Ladies and gentlemen, thank you for standing by, and welcome to the TripAdvisor Q3 2021 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask your question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker for today, Angela White, VP of IR. Angela, please go ahead.
Thank you, Jay. Good morning, everyone, and welcome to TripAdvisor's Q3 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 close, we distributed and filed our Q3 2021 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 measure discussed on this call. Also, on our investor relations website, 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, November 9, 2021.
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. Before I turn the call over to questions and further commentary from myself and Ernst, I wanted to speak to my transition news. Last night, as you undoubtedly heard, I informed investors and our employees my intentions to step down from the company as CEO at some point in 2022 or as soon as a successor is named by our board of directors. I co-founded TripAdvisor in 2000 with three other amazing people, Nick Shanny, Langley Steinert, and Thomas Palka. Our goal, to help people plan and take extraordinary vacations all over the world, powered by the knowledge of people like you who have been there before. Now, while there's never a perfect time, I feel very comfortable that now is the right time for me to announce my transition.
The hospitality industry is successfully emerging from the pandemic. We're profitable again. We have a great set of leaders in the company, and we were successful in using the time accorded to us during this pandemic to reinvent ourselves, delivering an enhanced focus on our experiences in dining sectors and creating and launching our first subscription product. We have a clear set of priorities, and while we have a lot of work ahead to get there, we have a terrific set of team members who I know are up to the challenge. This company has already changed the way billions travel, and it's extraordinarily well-positioned to create and deliver a new set of innovations in the years and decades ahead.
As a trusted global brand, as the most popular travel website, and as a major influencer in a $5 trillion industry, we are still a story of upside potential in a massive and really fun category. As I said yesterday to my TripAdvisor family, the work continues. I have complete confidence that our experienced board of directors will select a great successor and that TripAdvisor's next chapter will be just as exciting as the amazing journey of the past 20+ years. In the meantime, I will remain at the helm as fully engaged as I am at driving innovation, building teams, and helping our customers. With that, I'll turn it over to Ernst before we take your questions.
Thanks, Steve. Thanks for everyone for joining. We were very pleased to see our revenue and adjusted EBITDA levels step up significantly this quarter from last quarter, reflecting signs of a continued strong return to travel. We're very pleased to see the recovery in consumer travel continue. This is reflected in the gradual return to 2019 levels we've seen over the last few quarters. In some pockets, as we noted in our shareholder letter, we're actually starting to meet or surpass 2019 levels. Revenue in the Q3 was $303 million, reflecting year-over-year growth of 101% and reaching 71% of 2019 levels. We call out that our Experiences and Dining revenue, in particular, is showing a very strong recovery that is not fully reflected yet in Q3 revenue.
For instance, on a booking level, our combined experiences businesses has been up versus 2019 October and the start of November. We're not out of the woods yet with COVID. It's still impacting us, and although we are cautious about Q4, we remain very optimistic that the recovery is taking root and are bullish about travel and our business in 2022. With that, let's jump into Q&A.
Thank you. As a reminder, if you would like to ask a question, please press star then the number one on your telephone keypad. Once again, that's star one on your telephone keypad. Our first question comes from the line of Naved Khan of Truist Securities. Your line is open.
Yeah. Hi. Thanks a lot. Steve, we're gonna miss you after the transition. It came as a surprise, but hopefully we'll see you for the next call as well. I just had a question on your comments on the call. Sorry, on the comments and the
In the letter, you said you're considering options to crystallize the value of TheFork and Viator. Maybe elaborate a bit on the range of possibilities here. Does it include a potential spin off or potentially a sale of the business? Or is it more around optimizing it just for growth and margins?
Hey, Naved, this is Ernst. I'll take this one. We have two very strong assets in Viator and The Fork. They were strong growth companies before the pandemic. They're category leaders in their markets. Viator is a global leader in experiences, a market with a very big TAM. The Fork is a European leader in restaurant reservations, increasingly moving into more fintech areas with The Fork Pay and gift cards. Now, both are recovering very nicely and beyond our expectations, and we believe coming out of the pandemic with even a stronger competitive position and strong leadership teams that operate with great autonomy within TripAdvisor. Now, clearly, the financial profile of these businesses is very different from our core TripAdvisor business. They have higher growth, but also lower profitability due to the investment opportunity that we've been capitalizing on.
