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

All right. Thanks for joining us for the 8 a.m. slot on day 2 of the 41st Bernstein Strategic Decisions Conference. If anyone doesn't know me, I'm Richard Clarke, I'm the analyst who covers global hotels and leisure at Bernstein. I'm delighted to have Matt Goldberg with me today, the President and CEO of TripAdvisor. Welcome. Thanks for joining us today.

Thank you, Richard.

So I mean, look, let's start with or get macro out of the way maybe a little bit earlier. We've seen with your stock, a lot of other stocks, a lot of volatility. To what extent does that sort of round trip that roller coaster we've sort of seen maybe of the stocks in the year-to-date being reflective of what you've actually seen internally within the business, right? Have you seen substantial consumer reaction to some of the things that have moved the market so dramatically?

Well, clearly, we track the uncertainty in the macro very closely. And we're keenly aware of that. We're not immune to the ups and downs of the macro. But we really focus on the long term, which is that travel will continue to grow and we'll work through a macro. Now we just reported for our quarter not long ago, and we had a good quarter, and we reported that up until the point of early May, the travel consumer was durable. What we see is intent to travel. And it's interesting because I've been in this industry a long time, we used to have if/then statements. If this happens, then this will happen in travel. Some of those if/then statements don't hold anymore because the traveler is thinking differently about their pocketbook. They're thinking differently about experiences versus material goods. They're thinking differently about categories of travel. Experiences, things to do is still the mainstay of the travel budget, and it seems to be something that the travel consumer is going to defend. But we watch it carefully. We also said, and I'm going to keep my comments to where we were at the time of our reporting. We also said that in our experiences category, we're watching a few things, certainly the way that there may be bifurcation between the upper end and the lower end. It feels like it could be happening, but there's still travel happening. And summer intent is high. And people still want to do more than 3 things when they go on the holiday, and that puts us in a really good position for that. But we're watching cancellations. We're watching price. We haven't seen anything up until that moment that we reported that suggests that any big change is coming. We watch it carefully, we can adjust. And of course, being in multiple categories, playing in hotel where price comparison is really helpful with some -- a consumer who might be price sensitive as well as our partners who are very interested in high-performance traffic, which we can really deliver in these times, that seems to have some strength. We also are combining Meta with booking in our app, which is a really interesting opportunity. And experiences has a good tailwind. And of course, with restaurants, where we're also exposed in Europe, we have a really good territory and a category where you don't have to travel to do it. It has a local dimension. And you certainly don't have to get on a plane to go somewhere new and have a meal. So we feel like we're well positioned, but we're keenly aware that there are uncertain uncertainties, and we can adjust as we see things happen.

So one of the things that you called out at the Q1 print was some strong pricing in the Meta business. To what extent do you think that's a sign that TripAdvisor or Metasearch, more broadly, is somewhat more defensive? Other -- your partners will go and chase demand or pay more for demand? Or do you think there are other drivers of that strong Meta pricing?

Yes. Certainly, the first statement is true. Meta can perform on the way up, and it can perform well if there are choppy waters. And that's because price comparison still brings tremendous insight. We've got a fantastic platform to deliver both for the consumer and for our partners. But there's other things happening there, too. One of our strategic areas of focus is to stabilize our hotel category. And it's something we talk about a lot. We've been doing product work. We've been leveraging data. We've been leaning into our engagement strategy so that when our audience, which is still the largest audience available anywhere for travel, when they come to us and they are looking for what they want to do, where they want to stay, the experience they want to have, we've been giving them more content and more insight to keep them on the site longer. That allows us to monetize on our site, which is one of our key strategic initiatives to monetize that large audience more effectively. It allows us to cross-sell. You may be interested in a hotel, but you may also want to do an experience, and we can cross-sell that experience. And of course, as we do that, it warns that lead so that when they eventually do get passed off to a partner in Meta, it is a higher-performing lead. It actually is converting better, and that is driving up pricing. So we're really excited about our product work, and we also think the product Meta has durability. And when we combine it with booking in the app, which we're starting to do, that has become a very interesting use case for our most high-intent audiences.

And to maybe just balance that against the strategy you mentioned in your first answer of, I don't know whether the right would be experimenting or trialing direct booking within the app. That feels like a shift away from the Meta product. Is that going to be the long-term strategy of TripAdvisor to have direct booking options or those sort of always fit in alongside the Meta product?

