Good day and thank you for standing by. Welcome to the Tripadvisor Third Quarter 2024 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. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker for today, Angela White, Vice President of Investor Relations. Angela, please go ahead.

Hey, Felicia, thank you. And good afternoon everyone and welcome to Tripadvisor’s third quarter 2024 financial results call. Joining me today are Matt Goldberg, President and CEO; and Mike Noonan, CFO. Earlier this afternoon after market closed, we filed and made available our earnings release. In that release, you’ll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measure discussed on this call. Before we begin, I’d like to remind you that this call may contain estimates and other forward-looking statements that represent management’s view as of today, November 6, 2024. 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 Matt.

Thanks Angela, and good afternoon everyone. Our financial performance this quarter reflects the strong execution and operational focus of our teams across Tripadvisor Group. As we continue on our multiyear journey to transition from optimizing legacy offerings to scaling strategically focused growth drivers, we have the benefit of a diverse portfolio that we're managing for growth and profitability. For the third quarter, on a consolidated basis, we delivered $532 million in revenue, flat to last year and in line with our expectations, given the anticipated headwinds in our legacy hotel meta offering, offset by healthy growth at Viator and TheFork. Our adjusted EBITDA came in at $122 million, with all three of our segments delivering profitability, which gives us confidence in how our teams have delivered and to reaffirm our full year estimates. Mike will provide more details in his section. I'd like to take this opportunity to reflect on the meaningful progress we've made and the opportunities ahead. I'll also cover how this comes together as we think about 2025, starting with the experiences category. Our ambition is to extend our leadership position in this large and expanding market with our scaled global platform and attractive financial profile. This is one of the most exciting opportunities in travel given the secular tailwinds, low online penetration and the growing recognition of experiences as the most meaningful and important part of travel. This positions experiences to grow faster than the travel industry as a whole over the foreseeable future. We still have much work to do, but with our unique assets, some of the most trusted brands in travel, sizable, high-intent audiences, the deepest source of supply online, extensive third-party distribution and the review platform of choice for operators, we're confident in our leadership position. In the Viator segment, we've been balancing growth and investment to drive scale and contribute an increasingly larger share of revenue and profit to the group. As a reminder, this includes contributions from the Viator and Tripadvisor B2C points of sale as well as our B2B offerings for operators and third-party distributors. In Q3, revenue was $270 million, growing 10% year-over-year and gross booking value, or GBV, grew 9% to approximately $1.1 billion. Adjusted EBITDA was $30 million or 11% of revenue. We believe we're still in the early innings in the experiences category, with meaningful distinct advantages to serve travelers. The Tripadvisor brand is one of the most trusted brands in travel and its largest and fastest-growing audience comes to the site to discover and book experiences. Its broad reach and position in guidance planning helps capture upper funnel travelers at the start of their planning journey. The Viator brand is well positioned to capture high intent travelers further down the funnel as the leading experiences marketplace with the most scaled source of supply and a strong foothold with US travelers. While each of these brands serves different audiences with unique products and distinct marketing strategies, the scale we've reached allows us to unlock new opportunities across product, supply data and geographic expansion that leverage our combined assets and capabilities. We've made good progress with our priority investments at Viator this year. Year-to-date, we've seen higher-than-average growth in bookings from direct and other low-cost channels, which reflects our increasing scale and our progress in building awareness beyond search. We continue to improve the products across the board, such as landing pages tailored to traffic sources that have improved the user experience and yielded conversion wins. Our effort to drive more bookings to the app is working. App bookings in Q3 grew faster than any other surface and the mix of app bookings has almost doubled since 2022. We're seeing strong and stable repeat booking growth, which combined with large cohorts of new customers that we expect to mature into repeat travelers, gives us confidence in our durable foundation for future growth. We're also increasingly leveraging generative AI to improve our product and customer experience. Not only are we using the technology to better assist customer service agents in serving travelers but we're also leveraging GenAI to provide better product recommendations that drive higher conversion and generate communications for agent follow-up. Shifting to Brand Tripadvisor, where our teams continue to work to transform the business and shift from our historical reliance on the profitable but pressured legacy hotel meta offering. This transition is reflected in Brand Tripadvisor's Q3 financial performance, with revenue of $255 million, a year-over-year decline of 12%, which was within our expectations and adjusted EBITDA of $87 million or 34% of revenue, which came in above expectations due to the timing of certain investments. Mike will discuss this further shortly. Our strategy is to address these well-known headwinds by innovating around travel planning and guidance, still one of the most labor-intensive and time-consuming parts of travel. We believe we're uniquely positioned to solve this pain point for travelers with our trusted brand, high-quality content and extensive data. And our indicators of traveler engagement with the new products we rolled out this year only strengthened our conviction. Our monthly active users, or MAUs, have stabilized and returned to growth year-to-date. And importantly, our engagement trends in monthly active members and app users have continued to improve quarter-by-quarter. We see the benefits of this growth among our most engaged users in and our channel mix, where our direct channel has added more MAUs than any other year-to-date, achieving more than 30% growth versus 2023. As I've noted in prior quarters, we continue to see our strongest performance against these metrics in the U.S. market, where we typically launch new products first, and