trivago N.V. (TRVG) Earnings Call Transcript & Summary

[Audio Gap] Furthermore, please note this call will not be recorded. We are pleased to be joined on this call today by Johannes Thomas, trivago's CEO and Managing Director; and Robin Harries, trivago's CFO and Managing Director. The information presented by management today, including responses to your questions, reflects management's views as of today, Monday, February 24. Trivago does not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to trivago's fillings with the SEC for information about factors, which could cause trivago's actual results to differ materially from these forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in trivago's operating and financial review, which is posted on trivago's Investor Relations website, ir.trivago.com. As always, you are encouraged to regularly visit trivago's Investor Relations website for important content. And finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period. Having said this, let me hand over to Johannes and Robin.

Yes. Hi, everybody. Thanks a lot for joining today. I think there are good reasons and deep insights we want to share with you today. I think trivago is a big opportunity in a big attractive market. We have done a lot of groundwork and happy to share more about that. Before we go into the presentation, I would like to share a bit about us as a new leadership team. We joined at the -- in Q2 2023. So starting with myself, I'm Johannes Thomas, CEO of trivago. I have spent a decade at trivago before the pandemic. I've spent a lot of effort into building teams in marketing, in product, in partnerships in the B2B space, in tech. So when part of the journey of building trivago from below 100 people to more than 1,500 people, been part of the management, bringing the company to IPO. And during the pandemic, my contract has ran out. We had consolidated the company after a near-death experience, and that was a good point for me to leave as well. And then at the beginning of 2023, one of the founders and a big shareholder of trivago called me and asked, "Would you consider come back to trivago? And would you consider to come back with trivago with a chance to build a new leadership team and bring back some of the people that have built trivago in the first place?" And very mindfully, Robin, together with Jasmine, our CMO today; Andrej, our CPO and CTO today, we have been spending time together, how do we look at travel, how do we look at trivago and we made the decision to come back in Q2 2023. Robin, a little bit later. But I think what we brought back to the company was what is the blueprint that had made trivago successful, a very data-driven approach, entrepreneurial approach, rapid learning, fast execution in the center of our doing. And I think in the course of the presentation, we will highlight a few things that substantiate what we have been doing in rebuilding the company. So we've really been more than almost 2 years now of groundwork behind us. We've invested into long-term initiatives. And I think we are now seeing fruits. We have seen underlying trajectory that was very positive. And every quarter, we reported on it, what happened under the roof. And we have now, last quarter, started seeing growth. So the underlying trends hitting our top line. And now we also highlighted this year, we expect a strong, at least high single-digit growth. We see strong double-digit growth in Q1. So we are really at a turning point where we have worked very hard on. I think overall, trivago is extremely well positioned. It's one of the biggest markets that exist, 1.5 trillion in size. The hotel market of travel, the segment is more than 5 billion in size. Our market share there is less than 1%, while we have one of the biggest brands in the world. Trivago is well known in North America, South America and major travel markets in Europe, Turkey, into the Asian region where Japan is one of our biggest markets as a company, U.S. being the biggest market for trivago. So a really international company, well positioned in terms of brand. And then you all know the cost pressure that has hit consumers over the last years. Travel has become very expensive. People say, apart from security, price is the biggest struggle around travel. We deliver on price. We have people save time and money. People can save 40%, up to 40% with us. So a proposition that we think is very highly relevant, we see great deals on the market and we make them easily accessible for consumers. Then we always get the question, do we invest into growth or do we focus on profitability? If you look top line, we are much smaller than where we have been before pandemic. We have strong efforts to regain size as it's important in travel to have a good size in a big market. And as long as we see high elasticity in our marketing, we will continue to investing into growth and then gradually turn into more profitability over time. That's maybe as a starting, outlining trivago, us as a leadership team, we're very excited that we came back mid of 2023. We are very excited what we are now seeing in terms of numbers and the trajectory. We think we can continue to demonstrate over the next couple of quarters. And with that, I would suggest we jump into the slides, and Robin kicks off with a general overview of the business. And I will pick up later and share more about the strategy.

