.

And all four.

Driving revenue in the year, but more importantly, positioning us well for the years to come in other the remaining fixed cost came out in sort of other.

We're making very minimal cost increases and so those savings are very sticky as well.

I hope that's helpful.

Yes very.

Helpful and one quick one on travel spend in the recovery travel spend.

Just wanted to clarify here do you anticipate spending for the full year will recover to pre pandemic levels.

Or is the expectation that at some point during the year, maybe in the second half spending will return to pre pandemic levels.

Yes, so we're bullish about 2022.

Obviously started in January with the impact from <unk>, but we expect to see.

The continuation to the the path to return to relatively normal travel levels, which started in 2021, we expect to continue in 2022.

And we assume a progressive return to pre pandemic levels.

Leisure travel market.

And we expect to be there some point this year.

Without putting a finer point on it so as a result, as we looked as a result of that statement as we look at our own business.

You would expect that our revenue recovery would would follow a similar similar patterns throughout the year and our EBITDA as we highlighted will be particularly will be second half weighted in the full year.

I appreciate the questions. Thank you.

Thank you. Our next question comes from the line of Dan, Let's Celiac from Morningstar. Your question. Please.

Good morning, guys. Thanks for taking the question so as I understand it one of the existing advantages for your experienced business is the ability to tap the cash generation from the core hotel platform for investment purposes.

Just was wondering regarding the potential sub IPO for biotech and you guys are considering is the thought that experiences would still be able to use the cash generation from the core hotel platform for future investment needs that decided to go that route.

My lawyers advised me not to be.

Pacific about.

What the IPO means and how to market the IPO.

But.

Let me just take the general part of the more independent structure independent financing of business would be that you would have independent financing.

Such a business.

Okay. That's fine understood and then just one more if I could so.

I guess the percent of.

Dining thats booked online I'm wondering if you can give or if you know like a penetration rate for that in the U S and Robert and then Europe , and then Thats It for me.

Yes, without putting a finer point on it is it is lower in in Europe .

In Europe in particular, a lot of dining is.

<unk> is done.

Offline reservations is offline.

And that is a market that we are tapping into getting people into the habit of grabbing the fork app to make their reservation booking and we do that.

Through driving a great service, but also we have marketing tools like our loyalty programs young points, we call them. We are increasingly integrating as I said with with payment capabilities on the app with gift cards, and so where we're creating that flywheel of of making <unk>.

And booking a habit, which were successful at and we think there's a long runway there in Europe .

Okay, great. Thanks, Scott.

Thank you. Our next question comes from the line of Brian Fitzgerald from Wells Fargo. Your question. Please.

Thanks, guys couple on Viator, everyone do parse apart the improved experience you've called out in the letter you mentioned supplier trust and quality standards, but you also said looking at payment flexibility access to customer service.

Are those things more a function of.

Just a larger base of suppliers as it culling off less performance supply is it new tools and innovation, maybe it's a bit of all three of those and then as.

As you contemplate the viator IPO or other alternatives might be premature to ask but wondering how you would plan to maintain the operational synergies you have between <unk> and the experiences business on trips.

Trips Pos.

Excellent questions.

The push over the last year has been much less on adding more supply we have very significant supply we had a.

A big job last independent make to reorient that supply that we have.

Towards the use case that was.

Much more relevant in the pandemic, which was the U S domestic use which was one area.

Other areas that we've been really focused on is how can we help the suppliers operators we call them how can we help these operators.

Profiled themselves better on Tripadvisor and in particular, how can we make.

Entrepreneurs and on Viator.

Can we make.

On Viator.

<unk>.

The experiences that we that we believe have the highest quality and the highest quality as they are exciting.

Can very clearly.

What the experience is and why it is an exciting experience.

Very clear.

A description of the of the experience we have privilege those and helped our suppliers to improve those products and thats been a huge help in conversion because it will not surprise you that.

Products that are of a higher standard on our sites.

Have much better conversion rates than products that are not so big focus on how do we help.

<unk> improved their content, but particularly how do we privilege the content on our site that is really high quality has been a big push.

I talked about the accelerate program, which we piloted throughout last year and are currently implementing with great success.

Which is.

Helping operators too.

Play with deliveries that they have at their disposal take rates that they give us for instance to better profiled themselves on.

On <unk> and <unk>.

That's been.

In our trials huge success and operators are very excited about that.

And we are rolling that out in 2022 with with upside upside there.

So those have been some of the important focus area I mentioned, the App, which is an important focus area as well so really the focus on and a huge runway, we think and how do we better present.

The use case and experiences other big focus area for us is.

How do we retain.

As many of the users so they come back and book again.

Booking on the same trip is a huge opportunity that we've been focused on so someone's already booked and experience and we know theyre traveling to a certain destination, how can we communicate with them. So.

You have a repeat purchase even on that same trip, but then beyond that how do we make people come back and how do we communicate with our users in a way that.

Stimulates that thats another important area of improvement.

In terms of the.

The operational synergies between <unk> and sort of core tripadvisor.

We are.

Currently set up with <unk>.

Different intact teams that operate.

<unk> and device business, which includes having tripadvisor as a as a merchant.

Customers are affiliate customer.

And Tripadvisor team, which is integrated with the total tripadvisor.

User experience and so we have already have separation of teams to a significant extent.

And.

<unk> businesses have a different go to market strategy for the experiences business and so we've already internally.

Internally carved out these businesses as separate separate businesses.

Got it thanks, Eric I appreciate it.

Thank you. Our next question comes from the line of Kevin Kopelman from Cowen Your question. Please.

Great. Thanks, a lot could you give us any more color on the <unk>.

Consolidated revenue recovery in February .

If you compare that to February 2019 have you gotten back to those kind of minus 30% type levels that we saw in October .

Sure.

I don't want to put.

A finer point on it than we have already done we've given you some indication of where we expect the quarter to net out but let me leave it with there has been a market improvement in February in the business from January January .

Across the board in our hotel auction.

In our dining business you can see from the graphs that we.

The dining business was already impacted in the fourth quarter by.

By Delta and <unk>.

Dining has proved to be maybe the most elastic of all our businesses too to any news or our actual COVID-19 cases and in 2020 in the summer of 2020 when the.

Covid cases.

So far our.

Our restaurant business roared back very quickly.

We've also seen on the reverse that with Covid cases, rising rising as they were strongly in Europe .

In the back half of the fourth quarter and in January in particular, we've seen the dining business.

Elastic impact and we see that elasticity right now in February as well, we see it we see the market.

Consumption come back very strongly again, so I want to leave it at.

Significant difference between January which was.

Significantly impacted across the board and now in February coming back and that has.

<unk>.

In the forward looking statement that we made about about the quarter.

Okay. Thanks, guys.

Thank you.

This concludes the question and answer session of today's program I'd like to hand, the program back to Stephen Kaufer for any further remarks.

Alright, well thank you everyone.

Thank you to our teams around the world, we're working tirelessly to help our fellow travelers are hospitality partners and everyone to navigate and find the bright stocks through the still uncertain periods.

As just mentioned we are seeing some nice signs in February .

But that's relatively recent we expect things to be coming back over the course of the year and to reiterate a nice recovery over the course of 2022.

We remain optimistic about the industry. The resilience, we have seen so far and in the boom that we expect over the course of the year.

Thank you very much and wish you a.

Good day.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Yeah.

[music].

[music].

[music].