Good day, and thank you for standing by. Welcome to TripAdvisor's third quarter 2026 conference call. I would now like to hand the conference over to your first speaker today, Angela White, Head of IR. Please go ahead.
Thank you, Therese. Good morning, everyone, and welcome to TripAdvisor's third quarter 2026 financial results call. Joining me today are Matt Goldberg, President and CEO, and Mike Noonan, CFO. This morning, we filed and made available our earnings release. In that release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measure discussed on this call. Before we begin, I would like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today, November 5th, 2026. 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 will turn the call over to Matt.
Thanks, Angela, and good morning, everyone. Earlier this morning, we issued our earnings release, which I hope you have had a chance to review. Mike will cover our quarterly performance in more detail in his section. Before we want to get into earnings, I would like to address this morning's announcement regarding our leadership transition plan. I will remain as CEO through mid-February, and I am committed to working with the board and our leadership team to ensure a smooth and seamless transition. The board is working with an executive search firm to identify candidates to lead the company through its next chapter. As part of that announcement, we also shared that Mike has decided to pursue another opportunity outside the company and will depart at the end of the year.
We are fortunate to have a deep bench of talent, and Kristen Dalton, our current head of strategy and operations and former VP of FP&A for the company, will step in as interim CFO beginning January 1st, 2027. TripAdvisor Group today is a different business than the one recovering from the pandemic when Mike and I joined in 2022. Experiences is now at the core of the company, and we are positioned for an increasingly AI-driven travel ecosystem. The Experiences segment has scaled to nearly $5 billion in gross booking value and now contributes the majority of revenue for the group. We simplified our capital structure and closed the sale of TheFork this week, strengthening our balance sheet and providing financial flexibility. I am impressed by the hard work, commitment, and extraordinary talent of our teams across the organization.
I'm particularly proud of our people for their resilience as they've navigated changes across the travel industry that have created known headwinds in our legacy business lines. Clearly, there's more work to do, but we have valuable assets, a strong financial foundation, and a group of people that I believe represent some of the very best talent in our industry. Now to earnings. I'd like to focus on where TripAdvisor Group is today and how the company continues to shape its position to succeed in an Experiences category that continues to grow and evolve. 2026 has been a year of strategic transition, progress, and significant learnings. We've completed the sale of TheFork, which gives us enhanced capital flexibility. We've taken actions to further simplify our Hotels and Other business and aligned our operating model around our highest priority growth driver, Experiences.
We continue with our portfolio review, which includes evaluating strategic alternatives aligned with our stated priorities, simplifying our legacy business lines, and focusing resources on our growth opportunities. We're taking decisive actions to prioritize resources, sharpen our investments, and improve operational focus to move faster at scale. First, in Hotels and Other, we're aggressively aligning costs with our revenue profile, protecting cash flow while preserving our valuable brand, reach, community, content, and data. Second, we intend to allocate capital in a disciplined manner to maximize shareholder value. Third, we're focusing our execution and investment around Viator, designed to re-accelerate growth in Experiences. Starting with Hotels and Other, we're taking important actions to further simplify our legacy offerings and shift to a leaner, more nimble operating model, allowing us to increase the investment in Experiences, drive faster execution, and accelerate growth.
Yesterday, we announced a comprehensive global restructuring, which impacts H&O segment roles and shifts roles in product, engineering, and data analytics to the Experiences segment. The net impact for the group as a whole is approximately $40 million of gross annualized savings. Although this was a difficult decision given the number of people impacted in H&O, we believe it's the right approach to transform the group. The action in Hotels and Other is designed to run the segment at a smaller scale and allows us to retain our focus on the most important and valuable aspects of our brand, our content, community, and trust. By paring back fixed costs across highly variable and non-core revenue lines, we're also moving to stabilize segment cash flow. TripAdvisor still offers a unique and scaled platform in travel.
Despite top-of-funnel headwinds, the site remains one of the most accessed research, discovery, and validation sites in travel, with its unique content and data assets. These characteristics have been key to the planning experience, with tools such as our onsite AI chat option, designed to help travelers plan, explore, and make in-destination decisions. It also remains a reliable source of leads for our OTA and industry partners. The community and platform continue to provide tangible value to travelers, who in turn build value through contributions to our UGC. We see this value evidenced in unique contributor trends. Year-to-date, unique contributors are stable to marginally down year-over-year, versus secular-driven double-digit declines in traffic. And new contributors have remained a consistent portion of total contributors, providing refreshed UGC. Importantly, our contributors are driving positive growth in the number of reviews and photos in our top categories, hotels and Experiences.