Yes. I'm Robin. I'm the CFO of trivago. I'm going to talk you through the -- our investor presentation, which is also uploaded within our Investor Relations section. Okay, disclaimer. So first of all, here are some numbers to our Q4. As you can see on the left-hand side, in Q4, we had a top line revenue growth of 3%, and this is an important step for us because this is the first time that we can show revenue growth since Q1 '23. We believe that this is a turning point for our business. And we were also happy about the bottom line. We had EUR 11.1 million adjusted EBITDA, which is a margin of 11.7%. In '24, we started initiatives that are still ongoing, and we believe that we are on the right track. Johannes has just mentioned it. We have a -- for the outlook for the full year, we expect at least high single-digit revenue growth and at least a breakeven adjusted EBITDA bottom line. The start into the year was very strong. We had, in January, we had strong double-digit and revenue growth in all 3 segments, also in all marketing channels. This was a very strong start. This was stronger than expected in terms of top line and bottom line. And the strategic initiatives that help us to fulfill our strategy are, for example, brand revenue, our brand marketing. We, trivago, became big in the past through aggressive brand marketing campaigns. And for example, 2017, we had TV campaigns running in 50 countries at the same time. We were -- we started relatively early, and I think it was 29. And then we developed internal tools that allowed us to scale TV advertising and brand marketing like other company scale, performance marketing. So we really look at direct response. We look at the spot performance. We looked at brand after effects. And that helped us to grow very strong in the past. And we started it again in the end of '23. And over the course of last year, we rolled out in over 20 countries. And Jürgen Klopp became one of our presenters. At the moment, we have TV campaigns running with them, for example, in the U.S., in Canada and U.K. And so brand marketing was a driver, revenue driver #1 in the past, and it is still one of our revenue drivers, and we are going to further scale it. Besides the marketing push, and it's also important to further improve the product, we have made significant improvements here in terms of user experience, in terms of conversion rates and in terms of the quality per lead that we deliver to our partners, to our advertisers, which are in direct hotels, and hotel chains or online travel agencies. And we believe that the product today is stronger than ever. We also use a wide range of AI within our company. So for example, our TV sports in the past, we had TV campaigns localized in over 30 countries. We had localized versions, for example, in Korea, in India and China. And also in most of the countries today, we have one presenter or just a few presenters. And then we use AI to do the lip sync, so that we only have 1 presenter that cost us a lot of time and a lot of money. Besides this, we just introduced our AI Smart Search, where users can go to our website and then search not only for a destination, but really can type in specific search request. And we also have our -- when you go to our product, we show the -- we show the fully AI-generated hotel highlights, where we provide more information about the hotels. And besides this, there are many, many tools that our employees use frequently. And we believe that we have been cultivating a performance culture and that we are, where we focus on delivering results and that we are on a way, we go track here. And I think this can be also seen in our ambitious outlook that we want to outgrow the market and achieve at least single -- high single-digit growth this year and then double-digit growth in the midterm. Trivago is a hotel price comparison, hotel search. We have listed over 5 million accommodations, which are hotels and alternative accommodations. We are in over 50 countries. We have over 50 localized websites and apps, and we have around 600 employees. We deliver many, many visits to our partners. We generated last year EUR 461 million and generated EUR 10.2 million adjusted EBITDA. On the left-hand side, you can see markets, where we have strong unaided brand awareness. So trivago is a global brand. It's one of the best known travel brands in the world. So we think that we have everything that we need to further scale trivago and to come back to success and to strong growth. Here, you can see an overview about the total revenues from the past. So we were growing very strong until 2017, where we reached over EUR 1 billion in revenues. In 2018, 2019, there were some marketplace adjustments on our marketplace, where advertisers a bit down a little bit and went more for profitability. But overall, when we look at 2019, we generated over EUR 800 million revenues. And then, of course, COVID hit trivago, the company went into survival mode. And after, directly after COVID, we kindly missed a little bit the opportunity to scale brand marketing, investments again. But since the new management is back or the old new management is back, so we have been starting this, since the end of '23 and scanning this. And we believe that there is a lot of potential to come back to old revenue levels. And when you look into the graph, you can see '24 was EUR 461 million and '29 (sic) [ 2019 ] was over EUR 800 million. And on the right-hand side, you can see our global distribution of referral revenue. You can see that we are a truly global business. Developed Europe and Americas are almost same size, but also Rest of the World, 20%. Our strongest market is not Germany, it's U.S., followed by European market. And then as Johannes mentioned, Japan is also one of our top markets. Besides the -- like as