Tripadvisor, Inc. (TRIP) Earnings Call Transcript & Summary

Okay. Good afternoon, ladies and gentlemen, thanks for joining us today for the 2:30 start of the Strategic Decision Conference 2023. For those who don't know me, I'm Richard Clarke, the Global hotels and OTAs analyst at Bernstein, delighted today to be joined by Matt Goldberg for his first STC, the CEO of Tripadvisor today. Tiny bit of housekeeping. If there's any questions you want to ask him. We've got a pigeon hole out, should be able to find that link on the various materials you've got and on there we can take on there some make questions. There's also some questions on there already. I noticed. So thanks for those, so you can vote for those to put them further up.

So we were chatting outside about how there may be some slight misunderstanding sometimes of what -- most people know what Tripadvisor, the website is, I suppose, but what Tripadvisor Inc. is today. So maybe it's just a sort of introductory question, you can sort of say, what is Tripadvisor, the company today? What are the major components of it? And then we'll delve into each of them, I suspect.

Yes. Thank you, Richard. It's good to be here with you. Thanks for having us. So Tripadvisor is a business in a company that has a common vision to be the most trusted source for travel and experiences. And we have a family of brands, all of which pursue this in different ways. Tripadvisor itself, the brand, is a business that is the largest travel guidance platform in the world. It used to be that it monetized primarily through metasearch. And over time, our dependence on metasearch, our exposure to metasearch has actually lessened, and we've diversified the revenue streams. And now we've developed a strategy, which is actually going to shift what Tripadvisor can do by putting the consumer at the heart of everything we do, focusing less about pulling them onto the site and bouncing them off to another site as our starting point and more thinking about engagement business starting point. And if we nail that engagement, the monetization potential of a more engaged audience underpinned by data allows us to drive monetization and average revenue per user are much higher. So we're excited about that journey. It's the very beginning of that journey. But I think the primary misperception is that we're just a metasearch business, and we're between a rock and a hard place because of that. We look at it very differently. We look at it as we have an incredibly trusted brand. We have an audience of scale, we have content that is unique, differentiated and trustworthy. And that trust is really what gives us confidence that we'll be able to attract travelers to the site, engage them and monetize. Now next to Tripadvisor is one of the most exciting opportunities in Ultra, which is experiences. And Viator is a two-sided marketplace for experiences, things to do in a destination. It is the largest and fastest-growing two-sided experiences booking platform in the world, and it continues to grow. So in Q1, we said 100%-plus growth. And it has the advantage of being connected to Tripadvisor because you've got a guidance platform driving demand and then you've got a booking platform that can really go deep and deliver a great booking experience. And next to those two, of course, is TheFork, which has a leadership position in Europe as a dining reservation platform. The reason that's so interesting is because Europe is, of course, an important destination for so many, intra-Europe travel is important. And of course, of course, the local European experience is just shifting to online booking reservations. We're going to have a nice position there. And when travelers go, they tell us that one of the top things they want to think about is the dining experience. So the three of them together can serve that mission. And I think together, we have a nice portfolio with the potential for growth and profitability and expansion over time.

So let's start with Viator. You call it the most exciting, I guess, also potentially most newsworthy today, one of your arrival companies has raised more capital at a fairly sizable valuation, which potentially is interesting to you guys. But do you think internally the strength of the experiences business over the last few years. What's driven that? Why is everyone -- why is Viator suddenly, you've owned it since 2015. So why is it suddenly let into this sort of rapid growth phase? What's driven that, how sustainable is that? Is it COVID? Or is there something more sustainable in that growth level?

Well, let me just say, I saw the news today as well, and that's a nice valuation marker given that we're larger and faster growing. So we really like to have that valuation marker. This category, of course, is not new, but it's been largely offline. You used to do an experience, which is heart of travel, right? We want to go and have experiences. It's not about how we're going to get there, where are we going to stay necessarily, it's about the memory I'm going to create. And so this category had typically been word of mouth. It had been a friend of a friend of a friend or walking up to a kiosk. And what's happened and been accelerated through the pandemic. is that offline to online growth trajectory is happening. The supply side, which is pretty fragmented, has become more organized and players like us and others have sought to really create an experience where supply and demand can meet and give a great experience overall. I think that there is room for tremendous growth. This is a market that has $300 billion of addressable market out there. online today is probably just 25% of that. So the offline to online is a huge growth opportunity, but there's also growth opportunity in geographic expansion. We're very strong in the U.S. We can look elsewhere. Category expansion, we tend to play in tours and activities, there's also attractions and events that are a meaningful opportunity. And we think there's opportunity in addition to that, in the way that we connect a guidance platform to a booking platform. And we think that gives us a good advantage as well.

