Q4 2021 Travelzoo Earnings Call
Hello, everyone and welcome to the travel group fourth quarter 2021 financial results Conference call. All participants have been placed in a listen only mode and the floor will be opened for questions. Following the presentation. Today's call is being recorded the company would like to remind you that all <unk>.
Shipments made during this conference call.
And the present presented in these lines are not statements of historical facts.
Constitute forward pardon me the company would like me to remind you that all statements made during this conference call and presented in the slides that are not statements of historical facts constitute forward looking statements and are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095 actual results could vary materially.
From those contained in the forward looking statements factors that could cause actual results to differ materially from those in the forward. Looking statements are described in the company's forms 10-K, and 10-Q and other periodic filings with the SEC unless required by law. The company undertakes no obligation to update publicly any forward looking.
Whether as a result of new information future events or otherwise please refer to the company's website for important information, including the company's earnings press release issued earlier. This morning, an archive recording of this conference call will be made available on the <unk> Investor Relations website at travels <unk> dot.
Com Slash IR now it is my pleasure to turn the floor over to travel as soon as global CEO Holdco portal and its chief Accounting Officer, Lisa Lisa will start with an overview of the fourth quarter 2021 financial results.
Thank you operator.
And welcome to those of you joining us today.
Please open the management presentation to follow along with our prepared remarks.
The presentation in PDF format is available on our Investor Relations website at travel to your Dot Com Backflash IR.
Yeah.
Let's begin with slide number three.
Here you can see that our Q4 revenue was $14 1 million.
Up 13% from $12 5 million year over year.
Our operating loss in Q4 was $3 4 million due to the surge of the omicron variant.
And related increased safety measures and travel restrictions during Q4 2021.
Which resulted in a loss per share of <unk> 25.
We believe that this was a short term effect as many countries have recently started listing to COVID-19 related restrictions.
We saw a slight increase in members year over year from $30 2 million to $30 3 million.
On slide four we go into more details about our two more significant business segments, North America and Europe .
We are showing the revenue and operating income for the last three years for Q4.
Both of these segments had significant revenue decline in 2020, but are on the expected path of recovery.
Our North America business segment is that 53% of the 2019 levels and.
The operating loss is $2 2 million.
North American revenues and operating income or net as a cautionary increase in reserves.
Which in Q4 lowered our reported revenue and operating income by $1 6 million.
With Q4, 2021, showing 53% of Q4 2019 revenues our Europe business segment has now recovered to the same level as North America has with an operating loss of $1 2 million.
Which is an improvement from the $2 4 million loss in 2020.
On slide five we decided to provide information on our non-GAAP operating profit as we believe it better explains how travel to evaluate performance.
This slide shows the non-GAAP operating loss, which was $2 1 million.
Slide six provides details on the items that are excluded in the calculation of non-GAAP operating profit.
Or loss.
Please turn to slide seven.
As of December 31, 2021, consolidated cash cash equivalents and restricted cash were $45 million.
The cash balance reach the expected level as merchant payables decreased and receivables and deposits combined increased by $14 million in the transition of switching to a more efficient payment processor.
Slides eight and nine detail our revenues by business segment.
When neutralizing FX changes the North America business segment had a slight decline of 400000.
And the Europe business segment increased by almost $2 million year over year.
Compared to the prior year period, both revenue types of travel and local both ticked up as advertisers and partners have started coming back.
On slide nine you can see that during the pandemic, we have been able to lower our fixed costs.
We believe we can keep fixed costs relatively low in the foreseeable future.
While revenue is expected to grow.
We believe this should result in higher profitability going forward.
Looking forward, we currently expect substantially higher revenue and a return to profitability in Q1.
We continue to see a trend of recovery of our revenue.
However, there could be unexpected fluctuations in the short term.
Now ill turn it over to hilger.
Thanks Lisa.
So we expect the company.
The company's financial performance to really improve significantly improve in 2022.