Well, it's interesting because we are finding it to be complementary. We're finding that the 2 can work together. Now remember, booking is limited to our app today. We're going after a different segment of audience. We're approaching it differently than we ever have before. We've got a partner. We're focused on the consumer experience. We want to be a cross-category planning and booking mobile experience. And we think we can be as good as anyone in the world at that. And what we're seeing is that when you combine booking of hotels, booking of experiences, booking of restaurants and you combine that with how we're leveraging AI to solve the cold start problem, as you want to start planning a trip, to get more conversational in our AI travel assistant, to use AI to get our content and our tools to be more personalized and more relevant than ever before, we're finding that, that can work really well together. So it is a different approach than we've ever done. And we're excited about the early performance. We are seeing that those travelers who come to us, who are engaged in that way, are spending more time on our app. They are leaving more reviews and photos and tips. We're finding that they're more converting at higher rates and starting to repeat, and we're finding that we can drive ARPU up. And so we haven't even promoted this, right? This is something we were testing. We plan to roll it out further in the app. We're going to start to promote it, and we think that this is a really interesting trajectory. And it's part of the overall strategy to stabilize that hotel category, to accelerate the experiences category and to diversify our sources of traffic so that people are coming more direct and repeating and returning. And the early indicators are good. And now the job is to take that product work, continuously innovate on behalf of the consumer, deliver that value to our partners and scale that up. And that's why this year, we're starting to invest in some marketing -- thoughtful marketing about how we can scale that up.

Okay. Makes sense. Maybe just one last on the macro front. Maybe we're at the cusp of a deglobalization trend. It'd be interesting to hear your thoughts of that, but visa restrictions going up and maybe some people flying over the U.S. now. How important is a sort of robust growing international travel pattern to TripAdvisor? Or can you benefit from a more sort of domestic world?

Yes. We think we can serve the consumer wherever they choose to go. And we saw some of this during the pandemic where people stayed closer to home and they changed the kinds of things they wanted to do. The good news is we've got this category diversification. We're very strong on inventory, certainly in the experiences space, where we have the largest inventory by far of anybody in the world, and we can adapt and present a more relevant offer, whether it's domestic or international. Certainly, international, in many ways, there are segments of the consumer that's going to continue to drive international. There are segments that are going to go closer to home. The important thing is that we can do well when people travel. And what we're seeing is that the traveler is not stopping traveling. They may travel closer to home. So you may see an increase in driving trips. You may see an increase in second- and third-tier destinations. And our strategies are to have the inventory and categories that serve that traveler mindset. So we feel pretty good in any case.

Okay. Wonderful. Right, let's move a little bit more on to strategy. So you've been CEO now for about 3 years, I think, is that correct? To what extent is the TripAdvisor today the Matt Goldberg's TripAdvisor? Have you -- is your strategy now in action or is there more changes, more things you want to do?

