TripAdvisor, Inc. Q4 FY2021 Earnings Call

Thank you for standing by, and welcome to the TripAdvisor Fourth Quarter and Full Year 2021 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. As a reminder, today’s program is being recorded. I would now like to introduce your host for today’s program, Angela White, Vice President of Investor Relations. Please go ahead.

Thanks, Jonathan. Good morning, everyone, and welcome to TripAdvisor’s fourth quarter and full year 2021 financial results call. Joining me today are Steve Kaufer, CEO; and Ernst Teunissen, CFO and Chief Executive, Viator, TheFork and Cruise Critic. Last night, after market closed, we distributed and filed our earnings release and made available our shareholder letter on our Investor Relations website. In the release, you’ll find reconciliations of non-GAAP financial measures to the most comparable GAAP measures discussed on this call. Also on our IR site, you’ll find supplemental financial information, which also includes reconciliations of certain non-GAAP financial measures discussed on this call as well as other metrics. Before we begin, I’d like to remind you that this call may contain estimates and other forward-looking statements that represent management’s views as of today, February 17, 2022. TripAdvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements. With that, I’ll turn the call over to Steve.

Thank you, Angela, and good morning, everyone. We just finished our fiscal year, and I’m pleased with our rate of recovery. Thinking back to this time last year, things were still very uncertain. Vaccines were not available. In many parts of the world, we were still in lockdown. We’ve come a long way. As 2021 progressed, we saw our tourism industry begin its transition out of the pandemic, and our results followed. Across our segments, we exited the year in a much stronger position. Throughout the year, we remained focused on our partners, customers and travelers. We continue to launch new products and improve the user experience for our travelers. And just a few weeks ago, we hit a tremendous milestone of 1 billion reviews and opinions. Now all of this is a testament to our terrific teams across the globe and the brand that we’ve built, the foundation of which is the trust and engagement from our travelers. As we laid out in the shareholder letter, we believe that across our businesses we are well-positioned to execute our plans for 2022. We provided updates on our key segments and areas of focus as we start the New Year. I hope you’ve had a chance to read through that. One update that I did not provide in the shareholder letter was on the CEO transition. I can share that the Board continues to search for my successor, and we will keep you updated as the journey continues. In the meantime, I remain fully engaged and focused on driving business results, innovation, our employees and our customers. So with that, I’ll turn it over to Ernst before we take your questions.

Thank you, Steve, and thanks, everyone, for joining. We were pleased with our 2021 financial results and are positive about the setup for 2022. We started last year with revenue that was one-third of pre-pandemic levels. Yet as the industry recovered in the second half of the year, we exited at 72% of pre-pandemic levels. And our Q4 results were slightly ahead of the expectations we had communicated in December. As we saw the top line return in 2021, we also managed our costs appropriately, maintaining fixed cost savings, a reflection of the flexibility in our model as we balance future revenue opportunities with investment. In this New Year, we see some exciting areas, which we called out in the shareholder letter. For example, our Experiences offering continues to deliver high growth. And we are expecting revenue for this line to be well above 2019 in 2022. As discussed in the previous quarter, we are looking at multiple opportunities to crystallize value of our Experiences & Dining business. An update this quarter is that we recently submitted a confidential S-1, which, along with other opportunities we are evaluating in parallel, puts us in a position for a potential sub-IPO of Viator, subject, of course, to market conditions. Our HM&P segment continues its recovery path. And while still a transition year, we expect to show great progress in all our revenue lines in this segment as well. In addition to meaningful year-over-year profitability increases, we look forward, in particular, to catching up in our more up-funnel B2B products for hotels and media sales. So in summary, we are very optimistic that consumer travel continues to transition back to full recovery in 2022 and that we are positioned to benefit from the return to travel in general and international travel, a TripAdvisor strength, in particular. With that, let’s jump into Q&A.

Certainly. Our first question comes from the line of Naved Khan from Truist Securities. Your question, please.