So maybe you can sort of set out your vision to how you think that experience OTA industry is going to develop over the coming decades even. Is it going to look a bit like the hotel OTA market, is you going to consolidate around a couple of players. Can Google become an influence in this market. Where do you think this business goes to it? Is 75% online realistic? What is the real potential there?

So we look at this market and see a very similar set of conditions as the OTAs 10 years ago. And we think there is opportunity if you can bring supply and demand together and give great experiences, that people who don't even know there's a category today. And so building awareness that this category exists, most people would love to book experiences online. We know from our surveys and the way we talk to travelers that more than half of travelers thinking about traveling this summer have started with being excited about the experience that they want to go and book. And we know that 3/4 of them will book before they go, 20% might even book with a window of a month or more. So people are -- when they become aware of the category, they get excited about the category. And so we see that growth continuing. Online will grow faster than the category as a whole. That CAGR is going to be strong for a long time to come. And we think that scale matters. And so when we look at our growth rate, we are looking to drive awareness. We're looking to bring in new customers. And of course, to build our own brand. As we do that, we see that we're bringing in more loyal customers, they're engaging more and they're spending more. And every one of our cohorts is shifting upward in repeat, which gives us a very strong indication that the lifetime value and the unit economics are improving. So when we look at that business, we see a real opportunity in steal share, and there's a lot of growth potential.

And so maybe talk about the interaction between Viator and Tripadvisor. You sell experiences through Tripadvisor as well. Also Viator is a is a platform in its own right. Do those two compete against each other? What's your preferred way to sell an experience? Or is it agnostic where you actually receive that customer?

Well, those two brands are compatible. One stands for trusted advice for guiding me to the experience that I want to have. And getting to that point where I want to book and Viator, and that's a broad conception of experiences. It's interesting. We have just about as many travelers coming to us for experiences as we do for hotels or restaurants, which have been very big historical categories for us. Most people don't realize that. And we aren't exposing them to as many bookable experiences as possible. So in Q1, it's interesting. We exposed 14 million more travelers to a bookable experience than Q1 2022. That was 62% more than the previous year. And as we expose more to bookable experiences, we feel that we can drive that growth rate, if Tripadvisor is broad and trustworthy and really wants to guide the traveler to whatever experience makes the most sense for them. Viator has the potential to go very deep and be the booking and focus on the funnel and focus on the conversion, focus on that experience that gets people coming back for more. So we see it kind of like a tea that you can take a broad funnel and drive it through that booking experience. So we're excited about the way two fit together.

So talk to us about balancing growth versus profitability of Viator. I mean, how long can you keep growing? I mean I guess you've got a few quarters of triple-digit growth, but how long can you keep growing at healthy double-digit growth? And what do you want to do in terms of sort of reaching profitability? Is that your decision? Or is that going to be determined by the competitive dynamics?

So we always have our eye on unit economics and profitability. We have not put a marker out there in terms of timing or scale, but we already know we're at the scale where we can be profitable. If we pull back on our brand marketing, we would be profitable this year. Brand marketing is important because as we brand market, people become aware of the category, understanding that we're the leader in that category, they come, they have a great experience, they repeat. It helps us with our unit economics, but it also helps us with our performance marketing spend because branded search and SEM is more performant as you're investing in the brand. So that's exciting, and those are really good indicators. When we think about profitability, we know this is a very high gross margin business. We know that the #1 spend level is sales and marketing and scale matters. We can choose to get leverage on that sales and marketing spend at the moment that it comes. Of course, the competitive dynamic is important. It is a moment for us to lean in, but we want to be prudent. So we committed this year that we will keep margins flat to last year. We won't -- we're not looking at taking margins down in a major way. But because we're growing so fast, that allows us to make a healthy investment and really growing the category.

And then the competitive dynamics you've got in there, obviously, the company that raised [mainstay] get your guidance, I guess, presumably the #2 player. You've also had Airbnb that's kind of coming in out a little bit of the market. Google's had a few iterations of trying to get involved in experiences. How is the competitive dynamics? And how does Viator separate itself from those other players?

It's a great question. With Airbnb and Google, of course, these are very large companies with tremendous firepower. And of course, they've had their efforts at trying to solve this problem and neither one of them has completely figured it out, right? And so that means that this is a problem really worth solving. So that's why we're leaning in so much and excited about our position. If you look at Airbnb, they've tried to be differentiated by doing very bespoke experiences by leaning into their hosts. That's hard to scale. I also think it's hard to build multiple marketplaces on the same platform and the same brand. That's why we're very thoughtful about the unique use of each of our brands. If you look at Google, they've taken a traditional Google approach. They do not want to structure suppliers. They don't want to deal with customer service. Those are problems that we can solve. We will take a search perspective on it, and Google can be a partner to us in a place that we can really work with and we do. GetYourGuide is the most similar. Today, if you look at the experienced OTAs, it's us leading largely concentrated and strongest in the U.S., but also strong in Europe, it's GetYourGuide in Europe. And then, of course, it's a third player Klook in Asia. So you have this kind of regional play. We are very focused on making sure that we are a global player. And so that's something that we feel like, again, scale helps. And so it's about serving customers in their local markets very effectively. And I think it's a strong position to start from the U.S.