They also have clear, identifiable, and proven lifetime value that we can ascribe versus the CPC and media model that we have in TripAdvisor, of course, which makes us more comfortable to spend for long-term benefit, and particularly for Viator, we've leaned in here in 2021. Now we note that pure play category winners like Viator and TheFork in the private and in the public markets get substantial often revenue or gross profit-related valuations rather than an EBITDA multiple, which is the dominant way we believe our TripAdvisor stock gets valued. A more pronounced sum of the parts valuation will make it easier for us to invest appropriately in these businesses and make acquisitions in these businesses.
As such, we believe there are options to better crystallize the right valuation for these businesses, which we don't believe is currently reflected. We are not outright sellers, to respond to one of your questions, of either asset, at least not in the near term. Especially in the case of Viator, there's a strategic importance to TripAdvisor having a significant influence in the company due to the importance of experiences to the TripAdvisor value prop for our consumers. Also, we think there's a value growth opportunity for both Viator and TheFork over the years to come that we definitely want to be part of. There are some options.
One area of options would be to enhance disclosure in our segment reporting, but there's also a family of options that we are considering that go a little further in separating out and separately financing these businesses. Now, we haven't got more detail to share at this point, and we haven't yet committed to any particular course of action, but we wanted to give you a heads up that we are considering options over the months and quarters to come.
Super helpful. Maybe just a related question. If I look at the sales and marketing line as a percentage of revenue, it was higher than what we had thought. I guess you are obviously using some of the funds to kind of grow these businesses, both experiences and dining. How should we think about investment levels in 2022 as it relates to Viator and dining?
Yeah, as I said before, for Viator, we have this year pushed further into our lifetime value model. We feel pretty confident, and we've seen a large consistency in the past in how users come back and how they repeat. We feel confident to spend beyond just the immediate return, and that of course has a near-term impact and increases advertising, but is actually good for our long-term revenue and is ROI positive over a longer-term timeframe. We have gladly done this year, and we've been actually very pleasantly surprised how much we could put to work this year at good ROI levels and grow the Viator business. We've been very successful in expanding the marketing program in that way. We feel good about that.
It is a near-term increase for marketing as a % of revenue as you highlight, but we think it's a good ROI. We think it's good business, and it cements the very strong position that we have. You saw sales and marketing as a percentage of revenue tick down in Q3 from Q2. We are leaning in on the experiences side. We've leaned in a little on the hotel side as well in Q3 and have tapered that into October and in Q4. For Viator, we'll continue. As long as we see the good ROI, we'll continue to spend.
Great. Thank you, Ernst.
Thank you. Next question comes from the line of James Lee of Mizuho Securities USA. Your line is open.
Great. Thanks for taking my questions. Steve, thanks for your leadership over the years. Maybe can you talk about your decision to make that transition next year? Also secondly, in terms of finding a successor, what kind of background and experience you and the board are looking for? Is it more travel related, or is it more technology related? Thank you.
Sure. Thank you, James. Let's see. As I kind of said in my opening remarks, I think this is while there's no right time, I think this is a darn good time to be able to start the transition. As I say, sometime in 2022, I'm looking for it to be, you know, a smooth transition as possible. I certainly wasn't going to make any move over the past 18 months. It was, you know, pretty traumatic all over the travel industry. But when we look at our future now, we see us clearly coming out of the pandemic. I love the new initiatives at play at TripAdvisor. Overall, the business is recovering in all of its parts. It's a pretty good time.
I think we have a strong management team, got new faces, you have tenured faces. Again, while no time is perfect, I think now makes a lot of sense. To the second part of the question as to what the board's looking for, travel experience would be great, subscription experience would be great. E-commerce, that's a core part of our business today and going forward. There's no reason anyone should read into anything about my transition other than kind of what it says on the face. Company is in a good position. I've been at the helm for, you know, by the time I depart, it'll be 22 years. It's a good opportunity, tons of potential in front of the company.