we increasingly see fast follow markets outside the U.S. following a similar trajectory. Of course, this progress in our engagement strategy must translate to financial impact at scale. This means continuing to grow these audiences, innovating in our product and particularly in our hotels experiences marketplaces and actively managing the structural headwinds in hotel meta. We continue to shift our focus and resources to the areas where we are differentiated and have the highest conviction about future growth. Our execution will center on a few key pillars. First, we're focused on growing our mobile app, through a host of UX changes that have already resulted in higher engagement and repeat rates, evolving our trip planning feature and optimizing conversion in our hotels and experiences booking capabilities. As we continue to scale in-app hotel booking in the U.S., we're seeing higher click-through rates, four times better monetization per booker, and significantly higher experiences revenue and review and photo submissions versus in-app meta. Second, we're focused on accelerating experiences growth by more effectively serving the diverse global demand we see in Brand Tripadvisor's funnel. This includes improving discovery, cross-selling on hotel detail pages, and expanding supply partnerships in new categories and geographies. We're also leading with experiences when we launch new guidance features like our chat-based AI assistant on destination pages, which is designed to help travelers navigate the best of our billion-plus reviews, forum posts, and other guidance content to find the most relevant things to do. Finally, we're focused on rolling out new membership enhancing features, including rewards, promotions, and an achievement program that are driving higher conversion and meaningful uplift in member contributions. This also includes member-only capabilities like AI-powered trip planning and in-app hotel booking as well as leveraging our proprietary data to deliver more personalized cross-category recommendations to each member. Now, turning to the dining category, where we see ample opportunity for growth as evidenced in our Q3 results at TheFork, the segment's best financial performance on record. Revenue accelerated sequentially to $49 million or 17% year-over-year growth. Adjusted EBITDA in the quarter was $5 million or 10% of revenue, a significant improvement from last year. This is a strong trajectory, and we're well-positioned to sustain the momentum. We have a defensible position as the largest dining reservations platform in Europe, serving both diners and operators. Our unit economics continue to improve through a combination of marketing efficiency and sales productivity that are driving healthy growth in new and repeat diners as well as our restaurant base, providing a strong foundation for the future. Continuous product improvements at TheFork have positioned us well on both the B2C and B2B fronts, each of which are delivering strong growth. For diners, our user experience, largely on app is increasingly personalized with more relevant content in AI-powered review summaries, tailored onboarding flows, and special offers, which are driving better conversion rates. We've also strengthened our B2B offering to provide more value for our restaurant operators, which is driving an uplift in ERB usage and accelerated growth. Our upgrades include AI-driven predictive analytics, better service and table views, mobile optimization, and enhanced revenue management insights. Following our recently announced Vodafone partnership to introduce new diners to TheFork, we continue to gain traction with strategic partners as a trusted dining brand with a strong consumer value proposition. We recently entered into a relationship with Mastercard, and we'll work together to provide premium restaurant experiences across Europe and preferred treatment for Mastercard cardholders utilizing TheFork pay. While this won't begin to scale fully until next year, this is a testament to our brand value and reliability in our payments technology. To further enhance this collaboration, Mastercard will also become the title sponsor of our annual event, TheFork Awards. Throughout 2024, we've delivered tangible evidence of the progress we're making across multiple categories in each of our segments, which we believe will set us up to deliver our desired financial profile going forward. This is a critical input for us as we solidify plans for 2025. While it's premature to provide specifics, I do want to take the opportunity to share some thoughts on our emerging priorities for the coming year. First, we will utilize all of our group assets and capabilities to extend our leadership in experiences, leveraging our marketing scale, brand value across geographies and B2B relationships with distributors and operators. Even with all the talk of normalized growth rates in travel, we believe this category will continue to outperform the industry with solid double-digit growth, contributing a higher mix of our overall revenue and profit and enhancing our group financial profile. Second, we expect Tripadvisor to be increasingly focused on a streamlined set of priorities, including further differentiating our brand and content around planning and guidance, driving booking growth in our experiences hotels categories, especially in-app, and enhancing our membership offering to reward engagement and drive monetization. We believe these priorities are most critical to translate our strategy into a sustainable, long-term financial profile. Third, we'll begin to build on the strong foundation at TheFork, growing both diners and restaurants, continuing to improve our products and driving diverse revenue growth across B2C and B2B, as we maintain this year's momentum, delivering growth and profitability. And finally, we'll ensure that our operating model supports our growth agenda across the group by balancing investment and profitability, including managing operating costs as we continue on our transformation journey. As always, we're monitoring what's happening on a macro level, although its future impact is difficult to predict. We continue to see healthy search data and strong consumer intent to travel and book experiences with overall stability in booking windows and average length of stay. We've observed some bifurcation of intent between higher and lower-income travelers, but regardless of the fluctuations we may see periodically, I remain confident in the durability of growth in leisure travel. This is a sector that has continued to adapt, change and grow over the long term. Across Tripadvisor Group, we are well positioned for enhanced growth as we continue to build trust with travelers, innovate our offerings. And as the experiences category continues to emerge as an increasingly central and durable part of the travel budget. With that, I'll turn the call over to Mike.