Yes. Thanks. And I started in July of 2022. So we're just coming up on 3 years, and it has been one heck of a 3 years, a lot of fun, some challenges to work through, but very exciting in a period of incredible innovation. So I'm as excited to be here as I've ever been. We started off by very clearly articulating that our vision was to be the most trusted source for travel and experience. And that's important because trust and authenticity is becoming more rare and more valuable and more precious in an AI world. And we think we sit really well on that nexus, particularly between travelers who are finding it hard to find trusted sources and how can I trust that I can book and the operators that would like to meet them. So that's the first thing. And of course, as a group, every single one of our businesses is focused on that vision. Now each part of our business has its own distinct strategy. And the reason is that each is on its own unique path. It serves distinct audiences in distinct ways. So TripAdvisor is a guidance platform. And our job there is to attract travelers and be the best in the world to make recommendations that are highly personalized, relevant. We don't want to force them down a funnel. We don't want to try to be another OTA. We want to be a guidance platform that can leverage AI, build the best products, and that's what we've been doing. And so the first year was about organizing ourselves around an engagement strategy to do just that. The second year was to begin to deliver on that and see what worked. And now we're starting to scale the impact of that, so we can deliver stability in hotels, accelerate experiences and go deeper into what's going to cause people to come direct, whether that's the app, a membership opportunity that's going to reward them for not only booking with us in that app, but also the way that they engage with us. And so we're really excited. We've got some launches to come this year that we'll say more about in the future. And that strategy is underway, and we are scaling it. Now it never happens as quickly as you want. And TripAdvisor has transformative aspects to it. This is -- we've always said that our -- we have legacy businesses there that are not going to be our future growth. So the idea is to get them all working together. But the good news is TripAdvisor, that brand, can serve as a demand generation platform for the rest. So Viator is a very clear experiences OTA. TripAdvisor can guide you there, let you look at the broad set of opportunities and Viator can help you go deep. If you know what experience you want to have, we will have access to anything. And so the opportunity there is to scale. And when I entered the company, that was just coming out of COVID, the demand profile was high. We were investing in marketing. I think we're starting to see the opportunity around our marketplace flywheel to get efficient marketing, working together with the product, working together with expanding supply in the way we serve operators. And so our investments are now becoming more balanced between marketing, R&D because product is going to be the best marketing opportunity that we have. It's going to be the reason people come, stay, book and return. And so getting that working and then, of course, we have not only the supply we have, but even with the largest supply, we continue to add second- and third-tier destinations, categories where we're underpenetrated, and that can work across both of our brands. And then, of course, TheFork, which is our smallest of the 3 businesses, but one that we're really proud of because it's made a lot of progress in the 3 years. That business is -- back when I arrived, it was burning quite a bit of EBITDA. And we made the commitment very early on, and I know a lot of investors were somewhat skeptical that we could do this. We said we can continue to grow this. We can position ourselves as the leader in European dining. We can focus on unit economics, and we can deliver really strong double-digit growth, which we continue to do, while we bring it into profitability. So -- and of course, both of our marketplaces. 2023, we were breakeven at Viator. Last year, we delivered good EBITDA, and we're going to continue to accrete EBITDA in the future. And of course, TheFork hit last year as well, and we're going to continue to both grow B2B, B2C in a balanced way, and we're adding partnerships that are showing the strength of that platform in Europe. And of course, dining has been an interesting category in the ecosystem. And we think we're in a great territory. And we think that dining is an important part of the travel psyche because when people go, they want -- they're thinking about where I want to stay, where I want to eat, what I want to do. So we feel really good about our categories. And I'll just finish by saying we see tremendous opportunity ahead. So these strategies are, as you say, the 3-year of work that we've been doing. And as we look forward, we see tremendous opportunity ahead. Opportunity to create value together in experiences where Viator and TripAdvisor can collaborate against marketing, against product, against supply, leveraging our group data asset, thinking about international opportunities. We've largely been U.S. to U.S., U.S. to Europe. We can start to think about other territories. And of course, in dining, we think culinary experience is really interesting. And TheFork is increasingly experimenting with AI, which allows them to think about how to serve restaurants that are off platform in unique ways and potentially the global restaurant set of relationships that we have. So I think there's a lot of group opportunity to collaborate, leverage our assets and create additional value going forward. We feel really good about the portfolio.

Great. Well, let's maybe move on to the brand strategy. I'm sure it's a question you get fairly regularly, but is 3 separate brands the right strategy or should you have more, less brands than that? I'm sure it's been mentioned to you a number of times, some of the transactions that have -- for TheFork peers that have gone on in the last year or so, and then we've had valuations attached to Viator's peers in the past. In 10 years' time, is TripAdvisor going to be 1 brand, 3 brands, 20 brands how do you think this business evolves as a group?

Well, 10 years is a long time. And I think it will be a very dynamic 10 years and anybody who thinks they can predict 10 years is nuts. But what I will say is, we're organized in the way we go to market. We are organized the way that our P&L is run and the focus that we have brought to each one of those, and that focus has served us well. We feel really good about the benchmarks that are out there in dining and experiences. We think that augurs very well for the value that we are creating, particularly as we drive meaningful double-digit growth in those categories along with EBITDA and expand our EBITDA profile. What I would say is that I am very focused on the way that we can create value across the group. And I mentioned that we think there's tremendous value in experiences. And let me tell you why. We uniquely have multiple brands to leverage. One can generate tremendous demand and then do really good job leveraging AI to make the perfect recommendation. The other can help you go very deep. And being an OTA in experiences is an advantage against being a horizontal who's trying to add experiences. So we think the 2 of them together is very interesting. We also have the largest scale supply to leverage. We have a ResTech asset that we can leverage, and we have this incredible data asset to leverage. And we've been very focused on the U.S. consumer, and I think there's opportunity to think globally, we intend to be a global platform. So really excited about that. And so the -- when we think about the best way to organize ourselves, I mean, we're always open to adapting. We want to be optimal in creating the value. We're less fixed on having to have sort of multiple different units doing their own thing. But brands are important, and we wouldn't want to dilute brands. We want to use the brand for what it does best. So it's hard to say whether we'll be more brands, I don't think we would try to sort of force-fit all of these into one, but you could create opportunity through the collaboration.