This isn't a question of needing change. This isn't a question of looking to do something dramatically different, and that's but I wanted to give the board plenty of time to select, you know, truly the best leader because it's a gem of a company with a ton of upside in front of us.
Great. Thanks, Steve.
Thank you. Next question comes from the line of Jed Kelly of Oppenheimer & Co. Your line is open.
Hey, great. Thanks for taking my questions. Just two, if I may. One, just on the sales and marketing disinvestment this quarter, I think it was 90% of 2019 levels. Can you speak to is that being more invested in the core hotel platform, subscriptions or any experiences in dining? Can you just speak to the change in the subscription policy going forward and sort of how you think about, you know, TripAdvisor Plus into 2022? Thank you.
Hey, Jed, I'll take the first part, and then I'll hand over to Steve for the second part. In terms of advertising, yeah, we have, I told you, before about the leaning into Viator for marketing at good ROIs. We've seen in our hotel business an ability to spend more compared as a percentage to before, because CPCs have been very strong. Our hotel business in the Q3, particularly in the U.S., was very strong. Our U.S. auction was above 2019 in the quarter. We've seen favorable pricing levels, which always disproportionately favors pay channels. We've been able to lean in there as well.
As I said before, on the hotel side, we've started to taper that in October and into Q4. We wanted to spend into the holiday season in the summer vacation season. That is driving the relative performance versus 2019. Over the longer term, we expect that to start to normalize again for the hotel business. It's just a phenomenon of good CPCs.
Thanks, Jed. I'll take part two there regarding Plus. I couldn't be more excited about what vacation funds this kind of change in the model can deliver for our travelers and of course, how well it works for our suppliers.
Remember the original instant savings model had us offer a discount right up front, but that did cause more supplier-facing problems than we had anticipated. You know, we're nothing if not a nimble company able to adapt. When we heard that feedback and when supply started to be a bit constrained, we shifted. We're in beta testing now with vacation funds, which again offers the hotel rates at retail, but then offers the same economic benefit that just comes a little bit later, and so at the actual stay time. We're working on kind of the flows to make sure that that's well understood. It's literally the same cash that the end user is going to get.
They're benefiting by being able to achieve an impressive savings, you know, stay an extra night, dine at a restaurant, save it up for the next trip, or put it straight to your bank account, as cash and spend it any which way, the traveler wants. For TripAdvisor, you know, for the benefit of the product, this unlocks supply. We're able to get a lot more supply, a lot more hotels available for sale as part of a Plus offering, than we were before. That's really exciting. It's easier for us to onboard independent properties onto the program because we're not asking them to load a, what's called a rate code, a special rate just for TripAdvisor. This is the regular retail rates.
It's not competitive with their own website, and just organizationally and tactically, it's easier on the part of the hotelier. You bring all that inventory on. We're highlighting great discounts at the top of our sort order, delivering really nice additional value to customers. Kinda how we think about it in 2022, we remain focused on the U.S. market. We wanna make sure we get to that product market fit before we expend the energy to roll it out to the rest of our audience. As everyone understands, the U.S. is a very big market, so it's plenty big for us to test against, and we'll continue iterating until we have that fit, and then, as they say, we go international with it.
Thank you. Just so I'm understanding, the hotel would pay that initial discount to, back to the travelers that's coming out of the hotel, even though they're seeing the retail rate?
Well, you can think of it as, from the traveler's perspective, they're looking at a regular retail rate that they use our metasearch engine or they compare it any way they want, and they see that they're paying the same rate that they would pay anywhere else. Then as they go through the shopping funnel, they learn, and they'll also get $150 back, $300 back, whatever the vacation funds number is based upon where they're staying and how long they're staying. As soon as that traveler makes that stay or has the stay, they get pinged with a, "Congrats, your $150 is now in your bank account as vacation funds for you." The traveler can then do whatever they want with those funds.
That's a pretty amazing savings. Underneath the covers, what's happening is we are funding that. TripAdvisor is funding that as a, you know, as a benefit of a Plus Membership. Hotels are paying us the regular commission that they would pay essentially to any online distribution platform. From a hotel's perspective, it's clearly a pay for performance. When we send a booking and the booking happens, the hotel pays us. That's what they're used to doing all day long with every other OTA. Essentially, we're not treated much differently. We look to get an additional perk or two from the properties to otherwise improve the value proposition for our traveler to make that stay extra special.