Additionally, the more engaged a contributor, the more they visit, book, and come to us directly. Not surprisingly, contributors have higher-than-average monetization profiles. This community fuels the rich content and data that our hotel and OTA partners and LLMs find so valuable, whether as a source of highly qualified leads or as a source of content through licensing or AEO citations. In short, at TripAdvisor, leaner teams will focus on more impactful, personalized guidance by deploying the valuable assets we've developed over many years, authentic contributions, content, and our trusted relationship with travelers. As we incorporate these assets into our native AI experience, LLM integrations, and partnerships, we can better connect travelers to partners in our most monetized and profitable offerings. Second, this week, we officially closed the sale of TheFork, generating approximately $685 million in net available proceeds.
We expect to prioritize the reduction of long-term debt to preserve balance sheet strength, reduce interest expense, and maintain strong liquidity. We believe our healthy balance sheet provides flexibility as the company completes its portfolio review and finalizes 2027 planning. Finally, we remain focused on accelerating our growth in Experiences, the most compelling area of travel, where we believe we're well-placed given our strong market position in the U.S., global supply base, and expansive B2B2C partner roster. We believe the increased interest in the category over the last few years is a reflection of the attractiveness of the opportunity. That said, performance has clearly been mixed throughout 2026. Macro factors have played a role, including weakness in the North America to Europe corridor, historically our largest. We faced ongoing SEO headwinds in our TripAdvisor point of sale.
Our execution hasn't always been where it needed to be upon combining our Experiences operations. While we believe the strength of our brand and offering positions us attractively, the marketplace remains competitive. A year ago, we made the decision to bring Experiences teams across TripAdvisor and Viator together, because while we recognized the distinct role each brand plays in travel, we believed it would create product and marketing efficiencies. This hasn't proved out as we expected, which is evident in our last 12-month performance across our points of sale. While Viator and B2B2C Experiences booked grew in the low teens, the TripAdvisor channel declined by high single digits. Despite increased marketing investment on TripAdvisor, returns have been slower to materialize as we navigate known SEO headwinds, which in turn has affected our ability to scale spend in Viator, particularly in newer channels where early returns have been positive.
Similarly, product and engineering efforts spread across both platforms have slowed conversion gains in Viator, our primary Experiences OTA. The takeaway is clear. Competing investment priorities are delivering uneven returns. Moving forward, we're focusing our primary investment behind the single higher return Viator OTA flywheel, aimed at driving sustainable LTV to CAC improvements in areas such as conversion, repeat bookings, and app adoption. TripAdvisor will continue to serve as an efficient top-of-funnel discovery engine and partner lead source. This more focused approach maximizes ROI across performance marketing and product development, while positioning us to unlock accelerated growth and long-term margin expansion for our Experiences segment. Ensuring the compounding effect of a single flywheel is especially important as we expand from our more mature markets and categories and into growth geos and new categories.
It also enhances the strategic value proposition for third-party and B2B2C partners with access to large quality supply base. Focusing clearly on a single flywheel also positions us well in an evolving discovery and booking environment. Our marketplace model is resilient to disintermediation by upper funnel LLMs, given the complexity of a fragmented supply base of small operators, complex transaction management, and customer service requirements for both sides of the marketplace. This, combined with our reviews, quality rankings, and availability signals, surface better recommendations within these channels. Viator is already working across all major AI platforms today, including Anthropic, OpenAI, Gemini, and most recently with Meta Muse. It is early, and volumes are still low, but signs are positive. Bookings through MCP partner integrations convert at better-than-average rates and higher booking values.
In AI discovery, our brands lead in share of citations for Experiences prompts, and the resulting AI traffic converts well above the site average. I want to conclude by stepping back and putting TripAdvisor Group today in context. Our assets are well-positioned to meet traveler needs in an evolving AI-first landscape. We help travelers decide what is worth doing and turn those decisions into bookings. TripAdvisor brings trusted, constantly refreshed traveler insights, while Viator brings a global marketplace of bookable Experiences. Both continue to provide tangible value to travelers and partners alike. As consumers increasingly turn to AI assistants and agents, those platforms need reliable travel information, live availability, and the ability to complete a reservation. TripAdvisor Group brings all three, positioned to serve travelers wherever their journey begins.