I said, we believe there is potential to increase the revenues, but we also think there might be potential in the stock price. When we went public, the stock price was $55. This was in 2016, our market cap was over $3 billion. One year later, we reached our all-time high. The stock price was at around $120, and we had a market cap of over about $8 billion. In the -- like in the end of November last year, we had a stock price of $1.62 and a market cap of around $110 million -- EUR 110 million, which was the money, the cash that we had in our bank account. In the end of the year, the stock increased a little bit. And after the last earnings call, we saw a further increase. So at the moment, we are slightly before $4 billion -- slightly before $400 million. But if you consider that we had -- that we said that we had over $130 million cash in our bank account in our last earnings call, the market or the enterprise value is still very low. Our investment highlights. We are in a very attractive market. The travel market is huge, it's growing. So you still see shifts from the offline segment into the online segment. Last year was an all-time high. This year, nice growth as expected. And we believe that we have a highly relevant product. It's stronger than ever. Our users can save up to 40% if they come to trivago, compare prices. We see that we have more deals out there than pre-COVID. We see that also small advertisers and really have good deals, and we compare many, many hotels from many, many partners worldwide. And we are a leading global brand, leading travel global brand in the most important core markets except China. And as I've shown you, we have -- we believe that there's a nice profit potential and also a nice growth structure ahead of us. And we believe that we already demonstrated that we know what we have to do, and that we will reach a turning point, I think, is -- was one step into the right direction. When you look at trivago, you have travelers that want to book a hotel. You have some that go directly to the hotel chains. You have some that goes through OTAs, online travel agencies like Booking.com, Trip.com, Expedia. You have some that go to Google and you have some that go to us. We believe that we are very well positioned through our massive brand marketing. We reach out to users when they have a need. So they come to trivago, they search for hotels and then we forward them to like the OTAs or directly the hotels, and we also work together with some of the hotel chains. And the market, as I said, is huge, and we believe that the market opportunity is a $500 billion market, that's the hotel segment. I think it's a very interesting segment, it's the second biggest in the entire travel market. And when you look at research, you see that price and value is always super important for users. So when users, our customers book a hotel, they want to get value for their money. They want to compare deals, they compare deals. They want to really get good prices. And this is actually what trivago is about. You go to trivago, you search for a hotel and we show you the different rates that are out there, and you have the chance to really get a great deal. Trivago is a marketplace, which brings together demand and supply, demand. We do a lot of marketing activities. We do brand marketing. We do performance marketing. There are not many companies out there that have spent so much brand marketing like trivago for a single product. We believe that the key to success is brand marketing. Of course, we also do performance marketing like Google display marketing. But the biggest value, we see it in brand marketing. This helps us to bring traffic to the website now and also to create brand baseline and increase the brand baseline, which helps to build the brand. And if you have a strong product and you reach users and they come to your website, they experience a product, they like it, they come back over and over again, and this is actually the baseline. And so therefore, our focus is on building the baseline on investing into brand marketing. Then we have our product, which we're continuously improving. We can see this in the conversion rates. And we then -- if you just click on the website, on the partners, on the prices, we deliver them to our partners, which are all the big brands like Expedia, Booking.com, Priceline, but also many regional and local players. We also work together with the big hotel chains like Hilton and Marriott. And we also have our own booking funnel. This is trivago Book & Go. For example, if you go on trivago.com, the U.S. platform, there you will often find also prices that are offered by trivago Book & Go. So this is operated by an OTA, by Holisto, but the users are feeling that he books with trivago -- on trivago, and this allows a very good user experience or this leads to very good user experience, too good conversion rates and a good marketplace experience. I mentioned it that trivago is one of the leading travel brands in the world. Here, you can see an overview. In many, many countries, we are #2. There are even 2 countries, for example, Brazil and Mexico, where trivago is the strongest brand. And even in the U.S., which is like a very big market, even there, we have a quite good position. So in almost all core markets, we are very good positioned. Yes. So here, you can see, again, the revenue development of the -- over the last couple of years and also the ad spend. And as I said that the investment into brand marketing has been a revenue driver for trivago and is still the revenue driver. You can see at the lower graphic that in 2024, so last year, we just spent half of what we spent in 2019. And since we see that the returns of our brand marketing campaigns are good and are successful, so this is a driver and this is the