To the economics, we're funding an amazing discount, far more valuable than regular sort of loyalty points, if you will, from other folks. The traveler gets that benefit, and we get the commission from the hotel. Our financial gain is all of TripAdvisor's win as part of that subscription fee. The $99 that we're charging lands for us and generates the renewal rates, the ongoing revenue stream, as essentially we have the opportunity to fund the loyalty program with the commissions from the hotel program.
Thank you, and good luck in next year, Steve.
No, thank you.
Thank you. Next question comes from the line of Deepak Mathivanan of Wolfe Research. Your line is open.
Great. Thanks for taking the question. Steve, I do wanna mention that we will miss you. Just a couple of questions, a follow-up to the question before. Thanks for all the color on TripAdvisor Plus. It was very helpful. Curious how your conversations with hotel chains and OTA partners, you know, post the model change announcement has been. Are they now more comfortable to come on board? Should we expect kinda, you know, big chains to participate? What are your expectations there? Then sort of second question also related to the prior one about the economics. I mean, with you funding the perks for the travelers offset by the commissions that you get from hotels and then also the cost from traveler, how does it compare to kinda like the cost per click fees that you generate?
I mean, do you think this model is going to be accretive, you know, under this arrangement? Thank you so much.
Thanks, Deepak. Thanks for your kind words. Two excellent questions in there. How have our conversations gone with hotel chains? Let me back it up and sort of point out our or explain our supply perspective. When we were doing instant discounts, we needed to have the chain participation or chain blessing because it was actually lower than what was on their own site. We thought that would work because we would have a paywall. This was a gated, very closed user group. It turns out that that wasn't enough. Now that we've moved to a retail model, we would love, absolutely appreciate the chains participating.
To be clear, you know, in our beta site right now, you see a lot of chain properties already on the system showing the exact same rate as is on the brand.com website. Because it's a regular retail rate, it's not bothering the chains in terms of violating any rate parity. That allows us, through other aggregators, not the chains, to be able to represent that we have, you know, some of the best properties in the world, from the Hilton and the Marriott and IHG and Hyatt, because we're getting them through other sources, sometimes directly through channel managers, sometimes through other aggregators. I'd say it's safe. It's not violating the rate parity piece.
While I invite all of the chains to participate, we're in conversations, some will join now, some will join later, I predict. You know, the point from our economic model is I don't actually need them to participate because we have aggregators, you know, including, you know, our very public partnership with Trip.com, who has access to a lot of global inventory, and that inventory can show up on our site in a rate parity safe manner. To the second question on economics versus our CPC model, do we think that this will be accretive? We think it's gonna be wonderfully accretive.
Part of the challenge/opportunity of having so many travelers looking at hotels on our site is that we offer a lot of kind of free browsing, and we don't make much money 'cause somebody doesn't click. Then when the traveler does click on our meta offering over to an OTA, the vast majority of those clickers don't actually book because they're not ready to or whatever reason. Therefore, technically, we got paid on a CPC, but in reality, since it didn't book, it didn't generate any profits for our clients. It's in effect lowering the value of the next click that we're gonna get.
What I mean to say is the number of travelers that we send to the OTAs that still are not booking is the opportunity that we see to make this a much more accretive model for TripAdvisor. Because we're sending people into our own transaction flow, we're giving them a very clear incentive on why they should book with us, which is all of this cash back, all these vacation funds. If they're gonna save more than $99 on the very first booking, it becomes as we expect a very simple equation. They're charged $99 for the subscription. They have $150 cash back. Maybe they don't even have to pay anything upfront, and we just give them $50 cash back at the end.