Yes. Thank you, and good morning. Just a couple of questions. Maybe on Viator, maybe — can you guys talk about some of the areas where you see some low-hanging opportunities for investment where you get the biggest ROI? And in Dining, beyond the recovery that is expected to happen over the next 12 months to 18 months, just from the recovery and travel, what are the levers that you have to drive long-term growth in this segment?

Yes. Thank you for the question. Let’s talk about Experiences first. Experiences was a tremendously strong year in 2021 and a very strong return to pre-pandemic levels in that business. We saw — it’s traditional in this business, we had very strong city consumption and strong international consumption of Experiences. And last year, we saw the opening up of a very strong U.S. domestic business in parallel or in replacement in large part, which was a business we hadn’t tapped into so much. So we grew strongly domestic use cases of Experiences. The jet ski in Florida, the canoe on the Colorado River, a helicopter tour in Hawaii and that drove very strong growth for us. We also, as you alluded to, flexed our marketing spend in this area, to great effect. We were able to get a lot more revenue by stretching our payback period just a little, and this was a huge success. So we feel we’ve taken significant share in a market that pre-pandemic was growing at very high levels. And we are positioned really well with our Experiences business going forward. These various initiatives that you asked about that we have in place and levers that we have in this business, we talked in our shareholder letter about one exciting new product, which we accelerated for our operators, which is called Accelerate. And this is an opportunity for our operators to profile themselves more on the platform and this has created great results for us, not only in bookings, but also in our take rate. Other initiatives, we have really improved the quality of the Experiences products that we have and how we show them to our users. A real focus on quality and showing only the best Experiences to our users, which has resulted in great conversion gains. The last thing I would highlight is a strong focus on our app for Viator. We are under-indexing on our app usage, but have made great strides in developing that product over the last year and see tremendous opportunity going forward. One important feature of the Experiences shift is that increasingly, consumers are investing in Experiences rather than the place they stay or the travel to the place they stay, especially with millennials; that’s a huge trend. A second important trend that we are seeing and tapping into is an increasing flexibility to book Experiences while in-destination. And the app is a critical tool for us there. So we’re investing significantly in our app capabilities. On Dining, the lever that we have there is still increasing penetration. With TheFork, we’re indexed heavily toward Europe. We’re a European business with TheFork. And Europe is underpenetrated in terms of restaurant reservations compared to, for instance, the United States. And there’s a lot of opportunity still to penetrate countries more deeply, go to secondary and tertiary cities and sign up restaurants there and to increase the user base that we have and the loyalty of the user base, and those are all areas where we invest. Another exciting area around Dining is we’re investing more toward fintech-type applications. We have launched a payment option to pay on the app for your dinner when you’re in a restaurant, integrated with the restaurant, which is a very exciting way of creating stickiness and loyalty. And the other area where we have invested is in gift cards, which allow us to further penetrate the market and leverage word-of-mouth from the great service that we provide. So levers are differentiating toward more fintech products, deeper penetration into markets like the UK and Germany where we’re under-indexed, and investing in those. We have for both of those businesses a huge TAM ahead of us: Experiences is still largely offline, a huge TAM ahead of us and, we think, the competitive position to really take advantage of this market. And so we’re bullish on both businesses. And as we highlighted in our shareholder letter, continuing to invest in these businesses for long-term value creation for TripAdvisor and shareholders.

Got it. Maybe a quick clarification on something you said earlier. So the potential IPO you’re exploring for Viator, along with some other options, are they mutually exclusive or not necessarily? How should we think about that?

Yes. We have a range of options we’re considering. We announced today or yesterday evening that we have filed, confidentially, an S-1 for Viator. That puts us in a position to do a sub-IPO as early as somewhere this year. And that’s a great option to have. We’re also looking at other things in parallel. Yes, some different, some more consistent with it, but this is one that we highlighted and it’s definitely an attractive option.

Great. Thank you.