We see more interest from travelers to members.
Activity levels are up and we know also that traveling and entertainment companies want to work with us.
The industry continues its recovery.
So as you see on slide 11.
We have over 30 million members.
$6 8 million mobile App users and 4 million followers on social media.
Really love by traveling with us.
Affluent active the travel quite a bit and they are open to new experiences.
Slide 13 shows you what we as a management team are focused on.
First.
We want to take advantage of the exceptional industry opportunity. During this time to provide our 13 million members with offers that are exclusive.
With festival in.
In the area of travel entertainment local offers and experiences.
We wanted to grow members in 2022 and accelerate revenue growth.
We will also put more focus on growing check flight club profitable subscription revenue.
And of course, we want to return to profitability and increased profitability.
If demand for travel returns as we're coming out of this pandemic so back to the operator and.
We're looking forward to questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.
First question comes from the line of Michael <unk> from Noble capital markets. Your question. Please.
Just a couple of questions here number one.
I know that you have $45 million in cash and when you look at merchant payables and so forth your liabilities look a little higher how do you plan to.
Reconcile the two balances there.
Lisa do you want to address this high Michael Hi.
So.
Michael we expect that we can fund.
Merchant payable amounts because we can.
Definitely grow our profits for 2022.
And a lot of the merchant payables go out until 2023, 2024, and even out to 2025.
And so they're more of a long term nature.
Gotcha.
And I know I went on a cruise last fall when there were only 473 people on a ship that had 6000 capacity so I'm not surprised that.
You had some issues in the.
The quarter, but I understand now that bookings are significantly higher and I've learned that bookings on cruise ships are dramatically even the pricing is going up significantly and I was just wondering if you can kind of give us a sense.
I know that you are talking about the first quarter and that revenue should be up nicely you had a pretty.
Easy comp in the first quarter of last year was just wondering if you can kind of add a little bit more color on the type of work.
First quarter.
You broke up a little bit there yes.
Yes, Mike Michael.
I would say since the end of January beginning of February things have improved quite.
Quite quite dramatically.
For sure.
We are seeing much more demand we are seeing more members booking with our partners.
Refunds have gone down quite a bit in February versus January . So, yes, we are quite optimistic budget authority March 3rd and with the world around us.
I'm hesitant to make any specific prediction as to how much higher Q1, this year will be versus a year ago.
At this time, we definitely expect that revenues will be quite a bit higher than last year.
And Cologuard can you tell me a little bit about Europe versus North America as you go into the first quarter.
Because of the geopolitical issues going on in Europe are you seeing.
Europe not rebound as much as North America at this point or can you kind of give us a flavor of.
The.
The rebound that you are seeing by North America versus Europe .
We see both we actually see optimism on both sides of the Atlantic in the U S and Canada.
In all the European countries that we're in.
One of the.
The last question.
Sales and marketing was a little bit higher than I expected.
I know that youre going to step that up.
Is that a variable cost to where you can pull that back if youre not seeing revenues kind of come in as strong as you expected or kind of give us a flavor of.
It just seems like it came in a little bit higher than what I was looking for any thoughts.
Well first there were a couple of extraordinary expenses in Q4 that will not repeat we didn't want to go into too much detail, but that drove it up a bit higher than what you expected and second you're absolutely right.
It's an expense item over which we have much more control over.
But we have actually increased.
And in Q1 because.
We are positive about revenues and we really want to grow members.
Sure.
Okay, great well, here's two or better.
Much improved 2022, thank you thank.
Thank you so much.
Thank you. Our next question comes from the line of Steve Silver from Argus Research. Your question. Please.
Great. Thanks.
Thanks for taking the question my question is more strategic in nature.
Given that prior to the pandemic you guys acquire Jack's flight club and throughout the pandemic you shifted the revenue mix towards vouchers to preserve cash flow.
So given the fact that the core business has been so disrupted by COVID-19, and now the potential for new geopolitical tension that may impact travel in Europe .