Lots of ways to get folks to sign up, and then that's $99 we weren't seeing in the CPC model. Take it the next step, and now you are a paying member to a travel subscription, to a travel club. We believe a number of people are going to say, "Well, I belong to TripAdvisor Plus, therefore I'm starting my next trip on TripAdvisor, looking at the Plus hotels and experiences and all the other offerings." We'll get repeat business in a much higher degree because you're a belonged member. Whether you're making additional transaction, you know, however many additional transactions that traveler is doing over the course of the year, that's all, generally speaking, incremental revenue to us. We monitor the
What TripAdvisor Plus does with the CPC clicks, and obviously, we have to keep a careful eye on that and make sure our own conversion flow more than makes up for the clicks that don't go over to metasearch clients. Thanks.
Very helpful. Thanks, Steve.
Thank you. Next question comes from the line of Brian Fitzgerald of Wells Fargo. Your line is open.
Thanks, guys. Steve, congratulations and we will miss you. Couple things I wanted to ask about was the pullback that you saw in September, was that consistent across regions? Did Europe stay strong in September? Then on Plus, wondering if you're seeing any early indications or dynamics in terms of the, maybe the customer cohorts there, and are you seeing a differentiated use of experiences or Viator or TheFork? Anything with these Plus members that are saying, hey, they're converting into other product usage better.
Uh.
Take the first part.
Excellent questions. Yeah, go ahead, Ernst, on the first.
Yeah, I'll take the first part, Brian, and I'll give it over to you, Steve. In terms of September, we saw more of an impact in the U.S. on the Delta. Europe had been recovering. Well, the U.S. was the first to recover, as you know, in Q1 and Q2, much stronger than Europe. Europe sort of caught up from a traffic perspective in Q3, and we saw revenue improve throughout Q3, including September. Now, was that impacted by Delta? Maybe it would have grown even more without Delta. We saw more of a sort of step back as a result of Delta in September in the U.S.
Now, in October, that has been moving up again in the U.S., but that was the more pronounced impact geographically of Delta for us.
Thanks. With regard to Plus, I've candidly, we've been kinda really focused on our shift to vacation funds and how we clearly present this value proposition to the traveler. Excellent questions on, hey, have we seen cohorts of existing Plus subscribers now move over to experiences? But truly, we haven't been kind of focused on building that up yet with our efforts clearly of targeting the you know that golden pot of 160 million times that people click over on expensive trips that should be great Plus candidates.
Got it. Thanks.
Thank you. Next question comes from the line of Mario Lu. Barclays, your line is open.
Great. Thanks for taking the questions. I have two more follow-up on Plus. So you already mentioned you know some hotel chains and aggregators were added to the platform. Any way to help quantify how meaningful the number of hotels were added to Plus after the change to the vacation funds was made? And then similarly on the customer side any color you could provide on you know if this change impacted conversion or user engagement. Thank you.
Thanks, Mario Lu. Excellent questions. Those are kind of the exact ones that we are studying, looking at, and trying to grow. With respect to the number of new hotels, I simply point out we're able to tap into a lot more of the Trip.com inventory as an example because they had a bunch of properties that had a special rate that we had put live on instant discounts. Obviously they have way more properties at a regular retail rate. With the vacation funds model, all of a sudden, all of those properties can come online. Similarly with some of the other aggregators we work with, there was just more flexibility in being able to bring on more inventory so long as we kept the rate at parity with other sites.
We also had our independent supply efforts, and this would go back several years, but we had signed up quite a few independent properties that connected directly with our back end that would offer their rates. By not having to go reach out to those properties and negotiate a specific discount, we're able to bring all those properties live essentially immediately because they were kinda already signed up. You know, that's in the thousands, but it's closer to a handpicked thousands. The most interesting part of the question is really that conversion rate and how is it going. I can't offer much at this point because we're just rolled out to a fraction of just our U.S. audience. But that's key.
We need to make sure that the language on the site explaining the value proposition, the flow, the ability to easily book a vacation funds property or Plus property because the photos are good, the rooms are well understood, the payment happens smoothly, the errors don't exist, getting the bugs out of the system. That's basically the stage we're at now as we test it on a small slice of the traffic. As we make improvements and as it becomes better and better, we roll out more and more, and obviously we hope for a 100% rollout as soon as we can.
Great. Thanks, Steve. That's very helpful.
Thank you. Next question comes from the line of Tom White of D.A. Davidson. Your line is open.