So I guess we've got a question here, about -- from the audience, which is about the potential of monetizing Viator at some point, it was on the cards before you became CEO, there was a confidential S-1 filed given it seems like you kind of see experiences is also being kind of core to getting people into Tripadvisor how should we feel about the separation of Viator in the shorter or longer term?

Well, as you said, that confidential S-1 was filed before I arrived. I was aware of that I had conversations before I arrived. I think maintaining optionality and creating optionality to crystallize value is always a smart thing to do. But right now, we are absolutely focused on executing against this business and this opportunity. And so regardless of how that structure plays out, we want to focus on being successfully serving consumers and suppliers. That's the focus. There's nothing that says these two things have to be part of one. There's no rule. You could have a relationship between the two and crystallize value and maintain that optionality. But today, we are focused on delighting users and travelers who are looking for that next experience, making sure that they want to come back and serving those suppliers to helping them drive their business and make sure they do it in a quality way. If we can do that, we'll get the two-sided marketplace to continue to do what it's done over the last year, and we're excited about the opportunity.

And you have -- Viator has B2B relationships with booking probably the most famous I think there's a lot of others out there as well. I mean, is there anything fundamentally different about the arm's length relationship with Tripadvisor? Or is that model kind of there that you could be a B2B partner with.

I think it's a great point. The number one point of sale is actually Viator Direct. That's our number 1 point. So number 2 is Tripadvisor. That's because we can operate them together and find ways to do it. There is still tremendous upside, as I said, in operating those. But our third category is third parties. And there are literally several thousand of them, and there are some big ones. It's Expedia and Booking. We've talked about our Uber relationship. So we're going out there and experimenting with third parties. We work with travel agents. We work with small players. And that's been part of our strategy is to make sure that we are showing up wherever people want to book experiences and that we can supply that. But I think you're right, we can create a commercial agreement regardless of what direction we choose for the business.

So let's shift on to see if there's anything else on the Viator here, but let's shift on maybe to the core business, Viator obviously a bit going very well. What you talked about how metasearch has become a lesser important part within the business. I mean what is the future of metasearch within the Tripadvisor framework? Can Tripadvisor exist without metasearch.

Metasearch has a role to play. Metasearch delivers very high-quality traffic to partners who desire that traffic. And it's a great performance channel. Of course, there are other players that are playing there, too, like Google. But the interesting thing is both Google and the OTA partners who largely are participating in our metasearch they both want a viable alternative for obvious reasons. And so what we provide is a great alternative in context and with the travel sort of content and community and sort of association rather than being part of a broader offering. Our job is to reinforce the relevance of the Metasearch business, and we think we can do that within our strategy. Number one, we bring together all of the data across the group. Data from Tripadvisor, Viator and of all of it. And we use that data to be much better about thinking about who's arriving on the site, the experience they want to have and driving them into the meta experience when it's appropriate and driving them elsewhere when it's not. As we drive them into the meta experience, we can make sure that, that data helps us deliver higher-performing traffic, and we have ways that we're doing that. We can lean into international because we've been very strong in the U.S. We want to be even stronger in Europe. Rest of the world is coming back, but it's smaller. We want to lean into making sure that we are global. And then, of course, making sure that meta has a place in a mobile world, too, where we probably underdelivered over the years. So we think we can reinforce it, but we don't believe the future growth of the business relies on it because it's a very small percentage of the overall traffic that's getting monetized that way. A very large percentage is not getting monetized that way. And if we lean into this engagement strategy, the focus on what got us focused on people who want to come and plan before a trip who want to be with us while they're on their trip, who want to leverage our content, and we can enhance that content. We want to have a mobile experience that mean matters when they're in destination or planning. If we lean into all of that, the engagement model drives not only the media, which is both advertising and B2B, but it drives the marketplace. And I just think that if you look at what we can do with marketplaces, look at the experiences category, we would have shown that we can do it. And there are other categories that we can drive to, we can drive much more opportunity with restaurants. We can think about SMB in the hotel category that we're probably underserving, and we can think about other categories of activity that consumers want when they travel, could be events, could be timed activities, all kinds of opportunities to match supply and demand.