Trying to get a sense as to how youre thinking about any additional levers there might be available to you to continue to be proactive.
Less reliant on normalizing conditions.
Prior to the pandemic.
Yes.
Of course.
We know we acquired Czech Slide club at the time that was in the end a little bit.
Unfortunately beyond our control because right. After we acquired six light up the pandemic hit and there hasnt been a lot of interest.
In services to tell you about the deals that is changing so we really see 2020 towards.
As a great opportunity for check size up we never really hit that opportunity over the last two years as you might recall there primarily active in the U K and there's a big opportunity to expand into the U S. So that's the first one on the voucher side. The business is actually shifting quite a bit I would say in Q4.
That came from vouchers.
What's.
Much much much lower than it wasn't the previous quarter's advertising revenue was up across the board, we will continue to scale that.
This year, and then last but not least of course, we were.
Start experimenting a bit more on <unk>.
<unk> is a revenue opportunity in the area of subscription fees.
Great. Thank you so much for taking the question.
Thank you. Our next question comes from the line of Jim Goss from Barrington Research. Your question. Please.
Good morning.
Pat on for Jim.
I was just wanted to follow up on the past couple of questions on.
Europe I was just wondering if you could break out maybe your exposure just in general to Eastern Europe is kind of like a share of revenues.
I guess really more also unlike the merchant payables side for a second.
The advertising side, it can be kind of offset by other territories.
Sure I can speak about the first and then Keith can speak about.
Merchant payables.
Really the exposure to eastern Europe is very minimal excuse me last week one of <unk>.
For starters, we remove any trips and offer us.
Any trips and offers that included Russia.
Control websites and what I.
I was surprised there was not menu that you asked it was less than a handful.
Yes.
Also we don't operate in eastern Europe . So our members are in Europe . Our members is a UK Germany.
<unk> in France.
Other countries like Ross dress excellent, Italy, and so forth, but no one in eastern Europe . So.
On that side, we're not affected on the other hand, we actually just checked this morning, Christy if we are seeing more.
Cancellations or voucher refund, particularly familiar with members.
With out of what they are hearing about the war in Europe .
We are not seeing actually any changing trends.
The last seven days.
Refund rates, even decreased a little bit over the previous week. So I think people are still in a pattern we are waiting to see what happens.
So far we don't see that members.
It can be making changes to their travel plans.
And I would also echo that I would say that most of our merchant payables.
We didn't hear it.
No.
Haven't seen any pattern if redemption.
Yes.
At La.
Cause.
Turning to the company.
Okay.
And then on.
I guess just on the productivity of.
The employee base I was kind of wondering if you could maybe go into some of the.
I guess reasons for confidence that you can kind of keep the lower head count and operate more efficiently to drive.
Higher profitability.
Revenue if revenue trends continued to improve.
It is mainly a result of restructuring the business and focusing so we don't see as we said earlier, we don't see any big increases our fixed expenses this year versus where we were.
On the variable side.
Mike asked about it we plan to spend for it.
That's more in member acquisition.
But in general no.
As we are increasing our advertising rates and as more members.
Purchasing February again with our partners.
Sure.
The software platform and.
And revenue goes up it doesn't really affect the fixed cost fixed cost base.
Okay. Thank you.
Thank you. Our next question comes from the line of Ed Woo from <unk> capital. Your question. Please.
Yeah. Thanks for taking my question in terms of.
How do people feel about travel this coming summer do you think people are much more optimistic at omni kron is fading.
In general we see a trend that.
Members, our members and probably all consumers booking a little bit more closer to travel to that travel date. So.
Oh I can travel right now so let me go right now in the next two weeks.
In terms of response to office that we have for sophomore, yes, we see we see.
Overall, a good response, but that's also.
Related of course to.
Not just travel to offering the ability to cancel or refund is trips but.
The entire travel industry has really shifted towards <unk>.