Thanks so much. This is Tej Vassan for Tom. First question, I was wondering about your monthly unique user trends in Q3. They seem to improve and sort of in line with the trajectory of revenue recovery. Can you talk a bit about specifically what you're seeing in terms of user engagement, maybe the specific region, the type of trips, the willingness to book and spend, and whether this engagement differs in any meaningful ways from earlier phase of pandemic. Thank you.
Hi. Yes, we saw a step up again in users as a percentage of 2019 in the Q3. We were at sort of 70% in the Q2, and we went up to 76% in the Q3. I think the most important trends to point out are geographic. Where we saw that the U.S. was clearly ahead in terms of traffic recovery in the first and Q2 to the rest of the world, Europe really caught up to it. In the Q3, Europe and the U.S. were sort of very similar in traffic as a percentage of 2019. That's one important trend. Europe starting slow this year, but catching up in the Q3.
The rest of the world, also a significant part of our usual traffic outside of the U.S. and outside of Europe, has been much slower to recover and is therefore dragging down the overall 76% versus 2019 that we reached in the Q3.
Thank you. For my second question, I was wondering, in regards to the HM&P segment, you mentioned that the monthly revenue is down. It dipped a little bit in September versus July, August and September as a percentage of 2019. Could you elaborate a bit on that and talk a bit more. I know you've discussed briefly about October, but a bit more on how October looked in that segment. Thank you.
Yes. September was. Someone asked a question before about the impact of Delta. We saw an impact of Delta, we believe, in September in the U.S. That impacted HM&P. The CPCs have continued to be strong in September, and the behavior of our partners in the auction has been very consistent and similar, but volume was impacted as a result in September. We've seen improvement of that environment in October. I also said earlier in the call that we tapered some of our marketing in October and into the Q4. That's going to impact. We leaned in more in the Q3.
The general environment in October for the U.S. has improved from September, clearly.
Great. Thanks so much, and congrats on the new chapter, Steve.
Thank you.
Once again, if you would like to ask a question, please press star then the number one on your telephone keypad. Next question comes from the line of Vince Ciepiel of Cleveland Research. Line is open.
Great. Thanks for taking my question. I'm curious, when you look at the existing base of TripAdvisor Plus members, you know it's still a newer program, but do you see anything interesting in terms of engagement or repeat booking activity of TripAdvisor Plus members versus the average user on TripAdvisor?
Good question, Vince. You know, we do see repeat bookings from Plus members. That's nice. Unfortunately, we don't really have a great way to compare that to whether those are just people who travel a lot and would be repeat booking through our metasearch because, you know, we don't always see, we frequently don't see their actual booking behavior. Yes, it's nice to see we have more Plus bookings than we have Plus subscribers, if you will, 'cause people are coming back and booking more. But and clearly that's benefiting us, but I can't compare it to another site terribly well at this point. It's one of the things that we watch in terms of... We think the Vacation Funds model will give us kind of yet another data point on that.
There's a reasonable thesis that says an instant discount kinda sounds great, you get the money right there, but a Vacation Funds model where you're sort of building up a bank, knowing that you can take that bank and take it as cash anytime you want, it's as good as cash. One way to think about it is an extremely rich loyalty program. The other way to think about it or a complementary way to think about it is it's building up a bank of things that you can continue to do on TripAdvisor. People have expressed to us they like the notion of saving for that next trip.
They like the notion of, hey, doing a few more purchases on TripAdvisor so that they'll have some more funds saved up, again, for the same trip or the next trip, but it's a, you know, it goes back to the travel jar that some folks used to have, where you just save some extra money along the way to go spend on that wonderful trip. I think we're tapping into a bit of that for a segment of our audience. We see that, I think, in some of our repeat bookings.
Thanks. My second question, I think earlier on the call you mentioned that the commission the hotel would be paying wouldn't be that dissimilar to what they would pay other OTAs. I'm trying to think about the economics from a hotel perspective. If they're paying a similar commission as well as providing an amenity and a potential upgrade, how does this channel compare in total cost relative to other distribution channels with Plus?