Our existing AI partnerships and strong early referral conversion rates support the opportunity to become an essential source of travel intelligence and bookable Experiences in an increasingly agentic world. We exit 2026 with a simpler, more focused business, better placed to succeed in an evolving environment. Our teams are laser-focused on our execution, and we are investing behind our growth engine to maximize the Viator marketplace flywheel, and moving to a streamlined and agile model for TripAdvisor, all of which sets a strong foundation for the future. With that, I will turn the call over to Mike.
Thanks, Matt, and good morning. I will start with a review of our financial results, then provide more detail on the impact of our cost reduction actions, as well as some color on recent trends and outlook for Q4. As a reminder, all growth rates are relative to the comparable period in 2025, unless noted otherwise. Turning to the quarterly results. Consolidated revenue was $436 million, or a decline of 11%, and adjusted EBITDA was $71 million, or 16% of revenue. Starting with Experiences. Demand shifts and marketing spend adjustments impacted booking performance, particularly in August, when bookings growth decelerated relative to July and fell short of expectations. As a result, Experiences booked in the quarter grew 2%, with performance varying significantly by point of sale. Bookings on our Viator platform grew 4%. The TripAdvisor platform declined in the low teens, and third-party points of sale grew in the mid-teens.
Persistent SEO headwinds created an approximate 3% growth headwind to segment bookings for the quarter. On the demand side, booking trends in the U.S. to Europe corridor weakened further from last quarter. Given this quarter's share of total mix, the softness meaningfully impacted overall segment growth. Meanwhile, in our other primary corridor, U.S. domestic, low double-digit bookings growth in July decelerated as we moved through the quarter. Overall, demand continued to be impacted by macro headwinds and weather disruptions. For example, bookings with a shorter booking window slowed to a greater extent during these disruptions, while the related rise in cancellation rates weighed on revenue. We also saw uneven performance in our SEM channel through the quarter. In August, we witnessed a decline in available clicks, which impacted growth for this channel.
This also coincided with a planned shift in spend to newer, less scaled paid channels in efforts to drive long-term channel diversification. Although we believe this created some in-quarter growth headwinds for the Viator point of sale, we believe this is the right long-term investment to drive durable growth with better unit economics over time. Gross booking value, or GBV, was flat year-over-year. Changes in currency were a headwind to growth of approximately 1%. Excluding currency impacts and volume, GBV trends reflected modest pressure on average booking value, or ABV, driven by a lower mix of U.S. to Europe bookings, which typically carry higher ABVs, as well as lower average values and slower growth in our higher-priced booking tiers. SEO headwinds created an estimated 3% headwind to segment GBV growth. Experiences revenue declined 3%, which includes a currency headwind of approximately 1%.
Revenue growth was further pressured relative to GBV growth, primarily due to increased cancellation rates, and to a lesser extent, lower take rates. Higher cancellation rates were driven primarily by the travel disruptions previously noted. Year-over-year take rate pressure was primarily due to testing and discounting, and to a lesser degree, the lower U.S. to Europe mix, given its typically higher take rate. Adjusted EBITDA for the Experiences segment was $38 million, or 13% of revenue, down 440 basis points. Leverage in personnel costs partially offset increased marketing as a percent of revenue. Year- to- date, higher marketing spend as a percent of GBV has been driven primarily by SEO headwinds and marketing channel mix shift on the TripAdvisor point of sale. Marketing spend on the Viator point of sale remained largely flat as a percentage of GBV, despite incremental investments in new channels.
As a percent of segment revenue, marketing deleverage reflected these GBV trends, compounded by higher cancellation rates. Moving forward, concentrating on the Viator point of sale flywheel- Combining integrated marketing campaigns with product and supply enhancements is expected to drive higher growth and expanding margins. Turning to the Hotels and Other segment, revenue declined 23% to $152 million. Hotel revenue fell 23% to $110 million, primarily driven by lower volume and, to a lesser extent, lower pricing, although overall pricing levels remain historically strong. Media and advertising revenue decreased 23% to $28 million as ongoing uncertainties in the Middle East weighed on partner ad spend. Adjusted EBITDA in Hotels and Other was $33 million, or 22% of revenue, down approximately 650 basis points. De-leverage was driven by lower revenue, which offset the benefit of lower fixed costs year-over-year.