Providing consumers big flexibility so.
So I am destination site should be coming over the quite crowded, but that's what's then.
Good about travel to we are telling our members about destinations that are not so crowded we are telling our members about that specific cruise ship that Michael was on we had only 600 passing shifts instead of 3000.
Today, we are telling our members in the U S to go to Madeira non.
Non stop flight that we have actually created exclusively for travelers to members together with a partner who can fly for the first time nonstop from New York to Madeira.
Thats a destination that a lot of our members didn't even think about.
Those who went on this flight in the last few months.
Our reporting that they had a wonderful time DSO, we are able to tell our members about new ideas new destinations and in that respect we to really great service for the travel industry that will shift demand from one destination that might be overcrowded to another one that might be less known and recreate these can be found.
Great and then my last question is bought on a hotel or.
Travel capacity, particularly hotels some of the labor shortages.
Are you seeing them improve enhancing hotels open up to a bigger capacity.
Yes, and no hotels up definitely.
Two sided story, where you'll see in some destinations.
In significantly higher hotel rates and.
Some hotels, even deliberately look I don't want to go over 70%, 75% occupancy rate that allow us to provide a good experience or philosophy to keep my hotel rates high in.
In these cases, it's a little bit tricky.
For us to find deals, but on the other hand, there is plenty of other destinations and hotels that just wish that the occupancy was at 70% 75%.
Sure.
I haven't heard much about labor shortage I think they are easing a bit more in the U S and Europe I don't think we hit that issue that much in the hotel industry.
But I would say overall.
Things are getting back more to normal profit the most normal I've seen since April 2021.
When does this whole pandemic started.
Thank you.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Mr. Hugo <unk> for any further remarks.
Yes, no no further remarks about the ladies and gentlemen, thank you so much for dialing in and for your time and support and.
We look forward to speaking with you again next quarter with.
Hopefully better numbers have a nice day.
Thank you ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time have a nice day.
Okay.
[music].
[music].
[music].
Hello, everyone and welcome to be Trampled group fourth quarter 2021 financial results Conference call. All participants have been placed in a listen only mode and the floor will be opened for questions. Following the presentation. Today's call is being recorded the company would like to remind you that all.
It's made during this conference call.
And the present presented in the slides are not statements of historical facts.
Constitute forward pardon me the company would like me to remind you that all statements made during this conference call and presented in the slides that are not statements of historical facts constitute forward looking statements and are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095 actual results could vary materially.
From those contained in the forward looking statements factors that could cause actual results to differ materially from those in the forward. Looking statements are described in the company's forms 10-K, and 10-Q and other periodic filings with the SEC unless required by law. The company undertakes no obligation to update publicly any forward looking.
Whether as a result of new information future events or otherwise please refer to the company's website for important information, including the company's earnings press release issued earlier. This morning, an archive recording of this conference call will be made available on the travel <unk> Investor Relations website at travel Zoo Dot.
Com Slash IR now it is my pleasure to turn the floor over to travel Xu as global CEO Hookup Hotel and its chief Accounting Officer, Lisa Su, Lisa will start with an overview of the fourth quarter 2021 financial results.
Thank you operator.
And welcome to those of you joining us today.
Please open the management presentation to follow along with our prepared remarks.
The presentation in PDF format is.
Available on our Investor Relations website at travel to your Dot Com Backslash I R.
Yeah.
Let's begin with slide number three.
Here you can see that our Q4 revenue was $14 1 million.
Up 13% from $12 5 million year over year.
Our operating loss in Q4 was $3 4 million due to the surge of the omicron variant.
And related increased safety measures and travel restrictions during Q4 2021 .
Which resulted in a loss per share of <unk> 25 sets.
We believe that this was a short term effect as many countries have recently started listing to COVID-19 related restrictions.
We saw a slight increase in members year over year from $30 2 million to $30 3 million.
On slide four we go into more details about our two more significant this is segments North America and Europe .