Excellent question. We're quite flexible on the hotel side. When we approach an independent hotelier, for instance, we have perhaps a minimum commission, but then we point out the better deal that we can present to our traveler means you're gonna get more visibility on TripAdvisor. Let's say a hotel might pay a, let's call it a 15% commission. That's probably less than what they're paying to other OTAs, so it's a bit cheaper of a channel. That might be a hook for us to help persuade the hotelier that it's worth signing up. Mind you, it's very easy to sign up, so there's no organizational or there's no logistical or a technical barrier there.
We get the hotel to sign up, and then, you know, the message is, and if you add a perk, and it could be as simple as a bottle of wine, a fruit plate, a free upgrade if available, there's a little bit of a very small amount of cost, maybe. And then because that offer looks more compelling on TripAdvisor, it rises higher in our sort order, and hopefully, that hotel receives more bookings. They don't have to have it, but you know, many properties are, it's relatively easy for them to offer a, you know, $20 off a $50 dining charge. It helps get them in the restaurant. It helps get them spending the money on premises.
The whole notion of Vacation Funds allows someone to build up this credit, and we encourage the hotel, and we can help the hotel market the ancillary services, whereby those credits can in fact be spent on property. Hotels love that. Travelers appreciate the ability to get the extra amenity or the extra thing at the hotel. It's all up to the property if they wanna participate kinda in exchange for more demand. That's how we view our ecosystem working.
Thanks for the color, Steve, and best of luck in the next chapter.
Thank you.
Thank you. Next question comes from the line of Kevin Kopelman of TD Cowen. Your line is open.
Thanks so much. I had a couple questions. First, could you talk about how you think about TV advertising and whether now that we're in the recovery, whether you would consider returning to TV?
I can start with regard to TripAdvisor Plus, as I've said before, we feel we have an extremely highly qualified audience already on our site who we have the ability to educate as they are shopping for a hotel. While TV is, you know, phenomenally effective for overall brand advertising, for raising overall awareness, we feel we have plenty of traffic on our site today at the right point in time that we can educate, drive home the benefits of TripAdvisor Plus without spending an incremental dime. Once we have the product market fit and are on the growth ramp that we're really excited about, you know, amen to all different vehicles that enable us to put fuel on the fire.
I'm pretty clear I wanna be able to show we need to be able to show ourselves, and then we would be sharing with you that you know this thing is a rocket ship, and here's why putting more fuel on the fire would make a lot of sense. I don't think I'm of the mindset that I should do that level of branding on a speculative nature. I think there's another angle as to whether we approach television for our Viator and TheFork businesses 'cause they are in a different investment mode. They have a different opportunity to capitalize on share gain, and they're also doing extremely well right now without any of those other media pieces.
I don't view it as something that is necessary, but certainly could be additive over the course of next year in those other brands, if we choose to do so.
Thanks. If I could ask an unrelated question. Could you give any more color or detail on how we should anticipate the experiences in dining? Or let me rephrase that. How well it did in the month of October for revenue? Because I think you alluded to the bookings being higher than the revenue trend for Q3. Any color on how that trended into October would be helpful. Thanks.
Yeah. We saw a bit of an impact from Delta in September also on the experiences business. Experiences roared back in October, doing really strongly. As we called out on a bookings level, of course, bookings are a leading indicator of revenue because the revenue recognition is at consumption rather than at the time of booking. On the booking level, combined experiences, points of sale, Viator, TripAdvisor, third party were above 2019 levels, which is very encouraging, and has been sort of the last step in a very strong recovery this year, getting bookings above 2019. What is strong about that is that Viator was clearly leading the way earlier in the year.
Viator is well above that level of above 2019 on the bookings level, but TripAdvisor's been catching up. To be above 2019 on a bookings level for the combined points of sale and experiences is just a very strong signal for us that this market is coming back strongly and that our position is very good in it. We're very pleased with that.
Great. Steve, I will definitely miss you on the calls, and best of luck.
Oh, thank you. Thank you very much.
Thank you. Next question comes from the line of Doug Anmuth of JP Morgan. Your line is open.