Thanks, Matt, and good afternoon. I'll start with a review of the quarter, and then we'll provide our outlook for the remainder of the year. As a reminder, all growth rates are relative to the comparable period in 2023, unless noted otherwise. Third quarter revenue was $532 million, reflecting flat growth and in line with our expectations. Adjusted EBITDA was $122 million or 23% of revenue and meaningfully higher than expected due to Brand Tripadvisor's contribution, which I will cover in a moment. Turning to segment performance for the third quarter. Brand Tripadvisor delivered revenue of $255 million, a decline of 12%. Performance was in line with expectations, which anticipated a sequential step down. In branded hotels, revenue declined 17% to $151 million, driven primarily by hotel meta. As anticipated, we witnessed a softer pricing environment in hotel meta, particularly in the U.S., which stepped back meaningfully from prior quarters, but we believe is reflective of the overall normalization of travel trends. For the quarter, overall volume trends remained under pressure year-over-year and continued to be our largest headwind, but we're better than we witnessed in Q2. Revenue declines in Hotel meta peaked in July and then saw consistent improvement throughout the quarter. Media and advertising revenue grew 5% to $40 million, growth in our off-platform sales and creative offerings from our Wanderlab Studio and programmatic advertising offset declines in direct advertising revenue. Experiences and dining revenue was $51 million, a decline of 7%, driven by the ongoing transition to self-serve sales model and our restaurant B2B offering and a sequential deceleration in experiences revenue. In experiences, performance this quarter was driven primarily by Brand Tripadvisor segment-specific marketing strategy to emphasize profitability. Finally, other revenue declined 19% to $13 million, in line with expectations. We continue to deemphasize our flights, car rental, and vacation rentals offerings to focus on initiatives more aligned to our stated strategy. Adjusted EBITDA at Brand Tripadvisor was $87 million or 34% of revenue. Year-over-year deleverage of approximately 400 basis points was related primarily to higher headcount costs as a percent of revenue, despite lower headcount dollars year-over-year due to lower Hotel meta revenue. Relative to our outlook in August, we came in higher than expectations due to operational outperformance, normal quarterly true-ups of certain expenses, and the decision to delay certain growth investments until 2025. While the delayed growth investment was a benefit to Q3 adjusted EBITDA, postponing it also reduces our expected Q4 revenue and adjusted EBITDA versus the outlook we provided in August. Turning to Viator, Q3 revenue grew 10% to $270 million and gross booking value, or GBV, grew 9% to approximately $1.1 billion. Viator point-of-sale growth for GBV outpaced total GBV growth, while Brand Tripadvisor point-of-sale grew below total GBV growth. Viator segment growth is a function of different growth and profit priorities between the different points of sale, which is reflected in the relative growth rates. As Matt mentioned, we believe our unique assets Brand Tripadvisor's broad reach in large upper funnel combined with Viator's ability to capture high intent travelers as an OTA, provide us a distinct advantage as we look to capitalize on this large market opportunity. Viator adjusted EBITDA was $30 million or 11% of revenue. Year-over-year margin leverage of over 400 basis points was driven by higher contribution profit and lower fixed and discretionary expenses as a percent of revenue, which include brand marketing and people costs. While we continue to see healthy growth in our paid marketing channels, our direct channels beyond search are growing faster. We continue to drive strong growth in repeat bookings, and this growth has been consistent quarter-over-quarter. Importantly, repeat bookings come with lower marketing costs than new bookings. At TheFork, revenue was $49 million or 17% growth and 15% in constant currency terms. Growth was driven by a combination of both bookings, volume and pricing, despite headwinds from Olympics and Euro Cup as well as strong growth in our B2B revenue. Sequential acceleration was also due to a benefit from the Vodafone partnership we noted last quarter and higher B2C revenue due to some incremental marketing spend in the quarter. Our B2B business, while a smaller contributor to overall revenue at TheFork, is growing faster than our reservation revenue as we capitalize on our product investments to drive an enhanced value proposition to restaurant operators. Importantly, the team continues to drive greater efficiencies, particularly through