way how we want to scale our revenues in the next years by scaling our brand marketing investments. And there is room to further increase the investments. We can see it, you can see it here. And by doing this, we will increase the baseline and expect that this will also lead to higher revenues. Trivago, sometimes, I hear or sometimes people ask me, investors ask me, okay, can this business model earn money, because our adjusted EBITDA margin for '24 was just 2%. I always give a clear answer, and which is yes. So trivago was started in Germany and became then super profitable in Germany. So we took the money, the profits and invested it into as a European expansion into the other European markets. And we became profitable in Europe. And again, we took the money and invested it into the U.S., we invested it into Asia. And that's the reason why we could expand into 53 countries worldwide. But we, in our most mature markets, we have nice profitability and nice margin. And this is actually that you can see in the graphic below, and this is one of our biggest European markets, one of the mature markets. And there is an example from 2019 pre-COVID levels or the level we always compare to. And there actually, 2 things are important. First is the local contribution margin. So you have your revenue, you deduct all the marketing spend and then you have your contribution margin, that was, in this case, was 35%. Then we have a little bit other revenue. And then you have your overhead costs and these were, in 2019, went 17%, so that overall, the margin was 20%. If you look at the upper graphic and from '24, you can see that the overhead cost was 23%, are relatively higher because the revenues are lower. So that means that if you grow the revenues, the relative amount of overhead costs will be smaller, and this will be also one way to further increase the margins. But it's not only the margins, it's also the ROAS. And here, you have an overview about the development from 2019 until '24. And when you look at the overhead costs in 2019, so we spent EUR 145 million for overhead costs. And in 2024, it's just EUR 105 million. And we believe if we come back to the pre-COVID revenue level of around EUR 800 million, we will have much lower overhead costs in 2019. So the company today is much more efficient, where the head count is much smaller and much more cost efficient. So we believe that maybe we have -- we will save like many millions here, which will go directly into the margin. This is one effect. The other effect is that through further investment into brand marketing, and we saw this in the past. For example, in 2017 to 2019, we could increase our ROAS from 115% to 134%, and we believe the more we invest into brand marketing, the further we will also increase the ROAS, which will lead to a higher contribution margin. And then if you see like the lower overhead costs, this will overall lead to a healthy margin in the mid- to long term. So now I would hand over to Johannes.

Good. So let's look a bit deeper into our strategy we think will deliver growth in the medium and long term. You can basically see what we saw on the illustration before with the mobile phone. On the left side, you have marketing. We capture demand with marketing. On the right side, we have partnerships. We are aggregating supply through our partners. And then in the middle, we have our product, hotels, the hotel search pillar. And we have 5 guiding lines or strategic objectives, you could call them. The #1 is brand. So rebuilding our brands, continue investing in it. I think Robin talked about it. I wouldn't elaborate much more on it. We're investing in any kind of brand marketing. But importantly, we invest on brand marketing, where we can clearly measure returns. So we are an extremely data-driven company. So we have -- whatever we invest, we want to see a direct response. And then we have per market with proxies of when do we get the money back. And that is nothing we have long term -- long-term expectations on and a very tangible time frame, we want our money back. And if we see that in a marketing channel, we'll continue investing. If we don't see that, we don't continue investing. Performance marketing is also part of the game, but it has a secondary relevance for us. We're very disciplined because where the contribution margin, where our profits are coming from this brand, we invest this year, and we have compounding effects over many years. Whereas the performance marketing through Google, for instance, the stickiness of users tends to be much lower. Then we have search, content and deals. These are 3 strategic guiding lines that we have, we follow on our product. Build the best search experience, where we're just improving our core product. If you look back when we arrived and where the product is today, it's a very different product. The company has gone through a 3-year back and front end migration during the pandemic that resulted in the product having actually less features, functionalities and weaknesses that we didn't have before, which is often happening after a tech migration. So we have approved the product a lot from images to price accuracy to AI features, we have added to our product, which I will touch on in a bit. I think that delivered a much better experience. And if you use trivago compared to others, I think you will see that we have a nice elements and features that others don't have. I think the core thing that guides us is simplicity. So we don't overwhelm people with content. We try to give you distilled insights that are very important for decision making, which is the content pillar that we have in the middle. We are aggregating, we are distilling and giving you -- showing you what's really important and not overwhelm you with thousands of reviews, unless you