We are showing the revenue and operating income for the last three years for Q4.
Both of these segments had significant revenue decline in 2020, but are on the expected path of recovery.
Our North America business segment is that 53% of the 2019 levels and the operating loss is $2 2 million.
North America revenues and operating income or net of the cautionary increase in reserves.
Which in Q4 lowered our reported revenue and operating income by $1 6 million.
With Q4, 2021, showing 53% of Q4 2019 revenues our Europe business segment has now recovered to the same level as North America has with an operating loss of $1 2 million.
Which is an improvement from the $2 4 million loss in 2020.
Okay.
On slide five we decided to provide information on our non-GAAP operating profit as we believe it better explains how travel due to evaluate performance.
This slide shows the non-GAAP operating loss, which was $2 1 million.
Slide six provides details on the items that are excluded in the calculation of non-GAAP operating profit.
Or loss.
Yeah.
Please turn to slide seven.
As of December 31, 2021, consolidated cash cash equivalents and restricted cash were $45 million.
The cash balance reach the expected level as merchant payables decreased and receivables and deposits combined increased by $14 million in the transition of switching to a more efficient payment processor.
Slides eight and nine detail our revenues by business segment.
When neutralizing FX changes the North America business segment had a slight decline of 400000.
And the Europe business segment increased by almost $2 million year over year.
Compared to the prior year period, both revenue types of travel and local both ticked up as advertisers and partners have started coming back.
On slide nine you can see that during the pandemic, we have been able to lower our fixed costs.
We believe we can keep fixed costs relatively low in the foreseeable future while.
While revenue is expected to grow.
We believe this should result in higher profitability going forward.
Looking forward.
We currently expect substantially higher revenue and a return to profitability in Q1.
We continue to see a trend of recovery of our revenue.
However, there could be unexpected fluctuations in the short term.
Now I'll turn it over to <unk>.
Okay.
Thanks Lisa.
We expect the company.
The company's financial performance to really improve significantly improve in 2022.
We see more interest from travelers who members.
Activity levels are up and we know also that traveling and entertainment companies want to work with us.
As the industry continues its recovery.
So as you see on slide 11, we.
We have over 30 million members.
$6 8 million mobile App users and 4 million followers on social media.
We're really loved by traveling with us.
Affluent.
If the travel quite a bit and they are open to new experiences.
Slide 13 shows you what we as a management team are focused on.
First.
We wanted to take advantage of the exceptional industry opportunity. During this time to provide our 13 million members with offers that are exclusive.
It resistible indeed.
In the area of travel entertainment local offers and experiences.
We wanted to grow members in 2022 and accelerated revenue growth.
We will also put more focus on growing check slide blocks profitable subscription revenue.
And of course, we want to return to profitability and increased profitability.
If demand for travel returns as we're coming out of this pandemic so back to the operator and.
We're looking forward to questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes from the line of Michael <unk> from Noble capital markets. Your question. Please.
Just a couple of questions here number one.
I know that you have $45 million in cash and when you look at merchant payables and so forth your liabilities look a little higher how do you plan to.
Reconcile the two balances there.
Lisa do you want to address this high Michael Hi.
Alright.
Michael we expect that we can fund.
Merchant payable amounts because we can.
Definitely grow our profits for 2022.
And a lot of the merchant payables go out until 2023, 2024, and even out to 2025.
And so they're more of a long term nature.
Gotcha.
And I know I went on a cruise last fall when there were only 473 people on a ship that had 6000 capacity so I'm not surprised that.
You had some issues with.
In the quarter, but I understand now that bookings are significantly higher and I've learned that bookings on cruise ships are dramatically even the pricing is going up significantly and I was just wondering if you can kind of give us a sense.
I know that you are talking about the first quarter and that revenue should be up nicely you had a pretty.
Easy comp in the first quarter of last year was just wondering if you can kind of add a little bit more color on the type of route.
First quarter.