reduced restaurant acquisition costs. Adjusted EBITDA at TheFork was $5 million or 10% of revenue, an improvement of 12 percentage points year-over-year and represents the highest margin the business has ever achieved. This leverage is primarily due to lower fixed and discretionary costs which include people and brand marketing costs. Now turning to consolidated expenses for the quarter. Cost of revenue was 9% of revenue, an increase of 100 basis points, primarily due to higher Viator transaction costs as a percent of consolidated revenue and higher cloud and media production costs at Brand Tripadvisor. Sales and marketing was 51% of revenue and was flat as a percent of revenue year-over-year. Deleverage from Viator and TheFork sales and marketing costs as a percent of consolidated revenue is mostly offset by leverage from Brand Tripadvisor. Technology and content costs were 14% of revenue, approximately 100 basis points higher, primarily due to higher cost of Brand Tripadvisor and Viator in support of product development to advance their respective strategies. G&A expense as a percent of revenue was 10%, flat year-over-year as a percent of revenue. The Q3 year-over-year increase in share-based compensation of $7 million was primarily due to differences in vesting schedules for our employee equity grants, resulting in additional expense recognized in Q3 2024 versus Q3 2023. SBC expense was impacted primarily due to a one-time acceleration of the vesting period of our 2020 company-wide equity grants to two years from four years as disclosed during 2020, resulting in lower than usual run rate for Q3 2023. Now to cash and liquidity. Operating cash flow was negative $44 million and free cash flow was negative $64 million, reflecting our typical seasonality. Other drivers of the year-over-year decline were changes in other working capital, including seasonally lower deferred merchant payables and last year's refund of approximately $49 million related to the 2009, 2011 IRS transfer pricing settlement. We continue to expect net cash inflows of $50 million to $60 million in the next 12 months related to the 2014 through 2016 IRS transfer pricing settlement. The total net outflow of the 2014 through 2016 IRS transfer pricing settlement is expected to be approximately $100 million to $110 million in 2024 versus the net cash outflow from that 2009 through 2011 IRS transfer pricing settlement of approximately $60 million last fiscal year. We ended the quarter with nearly $1.1 billion of cash and cash equivalents, an increase of $45 million from December 31st, 2023. During the quarter, we had no share repurchase activity. Although we have not terminated the program, we have been in the past and may continue to be limited in our ability to purchase shares in the public market due to ongoing consideration of a variety of potential strategic alternatives. We will continue to look for opportunities to repurchase shares, taking into account our capital needs, market conditions, and other relevant factors. Turning now to recent trends and our outlook for Q4. In October, we saw positive trends in Viator with meaningful acceleration from where we exited the third quarter. At Brand Tripadvisor, our October performance was in line with our third quarter growth rate, with Hotel meta performing largely consistent with where we exited the quarter, which was an improvement from early Q3 trends. Given what we've seen quarter-to-date, our full year 2024 revenue and adjusted EBITDA on a consolidated basis are in line with our previous outlook in August. We expect high single-digit revenue declines at Brand Tripadvisor, while Viator and TheFork will deliver revenue growth higher than expected in our last update. For consolidated adjusted EBITDA, we expect 100 basis points of deleverage year-over-year. As a result, we expect a sequential acceleration of consolidated revenue growth in Q4 to low to mid-single-digits year-over-year. At Brand Tripadvisor, revenue declines are expected to be flat sequentially, while we expect Viator to accelerate sequentially to mid-teens growth and TheFork to accelerate sequentially to mid-20s growth. For consolidated adjusted EBITDA margin in Q4, we continue to expect deleverage year-over-year. We expect Brand Tripadvisor margins to be approximately 20%, which is primarily due to lower revenue in branded hotels, combined with the lapping of last year's cost actions that drove lower people costs and other discretionary costs. For Viator, we expect margins in the high single digits. And for the fourth, we expect margins roughly flat with Q4 of last year as we are making some incremental growth investments that will largely benefit us next year. With that, I'd like to turn the call back over to the operator to begin Q&A.