really want to. And then we have deals, which is very elementary for why you use trivago. The first 2 is more save time. We make the search across sites much more simple. We have hotels that -- some that we have given you the full view on hotels. We give you a full view on availability. One booking site you might have a room available, another booking site doesn't. And then the price comparison deals, it's really who wants an exact same room, has many different prices. We aggregate it and display it to you in a meaningful way. Our initiatives below it, most of our value comes from core feature improvement, features that our users face in any search. They can be in the images, how we are displaying, how the AI highlights. Every little touch point needs a lot of attention. So it's a very smooth search experience. And then we have a focus that we already last year had was around member proposition. So getting people to log into our platform and the biggest asset we have, we can show you even better deals, if you're logging in. At the same time, you can save your hotels and share lists with other people. So there's proposition, an extended proposition we want to build and customize, if you are logged in as a member. Personalization happens not only when you're logged in. We have launched initiatives over the last couple of months that have demonstrated a substantial conversion improvement by personalizing search results, get to that and with AI initiatives that deliver into the product as well. Then on the partnership side, a big topic was trivago Book & Go -- is Trivago Book & Go where we have invested into a company, a tech provider that provides a booking engine and powers our Book & Go product and also enables other partners to join this booking funnel. And the idea is that you can book on -- can choose most options to book on trivago, especially if you use our app or if you are a member. Then we have Smart Bidding where we support smaller partners that have not so much data and being more effective in our marketplace. So let's go through a few points. We have talked about Jürgen Klopp. He is live in many markets. We make him speak Japanese, we make him speak French, we make him speak Italian through the power of AI, which is a technology we started leveraging. I think our first AI campaign was the end of 2023, amazing, great cost savings. At the same time, we can make him talk different things so we can explore and test out different messaging to our user. So a great campaign, promising results, very happy how we started into the year with Jürgen Klopp. We have talked about implementing a performance culture and a culture that focuses on learning and execution. And that was one thing coming back to trivago that was really different than before the pandemic, and there's probably many reasons why that's the case. We have seen the company becoming more thinking and less doing. So an entrepreneur spirit of we have a hypothesis, how do we throw it in front of users and not sit in a room with many people thinking what could be right, what's the minimum viable product we could deliver, put it in front of people's usage and then understand whether it creates value. We have multi-folded the amount of tests on our sites. So you have hundreds of tests over the course of the year live. I think at the same point in time, with 50 to 60 different versions of trivago out there, and we constantly see what actually creates user value and what doesn't, and that at a scalable global way. So this, I think, is a strong emphasis on how we have been able to execute faster, get the teams to deliver faster and have higher ambitions we hold them accountable to. And this has resulted in -- maybe I jump to that for a second, in much higher conversion rates, which we also demonstrate here. You can see the conversion rate is basically how many people come from trivago and book on the partner side. And you can see that this has gone up a lot, I think, around 35%. So the likeliness that the user books on the partner side has increased a lot. And the best proxy for what people come back is conversion rate. So if we build a better product and convert users better, that means they have a better experience and they have a higher likeliness to come back and a higher likeliness to talk about us. So conversion rates came up a lot, which strongly correlates with the amount of tests we have done. What have we changed, maybe a couple of feel -- a bit of a sense on what direction we have been testing. We are about deals. I think it was rather difficult to find deals on trivago, if you think about 2 years back. We have highlighted deals, identifying them and show them to our users. What I'm very excited about is the one you see on the right side, member-only deals. So we give you strong teasers why you should log in and that we build a strong relationship with our users, if they are logging in. And apart from that, we have all kinds of deals more visible to users. I talked about content and how we have polished the way we distill content. This, on the left side, was in 2023, which was decent. But on the right side, you see a much more rich experience. On the top, you see our AI highlights, the good to know, where we give you a really distilled insights on what's important to know about this hotel. And you not only see it in the slide out here at the bottom, but also on top where you see the big image. You see in the middle, you see what's particular about the hotel. And that's exactly where we want to help the users to take a better decision. You will not find this on any other website to their distinctiveness, you have it on trivago. You might have -- it has free WiFi or it has a pool or so. But what makes the hotel really unique, that's what we're trying to point out here. We have much more