Okay. Excellent. You've talked about the freedom of being sort of post the Liberty TripAdvisor buy-in. Maybe you can just give some more color on that. What are you now free to do that you couldn't do when you maybe were working through this ownership struggle. Maybe that's a bit too strong, but now you're sort of free of that. And I guess the other question we get is what happens to the Board here? Does this give you a chance to reshape the Board and does that give you some extra freedom as well?

Yes. So I don't want to overstate this point. We had a year of focus on this topic. There was a certain amount of distraction for senior management, although I will say that I'm really pleased we didn't distract our company with this. But there's a certain amount of effort that went into that. What this allows us to do is, number one, simplify our story because we had a certain amount of complexity, we had an overhang, we had a control shareholder. And certainly, there was a perspective there that we need to be thoughtful of. This allows us to think about a single focus on our strategic positioning, our execution. It does allow us to think about governance. Certainly, we're going to do Board renewal. We will absolutely bring new perspectives to the Board, and we think that is valuable. But there are some perspectives on the Board that were already here that we also think is valuable. But yes, it allows us to think about how to be an independent company with the governance that's appropriate and new perspectives to move faster. And then, of course, it simplifies our capital structure, and it makes it very clear what we can do around capital allocation. And so I think that's all very good. And then I just would say it removes a party that would have been outsized when we think about what we're doing. And I would say our management team is extraordinarily focused on clarity ahead that we can deliver on that vision and so that each part of our business can succeed and that we can create value together as a group.

I suspect this isn't a question you can answer very clearly. But obviously, we've seen when Liberty put out their proxy documents that there have been various bids for the wider group over the last sort of 12 months. Is there any renewed interest that's come past the transaction?

Well, the answer to that -- I probably should give to that is proxies can stand for themselves. From my perspective, it was great to see all the interest. I think that there are a lot of parties that see a lot of value in our business. I hope that is true among our investors who we cherish the relationship as well. We think there's a lot of different ways to win. And our focus has always been start with accreting value in your assets, be very focused on your strategy, execute to the best of your ability as quickly as possible, innovate leveraging the latest technology and the rest will take care of itself, and we truly believe that, and we feel really good about the opportunities ahead. There are multiple ways to win, and we're going to go after it.

Okay. Wonderful. Let's talk about AI. You mentioned it a couple of times. One of your peers, I guess, Brian Chesky kind of makes a point that the most common travel start-up is trying to do some kind of travel planner. And a lot of them don't -- they fail in that enterprise. What gives you the confidence that TripAdvisor can develop a sort of usable, useful AI-led travel planner?

Well, we're already doing it. And when ChatGPT came along, which was in my first few months on the job, my posture was, let's not try to go first and capture the headlines. Let's be really thoughtful about what's unique to us. And so our travel planning tool, which we call Trips, builds an itinerary and solves the cold start problem. And it leverages unique assets. It leverages our trust, it leverages the authenticity and provenance of real travelers who continue to come to our platform to sort of contribute content. And our job is to make it as easy as possible for them to do that, which we are doing. We're going to reimagine the way that people contribute. But those contributions serve as the corpus for our ability to make the best possible recommendations. And we can use AI, of course, to understand our logged-in users better and to segment those who come to our site to give them a better experience that can feel magical. You put that together with making sure that they're connecting to the right content, they have the right tools, but then have an iterative conversational experience on our site. And I think the trip planner will come together with an AI travel assistant that will ultimately be much more conversational. And when you append at the right moment, of intent, the ability to book, then it becomes really interesting. And of course, we can do that across hotels, experiences and restaurants. And you're seeing that pay off because we've seen tremendous growth in our planner, tremendous ARPU from those who are using it because they're multiples higher than members as a whole, which is multiples higher than the average user. So we are seeing monetization, and we're seeing engagement levels rise. We're seeing conversion levels high. And we think that as we scale that, but it's one effort among many to have a very engaged planning experience, holistic experience. But we're excited about the technology. We're leaning into it. And it's not just on TripAdvisor, of course, it's across our marketplaces. And it's not just in product, it's the way that we partner and it's the way that we make ourselves more efficient. So I think we're experimenting and learning and planning to scale as much as anybody in travel, and we don't think it's common at all. We think we bring a unique perspective. We think we bring unique content, and we think we have unique assets to leverage.

And those unique assets you leverage, I guess, probably would you say data, the kind of user-generated content, is at the heart of that?