As Matt noted, going forward, we will be moving toward further simplifying the segment and accelerating investments in Experiences. He covered our strategic rationale, but I would like to cover specifics of the anticipated near-term financial impact. The restructuring is expected to result in annualized gross savings of over $55 million to the H&O segment by reducing global employee and contractor roles by 425, or approximately 60% of our H&O dedicated roles. Of that, approximately 150 roles, or approximately $15 million in associated costs, will move to the Experiences segment to increase resourcing there. The result of this action is expected to result in group annualized savings of approximately $40 million. This action does not include savings associated with any third-party vendor costs, which we will pursue in the fourth quarter. Given timing of notifications for impacted employees, we expect very little cost benefit this year.
We estimate a restructuring charge of approximately $15 million-$20 million in Q4. Now, turning to consolidated expenses, which on a GAAP basis include a goodwill impairment charge of approximately $369 million. We assess the carrying value of our goodwill annually, and given the financial performance over the last year, we concluded that the fair value of the H&O segment was lower than its carrying value. As such, we have reduced our goodwill on the balance sheet to reflect this assessment. Cost of revenue in Q3 was 9% of revenue, higher by approximately 110 basis points. This is primarily driven by a higher mix of Experiences and some modestly higher costs in H&O. Marketing costs were 49% of revenue, an increase of approximately 550 basis points.
This was driven by ongoing free-to-paid channel mix, primarily impacting H&O and the TripAdvisor point of sale in Experiences as a result of persistent SEO headwinds. Personnel costs were 22% of revenue, down approximately 370 basis points. This reduction was driven primarily by lower expenses in the Hotels and Other segment, alongside decreased share-based compensation expense resulting from Q4 2025 cost savings program forfeitures and lower annual grant values starting in 2026. Excluding SBC, personnel costs represented approximately 18% of revenue, a decrease of roughly 200 basis points. Technology costs in Q3 were 5% of revenue, an increase of approximately 70 basis points, primarily driven by higher licensing fees associated with AI token spend as we position our teams for faster execution and productivity gains. G&A costs were approximately 4% of revenue, higher by 90 basis points, related to an increase in legal reserve expense.
Now, turning to cash and liquidity. In Q3, operating cash flow was - $122 million and free cash flow was - $131 million, reflecting normal seasonal working capital swings as well as timing of certain accruals. Total cash and cash equivalents at September 30th were approximately $707 million. Excluding deferred merchant payables of $397 million, our available cash balance was approximately $310 million, and our total debt was approximately $834 million. On November 1st, we closed the sale of TheFork and received approximately $685 million in net cash proceeds. Our post-close balance sheet is approximately $1.4 billion, with available cash just over $1 billion. The closing of TheFork provides us flexibility in our capital allocation choices, and at this time, we are prioritizing a strong balance sheet. As such, we currently expect to use a portion of the proceeds to reduce debt.
Reducing debt while preserving strong liquidity puts the company on strong footing while leaving other capital allocation options available. With respect to share repurchases, we remain unable to be active in the open market while a portfolio review process continues. Turning now to recent trends and outlook for Q4. As we consider the remainder of the year, several factors shape our outlook. October bookings growth weakened modestly from our exit rate in the third quarter, driven by continued softness across long-haul corridors and the impact of our marketing diversification efforts. Additionally, late in the month, protests in Europe began to weigh on demand from both inbound and intra-European travelers. Consequently, sequentially, we expect group revenue to decline to the low teens, reflecting a modest acceleration in Experiences declines, which includes a slight currency headwind, and flat performance in H&O compared to Q3.