So maybe talking about some of this, you mentioned monetization there. I guess the age old question a little bit with Tripadvisor has been lots of users and less monetization -- some of the other companies in the space. What are the really sort of incremental monetization opportunities that you can see that you can extract more money from those users that may be you're not extracting any money out of at this stage.

Well, I think we can do a better job delivering a media solution to advertisers that are both endemic and non-endemic as you know, spend a bit of time in that space and digital media companies and data-driven advertising companies. And we have a real opportunity as we leverage this data and we drive this engagement model to bring that audience to bear on all kinds of advertisers. We recently reorganized. We're working on our operating model and our go-to-market, we've streamlined. So we can go and have a singular conversation with the enterprise hotels to talk about what do they want to do direct. Obviously, they're going to use OTAs sometimes they want to do a lot direct. They want to serve their loyalty programs. We can talk about how our audience, as they're searching and what they want to do. We can deliver a more relevant, more personalized, higher-intent audience and really focus on attribution and deliver a more performing opportunity. Our media business has largely been concentrated in display. That's not where the growth is. We're starting to experiment with video, CTV, social. There is a lot we can do to drive other formats and a much stronger, highly engaged audience in media. But that's not all. I think our B2B business is really interesting because there are so many literally millions of businesses around the world. that want access to an audience that's traveling. That's high intent, that's thinking about where they want to go. And I think we have probably under-indexed in how well we can serve, and we are experimenting now with what do we want to go to market be to be, how much of this can we do self-serve, how we create the kinds of products and services with the attribution that really helps these small businesses make difficult marketing choices. And we think we can be a go-to brand with a go-to audience for many of them.

So you talked about coming from the experience of display marketing. When you joined, what was your kind of assessment of the display marketing initiative at Tripadvisor. I guess a lot of it felt quite untargeted, not travel-related. Why wasn't it done before? Why wasn't there a good display marketing business or any marketing business, let's say, there was -- that was incremental to the business.

What there has been, right? I don't want to suggest that we haven't done some of this. We've had some amount of diversification, but we think we can take it further. And the answer is that we were optimizing for a different model, which was an arbitrage model. And what we want to do is maintain our metasearch business when we begin to optimize for an engagement model. And if we can optimize for an engagement model, we see a lot of accelerance that can really -- we talked about on our earnings call in the first quarter, some moves that we've made, where we've seen some green shoots. What we're seeing that as we provide different kinds of planning tools as we enhance our content and serve it up in a different way, we are seeing higher levels of engagement, click-through, less bounce rates, more contribution of content. And it's actually flowing through to GBV and experiences. So the hypothesis that I came in with has some really nice early green shoots. But I recognize this is a show-me story. And so we want to deliver this quarter by quarter. And so what you'll see us do is you will see us execute on these initiatives, show how it's being delivered again in our products, talk about KPIs that are good indicators, and it will flow through to our financials. But the conversations that we're having in advertising are really interesting. We've done some really interesting non-endemic deals like with L'Oreal, which is a multiyear, multimillion dollar deal. Where they're really focused on how do they position themselves for travelers, Fuzetea. Certainly, the destination marketing organizations are leaning into us, and we're getting much more creative than we've been in the past, sponsorship using new technologies, AR/VR, doing a lot of very creative work with our content studio, WonderLab, we're producing videos for the DMOs. We're doing a lot of really interesting work. And I think it's really just the beginning of us leaning into this. We will move from being somewhat siloed to being a far more integrated approach where the consumer is at the center. That engagement picks up and the beneficiaries are our partners. Advertisers, small- and medium-sized businesses, categories like experiences where we can match supply and demand and ongoing reach for metasearch. If all of those work together, the financial profile of this business will be a nice growing business. with margins that we said this year will be stable. We're holding margin this year. We're not suggesting that we want to make some big speculative investment. But we don't have anything built into our revenue from the strategy. That builds year-over-year. So '24, '25 as the engagement model picks up. And of course, all of that sits side by side, this massive growth opportunity in experiences.

So would you expect the core will deliver stable growth over time? Or is it going to be that's steady and then the growth comes from the experience in this business.

I think it will be stable. I think it will grow. We've said on our last call, we want to be at or better than overall travel market growth, and we think we can deliver that across the portfolio. And of course, we want to make sure that this margin is stable and expands over time.

So you mentioned a couple of times trip planning. Is this effectively a new-ish product for you? Is that we're going to see something different on the Tripadvisor app or the Tripadvisor website that's that helps with this trip planning, maybe any sense of what that might look like?