Well, there's 2 parts to the data. There's the user-generated content where we believe that we continue to offer the highest quality body of travel content because of the way that travelers have always used us. We also believe that first-party data is fundamental. And of course, with that very large scaled audience at TripAdvisor, that is something that only we have, right? It's the intent data, it's the click stream data, it's the behavioral data. It's also data that people give us when they log in. It's our ability to use prompt engineering to get them to answer some questions. And of course, as they contribute to our platform, we know more about them. And imagine a situation where it used to be that you contributed and then you just -- it was one size fits all. Now when you contribute, we can make sure that we match the recommendations with your sentiment, with your experience, with what you really like. We'll also be able to understand, are you going on a business trip or are you going on a personal trip? Now we don't play big in business, but it's important to know that because if you're with your family or if you're with your friends, you might want to go golfing or you might want to go and have an experience at a park with your kids. So we're going to get better and better and better. And we're already seeing that happening. So pretty, pretty excited about that.

And so you've got your own AI strategy. You've also been a sort of -- found a partner with OpenAI, partner with Perplexity. Is there any conflict in doing that? Do you see that the strategies of working with third-party providers and having your own strategy can work alongside one another? And maybe how do you ensure that you're the one that leverages that data if you're sort of partnering with these other companies who have access to it?

Yes. So the first thing is I think you need to do both. We are going through a period with a technology that is generational. It's going to change every company in the world. Human beings are going to fundamentally adapt to it in different ways. And so we want to make sure that we are experimenting not only on our own products, but also in the ecosystem. I was really pleased that every platform in AI at scale really clamored and wanted to have a conversation with us. So we were very particular. But we were also very intent on experimenting, identifying who do we want to work with and to what end? What did we want to learn. Of course, there's a value exchange consideration, and we wanted to look and see where we would get value. But we're experimenting with Perplexity so we really understand AI-first search. And of course, we're doing the same with OpenAI. But there, we can also experiment with operator to understand where Agentic AI is going and adapt our products and services and shape the future of what it means to be a travel player in that space. And of course, with our proprietary relationships with operators and businesses, we don't think we're going to get disintermediated. We think the opportunity is to identify what that user experience is going to be with the players that are going to win and understand how to position ourselves there. And we are doing a lot of work, and we brought in a lot of talent to focus on that. And then we're looking at cross-platform and multimodal AI with Amazon, where we can start with voice and then think about photos and ultimately video and understand where our data is useful, but not our first-party data, where our POI data is useful. And that's what we're doing with Microsoft as we're sort of an anchor player in their AI data marketplace. And then we can understand how is it valuable to whom and for what. And you put all of that together and what we're in is, we're in experimentation mode, both on our platforms and off. And our focus is how do we position ourselves to win in the future. And from the conversations that I have, I think nobody has the final answer yet today, and maybe that's the Chesky comment. Nobody has the answer, not even Brian. But if you're experimenting, if you're influencing, if you're learning, when you see an opportunity, you can scale it quickly. That's what we intend to do.

Okay. Wonderful. Let's maybe shift on, make a run through the brands. Let's start with Viator, which I think is now the one you report first. Can you maybe talk about what you see as driving Viator's strong growth? What will continue to drive it? Is it travelers are doing more experiences? Is it online penetration within experiences? Are you taking share? Like what sort of drives the sort of outsized growth of Viator?

Well, it's all of the above. We have this advantage in having a demand generation platform that gives you all the things you could possibly think about doing, free and paid, in TripAdvisor and getting that working as effectively as possible and in tandem with Viator is valuable. Viator has the focus of an OTA. And we think in a category like this where the supply is so fragmented, we're creating that seamless booking experience is actually a very difficult challenge. We think having the focus of an OTA is very valuable. We also think the third-party relationships that we have and our strategy, which is different and we lead in to be there wherever anybody happens to go, we think that gets us access to demand without having to market and spend marketing to do it with partners. So we're happy to supply the OTAs, and we're happy to supply e-commerce and the offline travel agents to encourage offline to online. But of course, we also have tailwinds, right? We've got offline to online that is happening, and we think that continues to grow. We've got this incredible demand profile, which I think is durable about people defending experiences. And we have the focus that we're bringing in. And our goal is to be a comprehensive holistic global platform to bring that B2C piece with multiple brands, to bring our B2B prowess, and we think we're as good as anyone, if not better, to bring our ResTech asset to the table, to bring our partnerships to the table and to offer the best experiences platform anybody can find anywhere. And that's what's driving our growth, and there is so much opportunity ahead.