Good morning. This is Doug Anmuth. Thanks for taking the questions. The first one, with regard to your strong performance and experiences, are you seeing any evidence that travelers are increasingly booking ahead because of the pandemic? Is this a behavior that you think could accelerate the adoption of online booking and experiences coming out of the pandemic? Secondly, for TripAdvisor Plus, in the letter you talked about, for travelers coming to your site, removing the paywall to see savings on hotels. Can you elaborate on that comment a little bit, on what that means?
On the first part, the sound quality wasn't great. You were asking is this experience evidence of what? Sorry, can you say that again?
Are you seeing any evidence that travelers are increasingly booking ahead because of the pandemic, and if this is a behavior that could accelerate the adoption of online booking and experiences coming out of the pandemic?
Yeah. I think we're seeing a number of very important trends appearing. One was a direct result of the pandemic, is that we've seen a lot more domestic experience consumption. That was very strong. We tended to index on international travel, Americans going to Rome or to Paris or to London, but we've seen such a strong performance of our U.S. and European customers actually consuming experiences locally. Domestic was very strong. Where pre-pandemic we skew to city experiences, we start to skew to more outdoorsy experiences, either water sports or hiking or canoeing. That was a large, big market that opened.
What makes us feel very optimistic now is that we have clearly established an ability in the minds of our consumers to be very relevant in these more domestic and more outdoorsy experiences. Great, we expect that to stay as we recover from COVID. Then, city travel is coming back, but not yet at the levels that it was before. International travel definitely is lagging behind where we were before. What makes us optimistic is we've established now deeper penetration in domestic and outdoors, and when international and city comes back in full force, we think that will be additive for the business. Strong signals, we think.
I would add that I think we're playing to a very macro trend of people looking to do more on their vacations, combined with your ability to book on the phone, combined with the bringing of this inventory online over the past decade. I think we're seeing the tipping point where more and more folks are planning to book what they're going to do online. You know, we're in the pole position there. We've got, you know, Viator has a beautiful business strategy of licensing their inventory to all the major distribution channels. Of course, TripAdvisor is also one of them.
Having a tremendous supply footprint, great products, all, you know, all interesting markets, key things that you want to do, and that you wanna make sure you have a seat on that tour before you get there, because you know, it's too scary to arrive in your destination and not know if you can do it. COVID, I believe, accelerated because you wanna know what's open, you wanna know the cleanliness, your safety concerns, all the rest of it. We've taught people how easy and convenient it is to book in advance. Experiences has always been referred to as the last of the major categories to come online after air and hotel.
We see COVID having taught people the ability and sometimes the necessity of doing this booking online, and I think we're gonna benefit from that trend, you know, for decades to come. To your.
There's a simultaneous trend next to the planning in advance, which is, because the phone has become much more important also for experiences, there's also an increased ability to actually book things while you're on the trip. One of the big opportunities that we have and have been capitalizing on is, if someone has planned in advance and did an experience, we can help them do another experience on the trip. It is both increased planning upfront, but also an increased ability in market to market to them. Let's see, one second.
To your second question on TripAdvisor Plus and the paywall, sorry for the strange reference. In the current instant savings model, some of the properties that you click through to find the discount, you can book immediately. Other properties, you have to actually buy Plus first, and then we will show you what the discount is on all those rooms. We refer to that as a paywall experience. In both cases, or in the first case, you're buying Plus with the transaction, but in the second case, you actually have to make the purchase before you can see all the room details. That's a natural barrier to customer adoption.
It's something we had to do because of the supply challenges, and that whole aspect completely goes away in the Vacation Funds model. You know, we know that that's gonna be a big win from the consumer side of things. It's another reason why I'm particularly excited about the upcoming launch of Vacation Funds.
Great. Thanks for the color, Steve. Good luck, and we will miss you as well.
Thank you.
Thank you. There are no further questions at this time, and I would like to turn the call back to Steve for closing remarks.
Terrific. Well, thank you. Thank you everyone. A very special thank you to all the TripAdvisor team members all around the world who continue to put their all into helping hospitality businesses, travelers, diners emerge from this pandemic. We're quite optimistic. We're extremely optimistic about the recovery of our industry and look forward to updating you next quarter on our core businesses and all of our new initiatives. Thank you again, and stay safe.