Yes. So First of all, I think the use case for many travelers that come to Tripadvisor is trip planning. We just have made it particularly easy to do. There is a trip planning tool that's very rudimentary. And actually, we've had over 10 million trips planned in the last year. But we haven't really leaned into it. So we are looking at doing product innovation around trip planning. We're looking at how do we leverage all of the assets that we have. And I think you know we've been focused on data and AI for a long time, but I've really put the focus on data to bring our group data asset together, and we think we can leverage the advances in generative AI to make a difference in trip planning. And now to do that, what we said is what really differentiates us. We think having reviews from real people who have actually been there that are trusted, that are sourced from a brand people trust has value. And so we think that is a tremendous value driver. We're going to leverage that. But we're also going to be there with those who are driving the large language models and experimenting. So we've already announced that we're going to participate in the plug-ins with Microsoft, OpenAI, Google Bard, we are going to experiment and learn. We are going to think about what do we want to share, how do we make the most of that ecosystem? What's the value exchange? There's talk of is it going to be licensing? Will it be traffic? But what we know is we have a fantastic set of data. We have proprietary data that no one else has access to, and we can choose to use that for our members on, for example. We have 130 million members that come to our site that are logging in. And if we wanted to [indiscernible] create experience just for members. So I think there's a lot of different avenues we can go. And what I would say is we see AI accelerating this strategy. We recognize that there's a lot unknown about AI. We've been at it. We've got a robust team work on it.

So just coming up to the -- going back to the metasearch business again. You talked about how Google wants an alternative as well. Maybe you can just sort of elaborate on that view. They want you to be competitive into their auctions? Is that they're trying to keep you in there? And how is the kind of competition versus Google? Are you sort of -- would you say you've seen a meaningful shift of spend on metasearch shift to Google? Or have they kind of created their own category.

Yes. Look, Google is a fantastic competitor. And I don't think anybody would suggest that they're going to go headlong into competing with Google. When you compete with Google, you want to do two things. You want to focus on how to differentiate from Google, and you want to focus on how the competition can help you partner with Google. And so of course, we need to have conversations with them, and we are having conversations with them. When I say they want us to exist, that's for multiple reasons. Number one, they've got regulatory challenges. They would like to have competitors in these spaces. They do not want to destroy the competition. But they also were a paying user of Google. They want us to continue to pay. And so we have really good conversations around how we can differentiate, how we can focus on what we're going to do best and how we can partner there. And of course, we're not rosy eyed about it. We recognize that Google has, in many ways, advantaged their own monetization, and that's had an impact on us. But we are very focused on differentiating and finding ways that we can cooperate that will be effective for us.

And maybe we could talk about Tripadvisor's own marketing strategy because it seems to me like pandemic, you switched off all performance and brand marketing pretty much. Now you're sort of leaning back into some performance marketing, but brand marketing doesn't seem particularly prevalent. How do you think about marketing the Tripadvisor? Are you going to be more into performance marketing from brand marketing come back...

So you're right, the pandemic brand marketing went off. Performance marketing has been there. We do use SCM and use other performance channels to make sure that we have traffic at a good return, and we're very focused on discipline in the roles that we look at, and that's been stable over time. And certainly, the experience space, in performance marketing is very important, and we're doing that across both Tripadvisor and Viator. We're doing brand marketing with Viator right now, and it's working really well. And as I said, it actually helps performance marketing. With Tripadvisor, we're doing some smart partnerships where we can be very focused on getting the brand out there. Of course, people recognize our brand when they travel the world and see our brands show up at hotels and restaurants that they go to. It's a brand that really suggests you can trust this place. And I think as we look at how we want to market the brand, the most important thing is trust. So we would want to market the brand at that moment where we've done something with the product that we really want to speak to is new and different and unique. And I think that time will come. But what we don't want to do is we don't want to return to a level of spend that isn't necessarily serving a very clear purpose. We will be focused and judicious about our brand spending.

And if we think about the sort of wider dynamics within metasearch, you stop disclosing things like average users a bit before the pandemic. But what -- how have those maybe qualitatively trended? I think it's fair to say the metasearch business has underperformed the overall recovery in hotels. Is that down to traffic? Is that down to monetization of traffic? Is that down the cost per click dynamics? Is it geographical differences? Maybe you can sort of understand.