Thank you. At this time, we will conduct a question-and-answer session. The first question comes from the line of Ben Miller of Goldman Sachs. Ben, please go ahead.

Thanks so much for taking my questions. Just on Brand Trip margins, can you expand on some of the drivers of the margin performance in Q3 and the qualitative puts and takes as we look out into next year, understanding, it sounds like some of the investments were pushed out a bit? Thanks.

Yes, it's Mike. For Q3, we had some factors that we want to highlight and be open about. The outperformance was mainly due to three things, each with relatively equal importance. First, we experienced some outperformance at Brand Tripadvisor. Second, we adjusted some regular quarterly accruals that occur as part of our normal operations. Third, we had planned market investments in our forecast that we ultimately did not carry out. This decision was due to our thorough testing process and our commitment to ensuring we are certain about the investments we make. These marketing investments were particularly in social mid-funnel, which we are still very enthusiastic about, but we want to ensure we get them right before implementing them, aiming for 2025. Also, this has implications as we consider Q4. It's too early to assess the impact on margins for 2025, but that’s currently the focus of our work. We want to be clear about the movements in Q3.

Great. And then just as a follow-up. I was curious if you could expand on some of the early learnings from launching the bookable hotel inventory in the app. And just any color you can share on what adoptions look like or penetration of the member base that's actually engaged and made a booking?

Yes. Thank you, Ben. It's Matt. We're excited about what we're doing in the app, and we think that we're taking a differential approach to this. And as we engage with the ecosystem, we're getting good feedback. And so while it's really early, we're seeing some promising signs as we roll out. Members have demonstrated that they really have a preference for hotel booking over the Meta product. And we see that in meaningfully higher click-through rates when they're presented with a booking option and that results in higher revenue per booker, which is multiples higher than a Meta shopper. We're also seeing a strong propensity to repeat. And the conversion rates are five times higher than new users. And so when somebody books, they actually want to book again. And these shoppers are also engaging with other categories as well. So hotel bookers drive material incremental experiences revenue. And they also engage more. They create more trips, they leave more reviews. And so our testing is showing that we can meaningfully drive higher levels of conversion, which has already grown since we launched it. And as we scale, we're not only holding that conversion we have identified opportunities to even drive that conversion higher. So early, but feeling good about it so far.

One moment for our next question. The next question comes from the line of Richard Clarke of Bernstein. Richard, please go ahead.

Hi. Good afternoon. Thanks for taking my question. I guess if I look at your slide deck you've put out with the release there, on Slide 15, it looks like you're expecting online experiences as a market to grow by about a 17% CAGR, but Viator's bookings just growing at about half that at the moment. So just wondering how you're balancing sort of growth versus profitability in that business? And what you expect you can kind of catch up to that what you're putting out as the market level of growth for online experiences?

Yes, Richard, it's Mike. I'll respond, and Matt can add in. We all recognize that the experiences category is expanding and is projected to outpace overall travel growth for the foreseeable future, mainly due to the shift from offline to online and increased awareness of the category. We're excited about the long-term growth potential. Regarding our experience segment, particularly with Viator, I want to highlight a few points. First, we are pleased with our growth rate this year, which aligns with our expectations after a significant price increase last year. Second, our revenue mix at Viator involves various market strategies, particularly with one of our significant channels, Tripadvisor. Although they focus on management profitability, their growth rates are slower than Viator's. Looking ahead, we're encouraged by the reacceleration we're observing in Q4, partly due to easier comparisons from last year's Middle East activities, but also because demand remains strong. We believe we’re well-positioned to capture market share next year through ongoing improvements at Tripadvisor and the optimization efforts for our Viator brand, which include funnel optimization and supply extension. Overall, we are confident in our ability to grow in line with industry trends.

Yes. And the only thing I would add is I think industry growth rates right now, last report I saw was in the 10% range. And so if you look at that, online is going to grow faster than offline and OTAs are going to go faster than online as a whole. And we think we're really well-positioned with the assets that we brought, as I discussed in my prepared remarks. So, we feel really good about the growth trajectory for Viator. And the last thing I would say from a technical perspective, Richard, is that I think that growth rate includes APAC, which is obviously growing at a faster rate than our target markets.

Understood. And maybe just as a follow-up. You mentioned that there were some restrictions maybe being placed on your ability to buy back shares at the moment. Just any extra color on what that might entail? And any timeframe on when that might be resolved?

Yes, Richard, let me try to respond to that one to the best of my ability. Obviously, given our limited participation, we just want to be clear that there are a variety of reasons at any given time why we might be limited in our ability. And one of these reasons is the ongoing consideration of a variety of potential strategic alternatives. But we really can't get into any of the details more than what we've said. We will always look for opportunities to repurchase shares, taking into account our capital needs, market conditions and other factors. And I'm sure you can understand, it's very challenging for us to comment any further than this. I hope that's helpful to you.

The next question comes from the line of Naved Khan of B. Riley Securities. Naved, please go ahead.

Good. Thanks so much. So Matt, regarding your comments about 2025 and the general outlook for experiences to grow in double digits, how should we consider the balance between growth and profitability and your continued margin improvement? What is the right approach specifically for Viator? Additionally, could you discuss what you are doing in the Tripadvisor app concerning rewards? Are you conducting limited testing, or what insights have you gained so far? Thanks.