So I'm sure a question you've had a few times, but obviously, Airbnb has just relaunched experiences. And then we also had Booking, obviously talking up a sort of that's the next sort of quiver in their connected trip -- the next arrow in their sort of connected trip quiver. But -- and we've also seen Expedia adding experiences to their B2B suite. A lot of the other people getting involved in that. Is that just good for the category? And -- or is this additional competition? And maybe just your thoughts on competing with the new Airbnb experiences in particular.

Well, we think the interest in this category just validates how big the opportunity is. We also think there's room for more than one player. So we don't believe that it's -- one takes everything. We think there's opportunity here. And we also believe that being an OTA focused on experiences is an advantage, as I just said. We're happy to partner. There may be opportunities to partner with Airbnb. They've tried this a few different times. We watched it closely. And of course, we know them. And we think that it will bring awareness to a low awareness category, which is good for us. They've tried it a few different times. They're trying it in different ways that may be challenging to scale. But again, we think it's good for the category. We're also happy to serve Booking, and we're very focused on working with Booking. Because as I said, this is -- we believe when we work with partners, it's incremental to what we're doing direct and it's profitable. So we feel that, that serves our strategy really well, and we think that we have a unique strategy. So in the end, it's good for the category. But of course, it's also true that there will be new competitors, and we feel confident in our ability to compete.

Okay. Let's maybe shift to TheFork. I mean compared to hotels, sometimes I think restaurant reservations feels like a slightly odd place that you can't -- there's no one site where you can kind of see all of the availability that hotel restaurants choose a platform. Is that going to change? Is that what TheFork sort of aiming to be as a sort of a one-stop shop for all restaurant reservations within certain markets, maybe not globally?

Well, as I said, we're really excited about what's happening at TheFork. And we think the category is a good category for travelers. Travelers typically, when they think about what they want to do, they think about the experience that they want to have increasingly, that's the first thing they experience to think about. They think about where they want to eat and they think about how close is it to where I'm staying. So we think it's a good category. We also recognize that it is unique because it has a travel dimension, but it also has a local dimension. We do think being in Europe and being focused on Europe, multiple languages, multiple countries, we think that our focus on that region has served us well. And our strategy has been to deliver a B2C experience where we are making the best recommendations possible and getting that marketplace going. And of course, it's largely direct and mostly on our app. So we feel good about that as well. We have a lot of room to grow in Europe. Now do we have to offer every single restaurant? Not necessarily every single restaurant, but we have to have the right restaurants. We do believe that AI gives us an opportunity, and we're innovating. And I think this is very interesting. You can use AI now to serve restaurants and actually deliver bookings to restaurants that are not on your platform. And that can be a new and highly efficient channel to convert them to be on your platform. That's very interesting not only in Europe, but outside Europe. But what's also really exciting is that we were primarily driven by B2C in the past. Our technology and platform investments have been around getting our B2B or software to come up to speed. And we now think we're at par or better, and we are seeing tremendous growth, in particular, to the restaurants who want to come on to our paid software platform. And we think that is an advantage to have B2B and B2C working together. And I would just say, when brands like Vodafone and Mastercard come to us and say, "You know what, we really want to work with you in Europe," it's becoming clear that our European position is strong and getting stronger. We're delivering double-digit growth with EBITDA, and we think that we can expand our EBITDA margins there. So we're really excited about the value that's being created at TheFork. And we think it's one -- I would also just mention in Europe, there's no OpenTable, there's no Resy, there's no Yelp. You've got TripAdvisor and TheFork, that's a pretty good position to lean into for the future.

And in the past, I guess TheFork has entered new markets and being acquisitive. Is that a potential trajectory to rejoin? Are there other markets that could be interesting for TheFork to go into?

Well, look, we've got our focus on Europe. We think there's a ton of growth left in Europe. And we think that Europe can be defensible for us. Actually, we've pulled back from some far afield markets since I've been here and to focus on Europe. But as I said, I think technology allows you to think about new markets in different ways, more efficient, interesting, different, highly productive go-to-market, and that is something that we're innovating with. So watch that space, more to come. But we're very focused on getting growth out of Europe, and we will not get distracted from that.

Okay. Makes sense. Now let's shift to brand TripAdvisor. I guess when I'm out talking to investors about the TripAdvisor stock, stabilizing brand TripAdvisor often seems to be the thing they're most looking for. If we look at the sort of revenue decline we've seen, and it's got better, I guess, at Q1, it wasn't as bad as it was a couple of quarters ago. How much of that is your strategy? You've sort of switched off a couple of the businesses, focused more on hotels. You've changed the way you've sort of distributed experiences and dining. So how much of it would you say you've been driving some managed decline within brand TripAdvisor versus this is sort of external challenges?