Well, it's interesting because, as I was articulating our strategy to before, the key part of the strategy is that Yes, of course, it's important what comes into the top of the funnel. But actually, what's more important than the top funnel number is what are you doing with that traffic? And how do you focus on higher quality traffic that you can monetize more effectively. And we're putting a real focus on that. I think that will start to drive our ARPU levels up to we've been known as lots of traffic, lower levels of monetization, I would like to see our average revenue per user move in that direction, and that's where our strategy calls out that we will do. When I think about how the auction has performed, of course, coming back from the pandemic, price has been the driver of that performance. We've been healthy in the U.S. and the U.S. auction has gotten back to 2019 levels. We haven't seen that as much in Europe and the rest of the world. So we're very focused on that international opportunity. But yes, price has been healthy. And of course, demand is coming back. Demand is better '23 than '22. The actual clicks going through or not at 2019 levels, but the price has compensated for that. And prices held. It's held, it's been healthy. That's what we said in Q1. So that's a good dynamic for us. And of course, as I said, this is not the future big growth driver of this business, but it is a sustainable and we believe has long life. And our strategy is, as I said before, to reinforce it through data, we think about international, that's thing about this, how the engagement model serves by delivering even better quality traffic.

Tripadvisor plus? Is it still ticking along in the background, probably -- is there -- is it still possible to join TripAdvisor Plus? And what do you see as the sort of future of that sort of I guess, direct-to-consumer type product?

Well, Tripadvisor Plus, of course, was the initiative of my predecessor, and I look at it as a fantastic test bed for us about what a paid model could look like. It's not the final answer. I do not believe, and we think the starting point that's really interesting is a free membership model. As I mentioned before, we have 130 million members, and those members come in, they give us their e-mail and what membership allows you to do is to come and basically contribute to our website and the ratings and reviews. We think there's an opportunity to convert that membership and grow it by really leaning into rewarding engagement, and there are a number of different ways to do that. If we can get free membership underpinned by data, working really well. that membership model will create a very nice funnel for us to experiment with paid models. But I think the starting point of a free membership model that rewards engagement and loyalty is a good place for us to start.

So let's just delve a little bit more into the shorter term if we may. Are you seeing any evidence that consumers are -- the consumer has changed, I guess, either in a positive way, like they started to research more because that we're coming out of pandemic and they're being a bit more selective, they're becoming more price conscious. Is there any change in behavior that you're sort of seeing in the consumer sort of as we exit COVID and potentially enter a slightly weaker consumer macro environment?

Yes. The consumer has been really interesting. And many of the things that we held through pre-pandemic about different economic indicators and what might mean for travel demand has not held because the consumer has been very strong, has come back strong. we said in our Q1 earnings that the consumer demand was very healthy. We said we didn't see anything to suggest there was any kind of pullback. And certainly, our survey data suggested that there was going to be a strong summer, we saw 8 out of 10 travelers saying that they were planning a summer trip. 9 out of 10 of them were saying, I'm going to spend as much more than last year. International travel is on the rise. It's at pre-pandemic levels in the U.S. and Europe from our surveys. APAC intend to travel over the summer is double what it was last year. So there's a lot of really good indicators I think a key driver is the shift from -- I want to consume things, I want to have experiences. I want to go out and do things in the world. That is the biggest shift that has created a new normal for the travel consumer. What's interesting is travel as a category is being defended in the discretionary bucket at higher levels than other discretionary categories. People really want to defend now. It's not that the economy, and I think the two major things are what is the personal balance sheet of a consumer and what is their view of the future and what it might mean for them. If you look at those two, certainly, what we're hearing is that 4 out of 10 travelers say they may adjust, but the adjustment isn't always, I'm not going to go on that trip. They say I'm still going to go. Only 3 out of 10 [indiscernible] cancel the trip, but they may say, I'll go on a shorter trip. I may stay closer to home. I may choose to drive rather than fly. I think the demographic that's most likely to be impacted by the economy is the millennial demographic. They are more likely than average to be concerned with the economy. But this experience is sort of trend is real. More than half of travelers told us this summer, the thing that they're most excited about is the experience that they want to book. And that's just a new thing. It used to be that I looked at the world and said, where do I want to go? How am I going to get there? Where do I want to go? Where am I going to stay? I think many more travelers are starting with, not only where do I want to go with, but what experience do I want to have? Where am I going to go to have that experience. And that's the starting point. And that's a great position for Tripadvisor or as such.

Do you actually see that cross-selling reversing then. So would you used to sell a hotel first and then you try and sell them an experience and now you're actually selling them experience, trying to sell a hotel afterwards.

I think that is a use case that we are increasingly seeing people begin with the experience first. That's something to watch, but I think it is a trend line that we're very interested in, and we're seeing some very interesting indicators there.

We're not seeing too much of a consumer downturn in travel so far but it sounds of things. Would you somewhat welcome a little bit of a more sort of selective consumer? Do you think that Tripadvisor's core business has maybe been hurt by the fact that people know the fish have been jumping into the boat as it were and people have just been booking very quickly and not doing much research and a bit more research and price comparison might help them? And then maybe just extending that question to whether you agree with that or not, how do you feel about sort of Viator and maybe TheFork as well, we do start seeing the consumers sort of cut back a bit.