Yes. So let me kick off and then Mike can add on 2025. What I was talking about and what I said was we believe that the category is going to have solid double-digit growth. We also believe that our participation in the category can contribute a higher mix of our overall revenue and profit and really enhance our group financial profile. And we are very excited about the progress that we are making. We're also identifying opportunities that we think we can really attack this category in a different way across areas of product and leveraging our data and thinking about conversion and supply acquisition and international growth. And these are all things where we have multiple assets and capabilities, not the least of which is the Tripadvisor demand in lots of territories where, frankly, in the past, we haven't had the ability to expose the demand to supply that they might want in those territories. So we're really excited about adding supply geographically and categorically to drive that. Mike, do you want to add anything on Viator before I move on to Tripadvisor?

No, I think you covered it well. And again, these are all the investment and growth choices we're working through now, Naved. But again, I emphasize that Matt said around a belief in the category and our assets there.

Yes. So I think you asked about what we're doing with the Tripadvisor app. And we're really excited about how the app is progressing. And I think I've said this a couple of times in the past. But when I pick up the app, which I do just about every day, it continues to evolve, and it looks very different than it did just a year ago. We are continuing to scale in-app booking for hotels for members. We think that the use case of doing it in context with trip planning is proving to drive engagement and monetization. We're doing a lot to leverage AI there. And of course, all of that drives us into the ability to drive bookings of both experiences and hotels. Now the rewards piece is a really important piece. And it's a component of what we've said for a long time, which is a free membership is going to be an important part of our engagement strategy. So we've launched the first elements. It enables travelers to earn rewards. And that's different than trying to do something that starts with discounting. And that's, I think, one of the reasons that the ecosystem has responded really well is because we're allowing travelers to earn cash back when they make hotel bookings, we have the ability to do that across categories. We're also testing time Booker offers to incentivize trial. And of course, we're seeing higher levels of conversion and with the associated repeat. So we feel like that is a really exciting part of what we are delivering, and we're going to continue to test and learn as we scale this out. And this is something we feel really excited about. So watch the app space from here.

One moment for your next question. The next question comes from the line of Ron Josey of Citi. Ron, please go ahead.

Hi. This is Robert on for Ron. Thanks for taking the question. First one is on Viator. I know you guys called out strong growth in repeat bookings in the quarter. Can you maybe just elaborate on Viator's direct traffic trends? And then perhaps talk to how you expect Viator's advertising spend to evolve heading into next year?

Sure, it's Mike here. I'll take that one. Our repeat growth rate has remained quite stable over several quarters, and we are thrilled about that. This reflects our ongoing focus on acquiring new users and ensuring they have a positive experience that brings them back. As this cycle continues, our costs associated with these returning users have been decreasing. Regarding your question about direct costs, we've maintained a steady process here, which is promising and shows that we're effectively sustaining the cycle of acquiring and retaining users. We know that both new and returning users find us through various channels, so it’s crucial to be present where they are looking. We aim to maximize our continuous user acquisition. Could you please repeat your second question?

The second question was just how you expect advertising spend to evolve Viator into 4Q and then into 2025 as well?

I understand, thank you. Regarding 2025, we are considering our strategies and examining growth and profitability, which presents us with many options. This year, we believe we have achieved robust growth through our varied marketing strategies. Acquiring traffic will remain crucial for bringing in both new and returning users. We plan to increase our experimentation beyond traditional search engine marketing, exploring avenues like mid-funnel and social connected TV, which we expect to become a larger portion of our expenditures moving forward. We have strong teams in place, and our focus will be on identifying user intent and target those opportunities at the lowest possible costs with confidence in our teams.

I mean, the only color I want to add is that this is all about this flywheel. It's going and finding the right customers who are going to be high intent, get them onto our product, particularly the app where we're putting focus. And I referenced I referenced because you asked about direct, that we're making real progress there in the fastest growing surface for bookings, and it's almost doubled since 2022. And that's because the product is doing the work. So we got to lean into getting the product to do the work. And then, of course, we need to think about how we enhance supply so that flywheel gets rolling. And we feel really good about the progress we're making and our ability to continue to lean into that in a way that will drive the continued accelerated growth that we're starting to see here in the first part of this quarter.

One moment for your next question. The next question comes from the line of Trevor Young of Barclays. Trevor, please go ahead.

Great. Thanks. First, just tying in to some of the earlier questions around US experiences in particular. It seems like a large competitor is aiming to scale meaningfully here in the US in that category. How is that impacting trends at Viator? Or are you seeing any impact from that at all? And then second one, just to your comments on international and building inventory there as one lever to flex on the go forward. How should we think about potential order of magnitude of investments to help scale in certain international markets and how that's going to impact margin trajectory in Viator next year and beyond? Thank you.