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

Thanks for taking my questions. Just first one on what you’ve been seeing for the last few weeks in terms of trends, both for your Experiences & Dining and your hotels business. Some of the other companies have commented that Omicron has eased off and things are getting better. And just maybe how you’ve reflected the last couple of weeks into your guidance for Q1?

Sure. This is Steve. I’ll take this, Richard. We have seen and can echo some of the comments that Omicron does seem to have eased off in January. I mean, December and January were pretty tough in the travel industry. I think everyone has seen that, and that’s caused a material issue for what we would have hoped for in Q1. We’re reluctant to make many forward-looking statements based upon days or a week or two of data, but we’re certainly encouraged by what we see if we look in the very recent past.

And if you put it in the context of what we said about the first quarter, January was clearly impacted by Omicron, and we saw December and January having impact. But as Steve is highlighting, trends are up. February is looking much stronger, and that makes us incrementally positive about the year. But Q1 will be impacted by that January impact. It seems to have been a particular January issue. In terms of, specifically, your questions about Experiences & Dining, very strong performance there at the moment. Dining was significantly impacted also in January in Europe, and that is clearly easing now into February. And Experiences has been strong in February, too. So things are looking up in February.

Thanks. And if I could just ask one follow-up. In your shareholder letter, you mentioned you’re not just going to put resources into Experiences & Dining, but also into your core Hotels and Media offering. Is that a reference to leaning into paid search? Or is there some more product investment going into those areas as well?

Yes. The total investment we’re making in HM&P is incrementally quite limited. We called that out in our shareholder letter. There is some inflationary pressure on wages. And we’re making some hires, but by and large, the increase in fixed cost is quite moderate. But we are shifting resources around within our portfolio there. As we were waiting for the pandemic to come back, we were focusing less resources on re-launching, for instance, our B2B business. And we are addressing that this year by shifting more resources towards that. So there is more resources going to the core parts of the business that will drive revenue in the year.

Okay. Very helpful. Thank you.

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

Hey, great. Thanks for taking my questions. Just circling back on Experiences, you mentioned you had pretty strong share gains in the U.S. Can you talk just regionally how your Experiences business is doing in different regions, including Europe and APAC? And then just on the Plus subscription, I know last year, when you were first rolling it out, it was a lot of discounting. So have those $99 subscriptions renewed? How is that occurring? Are people churning off that? Are you alerting people? Or can you just talk about how you’re managing through the discounts that people received last year? Thank you.

Hey Jed, I’ll take the first one on Experiences. Our Experiences business is a global business, and we have Experiences in Europe, in North America and in Asia Pacific. Our points-of-sale have skewed to more English-speaking markets. So we’re strong on the U.S. point-of-sale, UK and Australia historically. And Europe point-of-sale is an opportunity for us, where we still have a lot of room to grow on the POS side. What we saw last year in terms of trends was where historically we had seen U.S. and UK travelers making city trips and international trips, we saw last year very strongly a shift toward the U.S. market and U.S. domestic consumption. Europe is now coming back. So we have seen at the back end of the year and early this year Europe coming back and increasingly international travel coming back. What makes us so enthusiastic about our Experiences business is that we captured the strong domestic U.S. business last year. There will be, to some extent, some move from domestic consumption to international consumption. But we also believe that we have demonstrated that domestic U.S. use case to our users in a way that will be sticky. And this year, we are expecting an increasing recovery of Europe as well as international trips that our audience is making. So those trends, in combination with the various improvements we’re making to the product, set us up for a strong year.

Hi. And Jed, I’ll take the Plus question. So it’s still pretty early days for us to get a good handle on churn and redemption. And you have to remember, we weren’t fully rolled out this time last year, nor would I counsel us or I do not read a lot into churn on the very first set of customers, the early adopters or outside-industry folks who might sign up to try something. I would add that we don’t view ourselves as having been dependent in our early set of customers on the discounts. We did try discounting the $99 price in a variety of different manners. But I wouldn’t particularly worry that the discount level would be a major factor in churn versus usage over the course of the year.