Yes, it's a great question. We think that all of our brands have a role to play in whatever economic environment. Of course, the pandemic was something totally different, and we saw how the business could adjust and then adjust then it came back. We believe, certainly, I understand the intent of the question is that perhaps price comparison is more interesting in an environment that is less positive, but we would never hope for that kind of an environment, and we think will perform in either event. I think our business is, as I said, I think there is a normal where people are defending this kind of discretionary spend and we believe that our businesses can perform. And if we see volatility or change, we have all kinds of levers that we can pull to make sure that we perform in that environment as well.

So just taking your comments on what you're seeing in the macro environment, maybe we can just ask about the guidance that you've kind of given so far. You had Viator, you said it was 60% up in April, but you expected it to slow and you expected other growth rates to moderate through the quarter. That was mainly comp issues. Is that what you're seeing?

So I'll just comment on what we said in the quarter, and that's true. We had over 100% growth in experiences. In April, we saw 60% and it is -- we had Omicron in Q1, which made an interesting comp, but then an explosion coming out of Omicron and then carry through the summer. So that comp is what we're talking about. But I think we will have continued growth through the year. Certainly, experiences, we see are growing even though it won't necessarily be at those levels. I think we said that in April, we saw before growing it 20%. We can see that kind of a growth rate being something that carries through. And through all of this, one of the things we're very focused on is making sure that we are rightsized, that we are focused on the fixed cost saves that we did during the pandemic and that we're not foolish about adding back fixed cost and that our marginal cost and the way we lean into marketing is rightsized for the environment. So that's the good news is that we can focus on that and deliver the guidance that we gave.

Okay. Maybe we just spend a bit of time on TheFork. I think everyone very fairly appreciative that Viator in this rapid growth phase and the losses that to achieve that growth, TheFork, I guess, it appears more like a mature business. It doesn't feel like it should be growing as fast. So maybe just talk about the structural opportunity you see for TheFork, is there are a lot more restaurants you can sign up and the sort of pathway to make that a profitable business?

So with TheFork, it's really important to know that we made investments in previous years in technology, product with some replatforming based on some of the acquisitions. And now is the time to take advantage of those investments. And so we are driving that business towards a much better margin profile in the back half, and we expect to come out of 2023 in a profitable stake and take that into 2024. It's interesting. Europe is in a different phase of its life cycle in terms of offline to online around dining. Still a lot of consumers moving online. TheFork is taking advantage of that in Europe and has a really good position. There is no other pan-regional competitor that has that position. So you've got to kind of look market by market. We look at both sides of the marketplace. We think there are new restaurants that we can add, and we've seen some stabilization there. It's been really good, and we're working very hard to make sure we serve those restaurants. We give them data that helps them manage their business. We have payment options that helps them of bringing new customers. And we've got loyalty programs that keeps people coming back. On the demand side, of course, the European consumer is very excited about booking online. So if we can give them a really good experience in the app, and by the way, the app is performing really well. We've been the #1 most downloaded dining app in the world for a few quarters. And I think last quarter, we were even more than the next two combined. That's where we are in the life cycle, so I don't want to pat ourselves on the back too much, but it's a really good indicator and we do have people coming to that app. And what that means is more direct, more repeat and it really helps our unit economics. So we think that business is on the right trajectory, and we think that it will get to profitability by the end of the year and going to 2024 that way.

And so you talked about the Fork app, I guess you also mentioned earlier a mobile, wanted to improve the mobile strategy. Is your ambition that consumers would download three Tripadvisor apps, Tripadvisor, Viator or Fork or do you want to have one integrated consumer-facing app that would deal with all three parts of the business.

I don't -- we have three different brands that do different things. They have audiences that overlap sometimes but are unique. And so I think what we do is to differentiate each brand for its unique audience and what they're going to do. I don't think we need to necessarily match the apps together. But we can create experiences. So if you're being guided by Tripadvisor , there can be opportunities for multiple categories. When you go to Viator, you really want to book an experience. So let's give you the best possible way to do that. And where are you using TheFork app. You're thinking about dining in Europe. You're going there because it's your holiday destination or you're traveling in between countries or you're local. And we want to give you a great experience and we want to reward your loyalty, and we want to keep you coming back.

So Tripadvisor is a global brand, Viator's a global brand, TheFork a bit more regionally focused. Can it also become a global brand? Are there opportunities here in the U.S. or other countries you could enter?