Thanks, Trevor. We've seen competitors getting more vocal about their intentions to aim to take share in our home market. And that's no secret. And we've seen the investment that comes along with it. To an extent, it helps the category as a whole because as travelers become more aware of the experiences category. We think that that's a good thing in general because we're going to participate in that growth. But we really think it's important to address our opportunity with discipline and get the right balance of how we think about market share growth and profitability. I think the market is certainly large enough to support multiple players. It's not a zero-sum game. We feel really good about our progress. And I think it really helps because we have not only that strong foothold but the largest operator base and really highly-rated products, which we think position us well. And of course, we're taking advantage of the scale demand that the Brand Tripadvisor brings, and we can continue to test learn how to grow the relationship between these two brands. And I'll kick off on the geographic expansion point. We do think there are opportunities to leverage both brands think about adjacent international markets. We can go and look beyond the US consumer. We already have meaningful pockets of demand and frankly, Tripadvisor, the majority of its traffic is ex-US. And there are pockets demand there that we are not meeting today. The Tripadvisor brand is relevant. We know that Viator brings some of that supply. We think we can partner and acquire other elements of supply. And I think, it's a little early to talk about levels of investment for 2025 because we're doing the work now. I think you will see that be a growth lever and one that we will go after in a thoughtful disciplined way, but we're excited because we can see real growth opportunity.

I would like to add a few points regarding international inventory. First, we have a significant amount of experienced OTAs available. EMEA is our largest supply area, which aligns with the fact that our North American customers often travel to Europe. The US follows as a second priority, and we also have inventory around the globe that we're proud of. As Matt mentioned, we plan to let user data guide our decisions on where to build and focus our supply, which could vary widely. Our users may indicate that expanding our supply in certain regions outside of major cities is valuable. We see a compelling opportunity in EMEA, given our existing large supply base there, and we are interested in attracting more EMEA bookers in the region. Hence, we are concentrating on investments and experiences related to supply, using data to steer our direction for growth in the app and product experience, and we also believe in strategically acquiring opportunities that can enhance our efficiency as we move into next year.

Great. Thank you, both for all that.

Yes, thanks Trevor.

The next question comes from the line of Jed Kelly of Oppenheimer. Jed, please go ahead.

Thank you for taking my question. I would like to revisit some of the observations regarding Brand Tripadvisor. Can you clarify what aspects are being influenced by normalization? Also, are you experiencing any challenges related to SEO that have been mentioned by other companies in connection with Google? Lastly, regarding experiences, can you explain whether you intend to increase investment to boost growth for Viator in 2025? Thank you.

Yes, I'll begin. Regarding Brand TA, I assume you're referring to Hotel meta. If you want to elaborate on the experiences segment, please let me know. With Hotel meta, there's no additional information we need to call out in this call. It's clear that we are facing headwinds on both the paid and free sides with the travel service. We have consistently communicated our focus on managing this asset for profitability, and we will continue to do so. Our goal is also to seek areas for innovation and improvement for our operators. However, we do not expect this situation to change necessarily; it’s about managing our approach effectively and thinking about how to scale the growth investments that Matt mentioned earlier. As for experiences, if your question pertains to broader investments, as I mentioned before, we have made good and significant investments in the category at Viator. We believe there is still considerable opportunity, especially in supply and the app. We are focused on enhancing our supply acquisition process, ensuring they receive an excellent experience to encourage them to return. Many of these investments will depend on specific locations and targets as we consider geographical expansion. These are the challenges we are navigating during our planning process. I just want to emphasize that we see many great opportunities ahead of us, and we need to be disciplined in our approach.

Yes, the only thing, Jed, that I would add, it's Matt, is when we think about how we manage through some of those known traffic issues, our history is to be one of the best in the world at optimizing SEO. And I think that we've got a fantastic team, and they do a great job. So, that's going to continue. We're going to continue to optimize that. But let's face it's exactly why we put the strategy in place. So we can address those known issues and really engage people and get them coming and repeating and using our app. So, that feels really good. On experiences, we see multiple growth paths ahead. There are source market opportunities beyond our foothold in the US. There are supply categories where we are underpenetrated. There are geographic opportunities through partnership. And of course, there's also B2B opportunities, additional services for operators and partners. So we see a lot of opportunity there, and we're doing our planning now. But I got to tell you, there is a lot of excitement and enthusiasm about how we're positioned and what 2025 will bring.

One moment for your next question. The next question comes from the line of James Lee of Mizuho. James, please go ahead.