features in terms of search options. You can have more than 25 additional filters on trivago. So very detailed way of searching. We used to have that. We didn't have that in 2023 anymore. We brought this back, so a big spectrum of filtering on trivago, which is very important for conversion rate. Then you can see how we have boosted our member sign-ups. So the amount of branded users that come to us. So they come to trivago directly, how many of them log in. We have almost doubled this part of the traffic. We've almost doubled this ratio. So that will continue a focus for us. How many people are logged in is that, for us, is another proxy for who is a core user for us. And if you log into trivago, you have a different experience. We can be even more deal-oriented and build a custom experience for those users so they have a stronger log in to our platform, which is important for profitability in the long term. Then with personalization, I touched on this. What this basically is we look at what have you done on trivago, what devices are you using, what's your search context, and we are adapting the search results based on that with really fantastic results on conversion rates. It makes a big difference. What hotels we are displaying. This is AI-powered as well and machine learning that is getting smarter and smarter over time. We're putting more parameters into the model and improve the way we are delivering a good experience to our users. AI highlights and AI search, we have also touched on this. I explained the right side. If you look here at the left side, you also don't find this with any other website. You have a free search experience. You can type whatever you want and get relevant hotels as a result. In this example, luxury hotel with Burj Khalifa view. So it shows you here, now in the search results, you see already some AI highlights on the left side on the item elements, and on the right, you get an explanation why this hotel is relevant. So this new way of searching, we are putting gradually in front of users. We don't expect this to be a step change. It's rather users gradually adopting new ways of searching and we have already new test live, where we show traditional search and the free search, free or natural language search next to each other. I think what's important here, I'm skeptical whether for a hotel search, a chatbot experience or a Gen AI experience in a chat UX is the right way for travel. What we do instead, we give you the functionality of GenAI in trivago so you keep your basic user experience that people are used to, to explore hotels instead of then getting 3 hotels that you don't know exactly whether that's relevant or not. So this is a direction we are excited about for how we are leading the field in AI, and we are working with market leaders like Google on innovating and pioneering what they can do actually and what we can do. So we talked about conversion rates. Conversion rate is good and an important indicator for how happy are users on trivago. I think with a much better product, that is demonstrated here. At the same time, our partners get better leads, higher-quality leads, which we see turning into higher bids in our auction marketplace as well as being more happy overall because we deliver them higher-quality leads. Our marketplace is basically back to -- like it goes back to pre-pandemic levels. So more 2029 (sic) [ 2019 ] during the 2022, you can see that booking at times had a very high share in the marketplace in 2022 Q3, it had more than half of our marketplace was coming from Booking, which we think is an unhealthy balance. You now can see that basically, this is back to where it has been before the pandemic and the trajectory is healthy. So we are at a marketplace that we think is a good place. We introduced a second price auction in our marketplace in the course of this year, which has been part of supporting small players to reduce economic risk on trivago and to bid more aggressively. Trivago Book & Go, just to give you a demo here. You have seen this or we have talked about it, Robert and I, you have an experience as if you would be booking on trivago. This is an effort that's connected to our member experience as well. We want users to have an option to book on trivago, especially the deal option. So you can see, even on this side, you have players like Clicktrip that nobody has heard about. We want to aggregate this player into our trivago Book & Go product and make you -- give you the option to book on trivago. We know this elevates conversions a lot, conversion rate a lot for our partners, so partners that participate. So instead of booking on their side, they book on our facilitated booking interface, and they will get better conversion rates, and that's good because they become more competitive in our marketplace and can get a bigger share of the pie. So this is not only good for our partners, but also for our users because they have a more consistent experience. So you don't go to different sites and need to sign up there. We give you a smooth experience. You could see it as being a hybrid experience between a meta search or search versus an OTA, yes. So we are something in between. And if you are, as a member, we want to give you more convenience at the general direction. I think that's it for our presentation. Overall, as a summary, I think important, we are well positioned in a big market. We have heavily invested into brand, which we see returning and returning growth, sustainable growth, and we are seeing much better product that we think will deliver a higher retention and satisfaction with our users. That is the general direction we will continue, and we see a lot of room to further invest and develop our product in that direction. And with that, we are happy to take questions, I assume.