You broke up a little bit there.
Yes, Mike Michael.
I would say since the end of January beginning of February things have improved quite a bit.
Quite quite dramatically.
For sure yes.
Seeing much more demand we are seeing more members booking with our partners.
Refunds have gone.
Quite a bit in February versus January so, yes, we're quite optimistic but its only march to it and with the world around us.
I'm hesitant to make any specific prediction as to how much higher Q1, this year will be versus a year ago.
At this time, we definitely expect that revenues will be quite a bit higher than last year.
And Cologuard can you tell me a little bit about Europe versus North America as you go into the first quarter.
Because of the geopolitical issues going on in Europe are you seeing.
Europe not rebound as much as North America at this point or can you kind of give us a flavor of.
The rebound that you are seeing by North America versus Europe .
We see both we actually see optimism on both sides of the Atlantic in the U S and Canada.
In all the European countries that we're in.
And one of the.
The last question.
Sales and marketing was a little bit higher than I expected.
I know that you were going to step that up was is that a variable cost to where you can pull that back if you're not seeing revenues kind of come in as strong as you expected or kind of give us a flavor of.
It just seems like it came in a little bit higher than what I was looking for any thoughts.
Well first there were a couple of extraordinary expenses in Q4 that will not repeat we didn't want to go into too much detail, but that drove it up a bit higher than what you expected and secondly, you're absolutely right.
It's an expense item over which we have much more control over.
But we have actually increased.
In Q1 because.
We are positive about revenues and we really want to grow members this year.
Okay, great well, here's two or better.
Much improved 2022, thank you.
Thank you so much.
Thank you. Our next question comes from the line of Steve Silver from Argus Research. Your question. Please.
Great. Thanks.
Thanks for taking the question my question is more strategic in nature.
Given that prior to the pandemic you guys acquired Jack's flight club and throughout the pandemic you shifted the revenue mix.
Vouchers to preserve cash flow.
So given the fact that the core business has been so disrupted by COVID-19, and now the potential for new geopolitical tension that may impact travel in Europe .
Trying to get a sense as to how youre thinking about any additional levers there might be available to you to continue to be proactive and.
And less reliant on normalizing conditions.
From prior to the pandemic.
Yes of course, well, we know we acquired Czech flight club at the time that was in the end a little bit.
Unfortunately beyond our control because right. After we acquired six light up the pandemic hit and there wasn't a lot of interest in it.
In services that tell you about the deals that is changing so we really see 2020 to whether it's a great opportunity for Chegg sites up we never really hit that opportunity over the last two years as you might recall there primarily active in the U K and there's a big opportunity to expand into the U S. So that's the first one on the voucher.
Side, the business is actually shifting quite a bit I would say in Q4, the revenue that came from vouchers.
Oh, it was a much much much lower than it wasn't the previous quarter's advertising revenue was up across the board we will continue to scale that.
This year.
And then last but not least of course, we were a.
Start experimenting a bit more on.
<unk> members as a revenue opportunity in the area of subscription fees.
Great. Thank you so much for taking the question.
Thank you. Our next question comes from the line of Jim Goss from Barrington Research. Your question. Please.
Good morning.
Pat on for Jim.
I was just wanted to follow up on the past couple of questions on <unk>.
Europe I was just wondering if you could break out maybe your exposure just in general to Eastern Europe is kind of like a share of revenues.
I guess really more also unlike the merchant payables side for a second.
The advertising side, it can be kind of offset by other territories.
Sure I can speak about the first and then you said can speak about.
Merchant payables.
Really the exposure to eastern Europe is very minimal actually the last week.
First off if we remove any trips and offer us.
Any trips and offers that included Russia, where you can.
Troll websites as it was.
I was surprised there was not menu that you exit was less than a handful.
Also we don't operate in eastern Europe . Our members are in Europe . Our members is a UK Germany.
Spain and France.
<unk>.