Thank you. And just a follow-up, Ernst, when you talk about expanding Viator into non-English-speaking countries, do you expect it to grow organically? Or would you look at acquisitions?

Mostly organically. We have a strong footprint, and it’s not so much supply growth. We have a very strong supply in Europe. But the audience, the points-of-sale in European countries, particularly Continental Europe, has under-indexed for us, and we think that’s still a growth opportunity that we’ll tap into. We’ll do that with product and marketing, not with acquisitions necessarily.

Thank you.

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

Thanks, guys. Two, if I can. First, the shareholder letter mentions Experiences EBITDA being kind of like a mid to high 20s range. Historically, you’ve talked about the targets being hotel like. So wondering if there’s anything that changed to kind of lower that target margin? And then the letter also talks about revenue from free traffic recovering faster in 2022. Is there any changes to Google SEO we should be keeping in mind? Or what is your plan in terms of brand advertising spend in 2022 versus the past that we should think about for kind of traffic driving?

Yes. I’ll take both questions, Lloyd. On the first one, no, our long-term outlook for Experiences & Dining hasn’t really changed. We said mid to high 20s, which we’ve said in the past as well. They could go beyond that, but that’s our intermediate long-term goal. The economics of both businesses are very healthy. If you take Experiences, we have take rates in the mid-20% range, which is very healthy. We have a cost structure that is comparable to one of a hotel OTA business. The microeconomics on the consumer level are attractive as well. We see nice repeat rates in our user base. So we think the economics are very healthy. As we compare ourselves to hotel OTAs and their development historically, we think those are the kinds of margins we can target long-term. On the restaurant side, the economic model is slightly different, focused around getting a bounty per seated diner from restaurants. And that’s a business that can scale nicely. We are currently investing in expansions in the markets I discussed. We’re acquiring customers. The repeat rates of customers that we acquire for our Dining business are attractive and so generate a nice NPV. So we’re building that base and expect to see real leverage in that model going forward. We feel good about the long term, but in the near term, we’re more focused on getting the growth and taking advantage of the TAM and of our market position and are more focused on top-line growth than on bottom-line growth. Regarding free traffic, we saw last year that our paid traffic was recovering faster than free traffic. It’s largely a function of very healthy CPCs that we have seen, particularly in the U.S., which allowed us to spend more on paid marketing channels like Google and others. With still a lower number of shoppers from free channels because of the pandemic, this showed a mix shift toward more paid. As the pandemic unwinds and we approach a more normal environment, we expect that balance to shift back toward more historical levels. In 2022, we expect free revenue to grow ahead of paid and get a partial rebalancing toward historical levels. In terms of brand spend, we have done some brand spend last year around TheFork. Our bigger brand spend historically was for TripAdvisor. We currently don’t have plans to return to significant brand spend budgets for TripAdvisor.

Okay. And anything on SEO or Google changes to be mindful of, Ernst?

This is Steve. I’d say, as you’re probably aware, there continue to be changes. Google continues to push many players further down in the organic list, but I can’t cite any big moves over the past quarter.

Okay. Thanks, guys.

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

Great. Thanks for taking my questions. A couple of questions, a follow-up on Trip Plus. I think in the shareholder letter, you guys talked about not making much progress as expected. Maybe you can clarify that statement a little bit, Steve. Is that in terms of supply? Or the benefits you’re offering to consumers or the uptake on the membership? And also curious, what are your key focus areas for Plus in 2022? And also maybe help us understand a little bit of consumer behavior. I’m sure you guys have done a lot of surveys. Help us understand what the key reason people are not signing up for your service?