Well, it is exactly the strategy to think about how to take this audience that trusts us and which has been durable over time and monetize it more effectively. And so what you've seen us do is to focus on what do we need to do around our product to attract and engage and get people coming and really focusing on that? And we've shared KPIs that show that the strategy has paid off. I think what's really interesting is that the product work can stabilize hotels, and we talked about how the work on Meta is actually getting people to engage longer, delivering a higher-value customer to our partners and pricing is benefiting from that. It also allows us to cross-sell and engage while they're on the site. So that feels good, and it feels like there's more opportunity there. But the strategy is deeper than that. The strategy is about getting more people to come direct, to go into our app, to deliver that membership experience. And then, of course, to be cross-category, accelerating experiences at TripAdvisor is going to be an important part of this and working with Viator to do that is something that we see opportunity ahead. And then thinking about how to bring AI to the center of what we're doing and get the value out of AI for a guidance platform. So we feel good about it. And of course, this is a well-understood problem what's happening in our legacy business. And I'm sure that everybody in this room understands that going back to 2015, this has been an understood problem. It's just that we had an aberration in there in 2020, which changed the directory -- caused a dislocation and then things came back. But we always understood that this was going to be about doing that transformation work that the legacy wasn't the future. And we feel like our strategy is one that has the early indicators, the early signs of payoff, and that's why we're being very thoughtful about how to start to think about scaling that. I will say with a business like TripAdvisor, this stuff does not happen overnight. And so we're 2 years into that strategy, probably by the time we got it set and going. It probably hasn't happened as fast as I would like. And we are very focused on where do we want to narrow our particular effort to drive the biggest opportunity, and that's what we're focused on. And I think that will serve us well with TripAdvisor.

And I guess in the past, we've talked about brand TripAdvisor maybe having 3 monetization strategies with Metasearch, B2B, display advertising. Maybe you can talk about where you are on the strategy on the second and third of those? You came from a background of a digital marketing company. Where are we in the sort of potential for TripAdvisor to make money from brand marketing?

Well, the B2B business is one that about 1.5 years ago, our focus was it felt like our go-to-market was not as efficient as it needed to be. So we wanted to shift towards self-serve with B2B restaurants and hotels on TripAdvisor. We've been on that journey. It's going as we expected, and that allows us to focus on the things that I've talked about previously. So that's an area that we will think about how do we deepen those relationships? How do we think about a category-focused B2B, leveraging certainly on the hotel side, but also on the restaurant side where we have an asset and a talent with a lot of experience in B2B that's going really well. We think there's some interesting opportunities there. In terms of media, I do come from a background leveraging media, I think media businesses in general are going through fundamental transformation right now. What we have that's useful and gives me great confidence is the data asset. We've got a platform, which is an audience of scale. As our engagement continues to progress, we do think there's an interesting media business here. I wouldn't say it's the first monetization profile. I think in many ways, the transformation of TripAdvisor and many -- and maybe even TripAdvisor Group, which includes all of our businesses is one from being kind of a travel-focused media business to being a business where experiences is at the heart, and we're shifting to marketplace economics. And I think the shift to marketplace economics is a very valuable and durable shift. And you can see it in the diversification, not only what we're seeing inside of TripAdvisor, but the portfolio. As a whole as revenue and EBITDA continue to rise at Viator and TheFork, you can see the way that the marketplace economics can work. Connecting that clearly to TripAdvisor is a strength for the future for us.

I mean you sort of talked about the sort of transition of Metasearch. Is your view that it has a long-term future? So there is a role for hotel Metasearch within the travelers' journey over the next decade.

Yes. I think this product is an important product. I think that while I wouldn't say it's the future growth driver, it can have a long life. We can optimize it, and we've already shown that we can do product work that improves it. Of course, that business is going to be a function of what's happening with demand, what's happening with the product work that we do and the quality of the audience that we deliver, and of course, our bidding dynamics. And we are very close to our partners in that space, both the large OTAs, but also the independents who use us in that product. And we work with them carefully to make sure that we are delivering highly -- converting high-quality audiences. They can measure that very carefully. We understand their ROI objectives, and we can deliver against that. So I do think it has long life, but it's a business that is part of a portfolio. And I think it can fit with booking of a segment of our audience, and we've said it's in the app. And I think that they can work together. So we think that TripAdvisor -- the future of TripAdvisor and the slowing decline that you've seen, and we expect that to continue to slow and the return to growth, modest growth, and EBITDA advances will be about that portfolio working well. And that's what we're working on, and that's what we've expressed our confidence this year in.