Great. Thanks for taking my question. One is on overall kind of broader travel trends in general. You guys noted stable booking windows stay. I was wondering any differences by geo, maybe in the US, Europe and APAC? Are you seeing any change in terms of consumer behavior in terms of trading down? And my second question is more on, Matt, I think you recently commented on the SCIT conference that Tripadvisor is shifting from arbitrage economics to engagement economics. Can you maybe a little bit elaborate on that progress and investment you need to make to transition your business? Thanks.

Thank you, James. You've posed some excellent questions that require a detailed response. Overall, leisure demand is stable and travel intent remains strong. Our surveys indicate that nearly three-quarters of travelers plan to travel this winter. We're observing a normalization in travel, although booking windows are mostly unchanged. There are some variations by region and between domestic and international bookings. Domestic booking windows have increased slightly while international ones have decreased marginally. However, we believe these changes are minor and likely part of the normalization process. Booking windows for experiences remain stable, and while the length of stay has risen compared to last year, it has slowed down from earlier in the year, resulting in modest overall growth. We don't observe significant trends of travelers opting for lower-priced options. There may be some differences in travel intent between high-income and lower-income travelers, and we might see a slowdown in family travel. However, hotel class remains stable, and while the growth in price per night has been reducing, recent months have shown that these declines are easing. It's difficult to predict the broader economic signals; inflation appears to be normalizing, the risk of recession might be waning, and traveler concerns in certain areas seem to be easing as well. So overall, the picture looks stable and positive. Regarding our transition from arbitrage economics to engagement economics, we are making strides with our Brand Tripadvisor strategy. It’s crucial to remember that we are in the midst of a multi-year strategy. Initially, we focused on positioning ourselves to deliver and learn, then moved on to enhancing our products and scaling those improvements, which is driving engagement that we aim to impact financially. Some aspects of our strategy are already delivering financial benefits, particularly in the experiences category, while other parts are still in the rollout phase and contributing indirectly by fostering growth and engagement. We are pleased to see an increase in our monthly active users, and we are noting quarter-to-quarter improvements in both monthly active members and app users. We can observe this strategy progressing in North America as we implement our product enhancements, and we are following closely in non-U.S. markets as we expand further. Overall, we feel we're making progress, and we are eager to see that translate into significant financial performance.

One moment for your next question. The next question comes from the line of Kevin Kopelman of TD Cowen. Kevin, please go ahead.

Great. Thanks a lot. Could you give us your early thoughts on 2025 for Brand Tripadvisor and how you're thinking about managing the growth versus margins in that segment? Thanks.

Hey, Kevin, it's Mike. I'll share a few thoughts. When we consider growth in 2025, we're still in the early phases of our planning. We view our consolidated results as a portfolio and see promising growth opportunities for both Viator and TheFork. For TA, this is a continuation of our strategy, and we're currently at the midpoint of that. This year has been significant for product development, including enhancing our planning tool and revamping our app, which we're very excited about. As we look toward next year, there are two key factors we consider. First, we anticipate continued structural challenges in our core meta business, which may lead to some volatility. Second, it revolves around our strategic investments, specifically in app booking capabilities and experiences on Tripadvisor. We are enthusiastic about what we can achieve in these investment areas. Thus, we need to balance investment levels with anticipated growth, aiming to scale responsibly and with confidence. This is why we deferred some of the Q3 investments to 2025; we want to ensure we're iterating effectively. Our objective is to return to growth promptly, focusing on the level of investment that supports that goal. Some investments lean toward long-term value, requiring more upfront costs to accelerate growth. We're currently working on finding the right balance between growth and profitability. We believe the foundation we've established this year, along with our experimentation efforts, positions us well for returning to growth in the coming years. Matt, do you have anything to add?

Yeah. I think you asked about the comps with regards to some of the changes that have taken place at Google that may have affected TA in the coming quarters?

I think Google has been consistent in its approach. We're not highlighting anything new this quarter. They have implemented various algorithms and updates throughout the year. Our teams are adept at adapting to these changes, especially in terms of SEO. As a brand, TA boasts some of the most comprehensive and interconnected content available. We continue to excel in our efforts in this area. However, the presence of paid ads affects SEO, presenting both a challenge and an opportunity on the paid side. We are focused on ensuring relevancy and acquiring high-intent traffic at TA while managing costs effectively. We have been disciplined in evaluating our return on investments and expenditures, and we will maintain this approach as we manage our assets, especially in preparation for scaling the growth initiatives we discussed.

Thank you. This concludes the question-and-answer session. I would now like to turn it back over to Matt Goldberg, CEO, for closing remarks.

Thanks again, everyone, for joining us today. We look forward to closing the year strong and finalizing our plans for next year. Until then, travel safe.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.