Sure. Thanks for the question. So when I talk about Plus not quite meeting our expectations, we did believe with the traffic and the brand trust and the number of folks that were looking to plan their vacation on TripAdvisor that a travel subscription would resonate faster than 2021 has shown. Yes, we had some supply challenges, but we made changes. As you look on the site, you can see some notable discounts across the markets that were rolled out. I’d say the biggest learning for us, and as we say, we’re still hugely invested in making a travel subscription product work, is that we have not yet found the product-market fit we’re looking for. We do customer surveys and focus groups. One of the things customers tell us is that when they get down the purchase path for a hotel with big savings, the decision to make that hotel purchase is a big decision. The decision to also sign up for a travel subscription is an additional decision that some customers are not ready to make at the same time. That makes some intuitive sense. If you have a big choice—where am I going to stay for my vacation?—it’s an expensive purchase. And yes, they’re saving money, but it’s not just whether to buy a travel subscription. It’s whether this hotel is the right one for you. So we’ve been trying to present the opportunity to buy a travel subscription at different points in the flow. We have several initiatives in the hopper to respond to customer feedback and find different ways to present the value proposition so that consumers will adopt at higher volume. The 2021 learning is that we were too optimistic on consumer uptake. We tried to share that in the shareholder letter. But we’re still very excited about the prospects of a travel subscription given TripAdvisor’s trust, traffic and capabilities.

All right. Thanks, Steve. If I can ask a follow-up question regarding the new CEO search. I think previously you said you were looking for potentially an executive with travel and tech background. Any changes to your search criteria? Are you expanding that? Just curious where you are in the progress.

No, I don’t think there’s been any change in the job description. The Board wants to be thorough in their evaluation. I’ve given them the ability to be thorough. Finding the ideal successor could allow for a smooth transition. So I wouldn’t read anything into the lack of a candidate yet. The search hasn’t been going on for that long. The criteria still stands: someone with e-commerce and travel experience would be ideal for this company and its brand.

Great. Thanks, Steve.

Thank you. Our next question comes from the line of Deepak Mathivanan from Wolfe Research. Your question, please.

This is Zach on for Deepak. Just on Viator, as you explore various different options for the business, how do you think about how important the core TripAdvisor platform is to the long-term growth outlook for Viator? And then I appreciate the mid to high 20s long-term margin target for E&D. Is there any meaningful difference between the Experiences and Dining portions in terms of long-term margins? Are they meaningfully different or roughly the same? Thanks.

Hey. In terms of Viator and the TripAdvisor point-of-sale, within Viator’s portfolio, by far the largest component of revenue is the Viator point-of-sale—viator.com and the Viator app—where people go to book directly. That’s the largest channel. A significant but smaller channel is the TripAdvisor point-of-sale, where Viator is the fulfiller for TripAdvisor. TripAdvisor is the sales channel for Viator; Viator fulfills bookings and provides customer service and is the merchant of record. A third, much smaller channel is other third parties that Viator integrates with. That’s an attractive long-term growth channel as well. For TripAdvisor, Experiences is an important strategic vector for the brand. Increasingly, it becomes important for travelers in-market to figure out what to do. The fact we have Viator in our portfolio, and potentially a more arm’s-length relationship later, is important for the TripAdvisor brand. TripAdvisor has ambitious goals to grow its channel there, and Viator will benefit. On long-term margin differences, both businesses have attractive long-term profiles. Experiences has an attractive take rate, compared to the hotel industry, with similar marketing and supply economics. I believe that setup is very attractive going forward in particular.

Yes, thank you.

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

Great. Thanks for taking the question. In terms of your reviews and getting to 1 billion, you also announced earlier this month a new partnership with Kayak to show your cruise reviews on its website. So just wondering if you could elaborate on this partnership? How does this benefit TripAdvisor? And could this potentially extend beyond cruises to better monetize these 1 billion reviews externally in the future? Thank you.

Sure. We’re very proud of the billion reviews and opinions; it’s a testament to the power of network effects. The Kayak relationship you’re referring to is our Cruise Critic subsidiary powering the Kayak cruise tabs. It’s a great way for Kayak to expose cruise content to their users and for our Cruise Critic company to gain access to those additional customers when they might be thinking about travel costs to take a cruise. Kayak can offer more cruise information and Cruise Critic powers it. Kayak is a strong company with a lot of traffic; it’s a natural partnership. I wouldn’t read too much more into that beyond a strong cruise content partnership.