And you see -- I think you've guided, you expect 2026 to be the year where it can stabilize. What you're seeing in sort of KPIs gives you confidence that, that will be the case?

That's what we've expressed publicly, and that's what we're working on. And of course, as we think about our portfolio as a whole, understanding the role that TripAdvisor plays in the portfolio; understanding the experiences, growth and value driver; understanding how dining works, we think together, these will work well.

So I guess a cynical view might be that some of the strategies that TripAdvisor have been tried before. We had instant book in the past. Now we've got direct book in the app. You've talked about going back into loyalty, that was obviously something that created huge excitement under your predecessor a few years ago, and that was a different loyalty program, obviously, a sort of paid loyalty program. How are you modifying those strategies? Why does direct book and loyalty work today that hasn't worked in the past?

I mean we're approaching these very differently. When the company had approached a direct book in the past, it was more a motion to try to become another OTA. We've been far more focused on segmenting our audience and bringing to them what they're looking for. So the audience that we're getting to book hotels has a much higher intent. They're coming to have an integrated planning and booking experience, and we think we can deliver on that. In the past, it was instead of that Meta offer. Now we think we can do it in a very compatible way. In the past, it was we're doing this and hopefully, the ecosystem will come along and they didn't. We've been far more attentive to how we fit into the ecosystem [Technical Difficulty] operators about what we're doing and among, of course, the -- our partners in Meta around what we're doing. So it's far more attentive to the ecosystem. So I think it's very different. The other thing I would say is that what we're looking at with membership now is nothing like the subscription product of the past, which I don't know that I would call it a membership or loyalty product, it was a subscription product, which was a good attempt and interesting idea and something that we've chosen not to pursue. But what we're looking at now, which we think is really interesting, is a free membership which really understands how to reward and create repeat behaviors for those who are coming and booking across categories. So you can have a single wallet across categories. Your rewards can be across categories. Maybe even the membership could cross brands if we decided that, that was in the interest of the consumer. And so that's very, very different. And the other thing that I think is really interesting and exciting is it's not only rewarding, I think, kind of earning and the ability to burn rewards, but also as members of our community engage, take certain actions, contribute to the platform, giving them not only the best experience, but rewards for that activity and I think that will be unique in the ecosystem. We're going to launch a discrete set of products this year on this topic, and we're pretty excited about how it enhances the app, the member experience and ultimately, the engagement and monetization.

Okay. Two more, I want to try and squeeze in. I got to take this one from the audience. I'm just going to widen out a little bit. But obviously, you're trying to become a trip planner, the Trips app. To what extent does that mean you need to add other verticals onto the platform? And this particular question says, would it be wise to include Lyft and Uber advance bookings within your product set?

Yes. I think there's tremendous opportunity to think about who our strategic partners for the future are going to be. We've been very focused on what we think are the most interesting categories, which is experiences, hotels, restaurants. But certainly, there are opportunities for us to partner with. Partnership was not something we had done a lot of in the past. I think we are getting better at. You can see us in AI partnering, I think, effectively so far. And there are lots of opportunities. I think the logistics and the rideshare and perhaps even the food delivery, all very interesting categories, good question. And then we can think about other categories, too. And I don't necessarily want to do a laundry list, but we're pretty active and have lots of conversations. What we want to go after, we want to not get diluted by trying to do too many different things, but be really focused on which partnerships would serve the strategy that I articulated. That's where we're focused.

And then maybe last question. The changes at Google, we've seen in Europe with the DMA sort of cut Google, downsize a little bit. We talk of anti-monopoly rules in the U.S. Are these a turning of the tide for TripAdvisor? Or are these going to be very helpful to your trajectory from here?

Well, we don't rely on regulatory for our strategy. We want to focus on how do we differentiate ourselves and what do we have that's valuable. What are we able to do that a competitor like that can't do. And so that's where we're focused. We also want to be engaged with partners in the ecosystem to make the most of those partnerships. And of course, if regulatory comes along, we'll take advantage of it to the best of our ability. We're always watching and adapting. I think we're very good at seeing the change and adapting to it. But we're going through a period of time where there is an unprecedented opportunity to position ourselves for the future, and that's what we're intending to do with our vision very clear in our mind and the way that we create value together against that.

Okay. Well, with that, Matt, thank you very much for your time today.

Thank you. Appreciate it.