Other countries like Ross dress excellent, Italy, and so forth, but no one in eastern Europe . So on that side, we're not affected on the other hand, we exited just checked this morning, Christy if we are seeing more.
Relations or voucher refunds, particularly familiar with members.
As a result of what they are hearing about the war in Europe and.
We are not seeing actually any changing trends in fact in the last seven days.
Refund rates, even decreased a little bit over the previous week. So I think people are still in a pattern, we're waiting to see what happens.
So far we don't see that members.
If it can be making changes to their travel plans.
And I would also echo that I would say that most of our merchant payables.
I didn't hear it.
And.
I haven't seen any pattern if redemption.
That.
Cause can you.
Concern to the company.
Okay.
And then on.
I guess just on the productivity of the employee base I was kind of wondering if you could maybe go into some of the.
I guess reasons for confidence that you can kind of keep the lower head count and operate more efficiently to drive that.
Higher profitability.
As revenue.
Revenue trends continued to improve.
It's mainly.
Solid of restructuring the business and focusing so we don't see as we said earlier, we don't see any big increases our fixed expenses this year versus where we were.
On the variable side.
Michael asked about it we plan to spend.
Yes, more in new member acquisition.
But in general no.
Increasing our advertising rates and as more members.
Purchasing February again with our partners.
With us through our platforms and.
And revenue goes up it doesn't really affect the fixed cost fixed cost base.
Okay. Thank you.
Thank you. Our next question comes from the line of Ed Woo from <unk> capital. Your question. Please.
Yes, Thanks for taking my question in terms of.
How do people feel about travel this coming summer do you think people are much more optimistic at omni kron is fading.
In general we see a trend that.
Members, our members and Bob your consumers booking a little bit more closer to travel to their travel date. So.
They feel Oh I can travel right now also let me go right now in the next two weeks.
In terms of responding to offers that we have for some more yes, we see we see overall a good response, but that's also.
That of course to.
Not just travel to offering the ability to cancel or refund you strips, but.
The entire travel industry has really shifted towards <unk>.
Providing consumers big flexibility so.
So im destination, so it should be coming over the quite crowded, but that's what's then.
Good about travelers, we are telling our members about destinations that are not so crowded we are telling our members about that specific cruise ship that Michael was on we had only 600 passing shifts instead of 3000.
Today, we are telling our members in the U S to go to Madeira or non stop flight that we have actually created exclusively for travelers who members together with a partner. So we can fly for the first time nonstop from New York to Madeira.
And Thats a destination that a lot of our members didn't even think about those who went on this slide in the last few months are reporting back that they had a wonderful time DSO. We are able to tell our members about new ideas, new destinations and in that respect to really great service for the travel industry that we shift demand.
From one destination that might be overcrowded to another one that might be less known and recreate deals can be found.
Great and then my last question is bought on a hotel or.
Travel capacity, particularly hotels some of the labor shortages.
Are you seeing them improve enhancing hotel opened up to a bigger capacity.
Yes, and no hotels are definitely.
Two sided story, where you'll see in some destinations.
Again significantly higher hotel rates and.
Somewhat even deliberately look I don't want to go over 70%, 75% occupancy rate that allow us to provide a good experience into off allows me to keep my hotel rates high in.
In these cases, it's a little bit tricky.
For us to find deals, but on the other hand, there is plenty of other destinations and hotels just wish that the occupancy was at 70% 75%.
Uh huh.
I haven't heard much about labor shortages I think they are easing a bit more in the U S and Europe I don't think we hit that issue that much in the hotel industry.
But I would say overall.
Things are getting back more to normal probably the most normal I've seen since April 2021.
When does this whole pandemic started.
Thank you.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Mr. <unk> for any further remarks.
Yes, no no further remarks.
Ladies and gentlemen, thank you so much for dialing in and for your time and support and.
We look forward to speaking with you again next quarter with.
Hopefully better numbers have a nice day.
Thank you ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time have a nice day.