Got it. Thanks.

Thank you. Our next question comes from the line of Tom White from D.A. Davidson. Your question, please.

Great. Thanks for taking my question, guys. Two, if I might. First, Ernst, you mentioned B2B subscription revenues having a strong recovery in 2022. Can you elaborate on that a bit? Is that more of a slow build due to the subscription nature of some of that stuff? Or are there any new products or new ad formats that should move the needle? And then on Experiences, can you share your view on the long-term competitive differentiation for you guys in Experiences? Airbnb said on their call they will renew focus in that space. Long term, do you win due to supply breadth? The consumer experience? Linking Experiences up with other parts of Trip, like Plus? I’d be curious to hear your thoughts. Thanks.

Tom, on our B2B business: in our shareholder letter, we showed TripAdvisor other-branded hotel revenue, which is largely subscription business, and its percent to 2019 throughout 2021. Compared to other parts of the business earlier in the pandemic, this subscription line held up relatively well, which is the nature of a subscription product. As the business recovered in 2021, this line recovered some but not as fast; that’s again the nature of a subscription business. We are currently rebuilding our sales force capability for this product; we did not invest as much in sales during the pandemic, and we are rebuilding now to capture recovery in 2022. This business has a lag effect: signing up subscriptions and revenue recognition will trail sales. So it will not snap back as fast, but we believe it will recover on a sales basis and catch up on revenue recognition as we move further into recovery. On Experiences long-term differentiation, we think there will be players like TripAdvisor that target an integrated trip and use experiences as an add-on to the overall trip marketing. We also believe there will be room for a few pure-play experiences providers. We are uniquely positioned with Viator to capture the pure-play experiences OTA space. Differentiation comes from breadth of supply—we have about 300,000 Experiences products—how we market them, and a brand recognition as the place to go to book an exciting experience. We’re playing from both angles: pure-play experiences and integrated TripAdvisor plays, and that combination will be differentiated.

Thank you, guys.

Thank you. Our next question comes from the line of John Colantuoni from Jefferies. Your question, please.

Thanks for taking my question. Wanted to ask about cost savings. It sounds like you’re expecting to retain the majority of fixed cost savings in HM&P, but reinvest fixed and variable cost savings in E&D. Maybe outline out of the $240 million in total cost savings, walk through what portion you’re expecting to retain going forward versus spend back into growth initiatives? Thanks.

Yes. The additional disclosure we gave in our shareholder letter is that we split out our fixed cost and variable cost by segment. That allows for better modeling and discussion of different trends. Of the $240 million of fixed cost improvements, about $100 million of that was in HM&P. We’re adding some back, but it’s very modest with inflationary pressure and a bit of hiring for sales force, but mostly those savings are sticky. About $90 million of costs came out in our E&D segment. There we wanted to reinvest, and we think the majority of that $90 million will be reinvested this year into product development, technology development, supply organization capability, all to drive revenue in the year and position us well for the years to come. The remaining fixed cost came out in other areas; we’re making minimal increases. So those savings are largely sticky as well.

Yes, that is very helpful. And one quick one on travel spend and the recovery. Do you anticipate spending for the full year will recover to pre-pandemic levels? Or is the expectation that at some point during the year, maybe in the second half, spending will return to pre-pandemic levels?

We’re bullish about 2022. We obviously started January with the Omicron impact. But we expect a continuation of the path to return to relatively normal travel levels that began in 2021 and to continue in 2022. We assume a progressive return to pre-pandemic levels of the leisure travel market and expect to be there at some point this year, without putting a finer point on timing. As a result, our revenue recovery would follow a similar pattern and our EBITDA will be second-half weighted for the full year.

Appreciate it. Thank you.

Thank you. Our next question comes from the line of Dan Wasiolek from Morningstar. Your question, please.