Yes. Thank you so much for the insightful presentation and to dive into your numbers and strategy. [Operator Instructions] And we have already first virtual hand from Tom.

Great. I guess just 2 for me. One, the chart on conversion rates showed a pretty dramatic kind of improvement there. I would just be curious to hear your view on, I guess, are you sort of tapped out on conversion rate improvements? Like any sense kind of maybe where you stand versus some of the other kind of best converting sites in the category? And then a second one on Book & Go. Maybe just talk a little bit about like the relative unit economics or profitability of traffic that kind of goes through that funnel versus just the core meta auction? And how big a focus is -- I mean, like is Book & Go like a big kind of increasing focus for you guys? Or is it always going to, I guess, maybe be secondary to kind of the core marketplace?

So maybe on the conversion rate, we don't think we maxed out on conversion rate at all. I think it shows you of the -- we're just 1.5 years in and show you a conversion trajectory like this is we have taken low-hanging fruits. I think easy quick wins, we have taken, but we continue to run dozens of tests at the same time. You can see core feature improvement still being part of our strategy map. We think that about half of our effort will continue to go into core feature improvements. And we see, on a weekly basis, accepting new tests with indication of conversion improvements. So this is not tapped out. It's very hard to understand where we are compared to peers but we think there's a lot of value to be unlocked in terms of conversion rates, and that we are making our product more sticky as well. I think what this is closely connected to is trivago Book & Go. We can see if our partners and rather the websites that have a less known brand, they often have a better deal. They have the better prices. So if we put on the less known brands, we put our brand, trivago Book & Go on top of them. So we have a good deal plus a brand that has a strong trust. This was a strong combination to bring up conversion rates even more. And this will be a strong focus. We have, last year, invested into Holisto. We acquired a 30% stake. Holisto is powering Book & Go, and Holisto is basically a first in OTA themselves. So you can book on Holisto, they are a merchant of record and they are a tech provider that other players can integrate into their booking engine. So we can basically make our -- all of our partners bookable through trivago, through the trivago Book & Go brand. And this would be the vision for our members, in particular, where we will do that. We have a call option for Holisto. So we will consider in the course of the year to fully acquire them. And then we would scale the product with strong emphasis. And the economics you are asking for, we are in the process of figuring that out. What we can see is that conversion rates have a strong indication to go up. And I think that improves economics. One, it creates competition in the marketplace. If competition is higher in the marketplace, if you want -- if other players want to keep their share, they need to bid more competitively. So there's a first order effect, how attractive is the booking through trivago Book & Go, and that is similarly attractive. And then there's a second order effect. If your auction has more competition because more players are competing in that, it has a second order effect of being a chance to increase monetization.

So by now, there are no further questions. [Operator Instructions] So it seems everything is clear by now. So therefore, we come to the end of today's call. So thank you, everyone, for joining and your showing interest in trivago. So should further questions arise at a later time, please feel free to contact Martin from Investor Relations. And a big thank you also to you, Johannes and Robin, for your time and the presentation today. So I wish you all a lovely remaining week, and hand back to Johannes and Robin for some final remarks, which concludes our call for today.

Greatly appreciate your time and interest. We are available for conversations anytime. I hope we outlined that trivago has a lot of value to be unlocked in terms of company value, in terms of business value, in terms of user value. We're excited to continue on that path, and we will be laser-focused on doing a few things right and scale the business across the globe. Thank you.

Thanks a lot for your time.