Geographic expansion for TheFork is not our top priority. We think we can go much deeper in Europe. There's certainly secondary markets and there are markets that are at scale and perform better. We want to lean into those markets. We actually made some smart decisions. I think we had some far-flung territories that we've brought back. We don't want to necessarily be doing investing in territories that we don't have the benefit of being the clear winner. And so we're very focused on being a European-focused brand today.

So about 5 minutes left. So let's talk about generative AI. I am sure, we've got something. You mentioned it a couple of times you're going to use it. How much of a game changer really is it going to be for the travel industry overall and Tripadvisor as a platform and either natural sort of use cases for it within the space?

I think generative AI is one of those technologies that comes along and by every indication, will be pervasive. It will be involved in every industry, it will make our lives easier. It will drive productivity levels higher. It will create opportunities to think about products and services that we couldn't deliver as effectively in the past. And so it's incumbent on every business to start with the proposition. What do we have that's unique that will allow me to take advantage of this technology. And I believe that businesses that have a very strong brand that stands for trust that have content sets that are reliable, that have proprietary first-party data, and we have a very large asset there. They have a real opportunity. Now to do it, you've got to think about how do I want to integrate this new technology into my products and services? And also, how do I want to participate in the ecosystem. And so the -- I've spent a career when the search paradigm came around, I was working in media, worked with the search players to figure out how we play in the media world. And I was just only planning when the digital mapping wars were happening and we figured out how to play in that. I think we will participate. We will experiment and learn, we're going to play with Google, we're going to play with Microsoft. They understand the value of our content and our assets. That's why they want us to play with them. Everybody is trying to figure out what the monetization and value exchange is going to be there may be distribution opportunities, there may be financial opportunities. And I think we have a real opportunity to make sure that our products leverage our assets and do that in a really thoughtful way. So I see it as an accelerant to our strategy. I said to the team when it came out I was like " let's not focus on driving the hype cycle, worry about getting the early headline. Let's focus what we can do differently. " and so I think we can offer a generative AI experience and product offering that feels different than what you're seeing elsewhere. That leverages enhanced content that creates more context that brings you to the moment where you might want to book and allows you to do that in the setting that we provide. So I think we have many opportunities to win. And like everybody else, we're going to learn along the way. And I think that's the most important thing.

I mean do you think it also creates more competition? And we've got a question here is, what was the fundamental reason going forward, consumers will plan a trip on Tripadvisor versus using generative AI. Obviously, there's going to be some crossover there. But does it create more competition? And maybe related to that, how do you protect your proprietary content because I think you can as anyone can read the reviews at the moment.

Yes. So in terms of competition, there will be a lot of people that will try to figure out how to leverage the technology. And the question is, how can you offer a product and services that you can rely on. I think with AI, trusted information has never been more important. And we start from that basis of trust. You know where the source material is coming from. And so I think that as we get inundated with information that we just don't know where it comes from, it may not be good enough. So we'll have to go further. And I think we can be one of those places that people go further. In terms of protecting, we would never want to stand in the way of innovation. So a lot of our content is available, freely available already, and that is no problem. And so I think -- I don't think you start from a place, how do I how I put walls around all of my content. You start from the place of what are the assets? And it's not just about the content. It's also adopted data. We've got proprietary first-party data, signals of intent, behavioral data, who's coming to our sites. And that data, we can pick and choose, how to use it, where to share it, how to take advantage of it. So I do think the use case of coming to Tripadvisor will be strong. And I also think we will continue to be a vibrant player in the ecosystems that are emerging right now. You want to play there, you want to position yourself to play, and we will. And so I'm excited about this technology. I'm not full hearty or Pollyannaish about it. I think we all have a lot to learn. But I don't worry that somehow we've got to put up walls.

So maybe just a final question. You talked about a lot of innovation, things going on at Tripadvisor. Does it sound like you're looking to do an enormous amount of capital investment. The company is sitting on $1 billion of cash, about 40% of the market cap right now. What can you do with that? I mean do you want to buy back shares? Is there a way you could buy out Liberty? Is that a possibility you can look to do? What is the sort of use case for the cash at this point?

Well, of course, we do have a strong balance sheet. We like that as we talk about what's going to happen in the macro. It's always nice as you think about uncertainty volatility to have a nice balance sheet. I think all capital uses are on the table. Certainly, we think about equity, we think about debt, we think about organic, we think about inorganic. Liberty has been a terrific partner. We value the Liberty relationship and they bring expertise and support that is important. So I don't -- we haven't had any conversations about that. But I think we have multiple opportunities, and we will look at being very judicious about how we deploy it. And I can assure you, it's not something we won't do anything with. We have opportunities that we want to go in. And I think experience is so interesting, really making sure that we have a great position there is a great way to think about using our capital.

I think that's it. Thanks very much for your time today. Thank you.

Appreciate it. Cheers.