Good morning, guys. Thanks for taking the question. One of the existing advantages for your Experiences business is the ability to tap the cash generation from the core hotel platform for investment purposes. Regarding the potential sub-IPO for Viator you’re considering, is the thought that Experiences would still be able to use the cash generation from the core hotel platform for future investment needs if you decided to build that route?

My lawyers advised me not to be too specific about what an IPO means and how to market it. But generally, part of a more independent structure and independent financing of a business would be that you would have independent financing for such a business.

Okay. That’s fine. Understood. And then one more if I could: regarding the percent of dining that’s booked online, can you give a penetration rate for the U.S. and in Europe? That’s it for me. Thanks.

Without putting a finer point on it, it is lower in Europe. In Europe, a lot of dining is done offline, and reservations are largely offline. That is the market we are tapping into, getting people into the habit of grabbing TheFork app to make their reservation booking. We do that through providing a great service, and we have marketing tools like loyalty programs, which we call Yum points. We’re increasingly integrating payment capabilities on the app with gift cards. We’re creating a flywheel of making online booking a habit, which we’re successful at, and we think there’s a long runway in Europe.

Great. Thanks, guys.

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

Thanks, guys. A couple on Viator. You mentioned supplier trust and quality standards, booking and payment flexibility, access to customer service. Are those improvements more a function of a larger base of suppliers? Is it culling off lower-performing supply? Is it new tools and innovation? Maybe a bit of all three? And then as you contemplate a Viator IPO or other alternatives, it might be premature, but how would you plan to maintain the operational synergies between Viator and the Experiences business on TripAdvisor’s point-of-sale?

Excellent questions. Over the last year, the focus has been much less on adding supply; we already have significant supply. A big job during the pandemic was to reorient supply toward use cases that were more relevant, such as U.S. domestic. Other areas we’ve focused on include helping suppliers, or operators, profile themselves better on TripAdvisor and Viator. In particular, we’ve prioritized higher-quality Experiences that are exciting, clearly described and well-presented. That focus has helped conversion because higher-quality products convert much better. The Accelerate program we piloted last year helps operators play with levers like take rate to better profile themselves on Viator, and it’s been a huge success in trials; we’re rolling it out in 2022. The app is another important focus area. We also focus on retention—how to get users to book again on the same trip and how to get them to come back. Regarding operational synergies between Viator and TripAdvisor, we already have separate teams operating Viator and the TripAdvisor experiences business. TripAdvisor acts as a merchant customer and affiliate channel, and we’ve carved out these businesses internally to operate as distinct but complementary go-to-market strategies.

Got it. Thanks, Ernst. Appreciate it.

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

Great. Thanks a lot. Could you give us any more color on consolidated revenue and recovery in February? If you compare that to February 2019, have you gotten back to the kind of levels we saw in October, like minus 30% versus 2019? Thanks.

I don’t want to put a finer point on it than we have already done. We’ve given some indication of where we expect the quarter to net out. There has been a market improvement in February versus January. January was significantly impacted across the board. Dining has proved to be perhaps the most elastic of our businesses to news and COVID case counts: when cases dipped in summer 2020, the restaurant business roared back; conversely, when cases rose in late Q4 and January, Dining was impacted. We see that elasticity again in February with consumption coming back strongly. So there’s a significant difference between January, which was significantly impacted, and now February coming back. That has informed our forward-looking statements on the quarter.

Okay. Thanks, Ernst.

This does conclude the question-and-answer session of today’s program. I’d like to hand the program back to Steve Kaufer for any further remarks.

All right. Well, thank you, everyone, and thank you to our teams around the world who are working tirelessly to help our partners, travelers and hospitality partners navigate and find the bright spots through these still uncertain periods. As Ernst just mentioned, we’ve seen some nice signs in February, but that’s relatively recent. We expect things to come back over the course of the year and reiterate a nice recovery over 2022. We remain optimistic about the industry, the resilience we’ve seen so far and the booms that we expect over the course of the year. We thank you very much, and wish you a good day.

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