For Experiences, we expect bookings to remain roughly flat year-over-year, which assumes Q3 trends continue. For group adjusted EBITDA, we assume margins to step down sequentially to the low to mid-single digits, driven by approximately break-even adjusted EBITDA in Experiences as we continue investing in paid channel diversification. Our focus on sharpening execution and deploying targeted investments is expected to position the Experiences segment for an improved growth profile in 2027. While it's too early to provide specific guidance for 2027, our teams are actively establishing strategic priorities for the year. In Experiences, given the vast global opportunity and our strong position as a leading platform, we will prioritize investments aimed at driving durable top-line growth over margin expansion. The added resources from our restructuring put the teams in a good position to start the year in full stride.
In Hotels and Other, we are prioritizing a smaller, leaner operational footprint and a more durable margin profile, recognizing the secular trends that have driven top-line declines, which we expect to abate over time as we work through the SEO headwinds. Overall, 2027 is designed to establish a solid operational baseline to support profitable long-term growth. Before I pass the call back to the operator to begin Q&A, I'd like to take this opportunity to say that it's been a privilege working with my colleagues across the company. I would like to especially thank my dedicated finance team who have provided tremendous support over these past four years. I wish the company all the best and look forward to following the company's continued progress. With that, I'll turn the call back over to the operator for Q&A.
Thank you. Our first question today is from Richard Clarke with Bernstein. Your line is open.
Yes. Hi. Good morning. Thanks for taking my questions. I guess just the first one on capital allocation, just if you can give us any hint, Mike, what is the right level of debt given the shrinking business? How much of that $840 million do you want to pay down? When is this portfolio review going to come to an end, and when might you like to buy back shares, and would you like to buy back shares at the end of that portfolio review? Then just a question on the Experiences business. You said you'd focused on just the Viator channel. Is that also to mean that the B2B2C channel is also being deprioritized? There was an article about you working with Airbnb. Maybe if you can provide some details there and whether that is also being taken out.
It's really just Viator as the only Experience channel going forward.
Yeah. Thanks, Richard. I'll take the first piece of capital allocation, and then Matt can talk about that good question on the B2B2C. Capital allocation. So listen, I think we are very open-eyed as to seeing the pressures on EBITDA from our legacy business, and so we absolutely want to maintain a strong balance sheet. The quantum of that paydown, I think we will resolve very shortly over the next several weeks, so we're not really going to announce that yet on the call. But it would certainly align to the high-level priorities, which is making sure aggregate debt is at appropriate levels for the financial profile, but then also maintaining strong liquidity, right? And so we'll kind of guide that paydown by those two broad dynamics.
As relates to the buyback question, I think we have been pretty consistent around the portfolio review process, which is an important comprehensive review we've been under for some time, does prevent us from being in the open market doing that. We have always stated that our capital allocation priorities have been around strong cap structure, deploying capital for buybacks, and then inorganic growth. We just said that we are prioritizing the debt repayment first. I think share repurchases are an important component of that, and as you can imagine, once we will be available to do that, it will be a time to evaluate things in that order, which is around where the shares are trading relative to views of value. But it certainly remains in our prioritization, as we've historically said. So Matt, I'll let you talk.
Yeah. Thanks, Richard. On the B2B2C, I want to be super clear. No, we are not deprioritizing B2B2C. That is a very important channel. What we are doing is focusing on the Viator flywheel, where we can see that focused resources will drive the greatest impact on the B2C side. We will leverage TripAdvisor as an important source of demand and leads. We will simplify that relationship so that we do not have the complexity that we have had in our organization. We think that will be a net positive. B2B2C and our third-party points of sale are an area of great strength for us. That channel is growing faster than average. It is mid-teens year-to-year, and our 3P business accelerated sequentially from last quarter. And we view these partnerships as profitable and incremental to our growth that we would not otherwise achieve on our own. You mentioned one partnership.
We look at many different partnerships. We see headroom for growth there. B2B2C and 3P will continue to be an important channel. But it is our Viator flywheel that we think on the B2C side is going to lead the way for us.
Thanks, both, and pleasure working with you the last few years. Good luck in the future.
Thanks, Richard.
Thanks, Richard.
Thank you. Our next question is from Naved Khan with B. Riley Securities. Your line is open.
Great. Thanks a lot. Couple of questions. Maybe just on the Experiences side, can you maybe double-click on the performance across the different point of sale versus one of your peers, which seems to be performing better growth-wise. And maybe just talk about if the pressures are more competitive in nature versus maybe some pressures related to what's going on in search and agentic AI channels. Given that all players kind of are in the same sort of operating zone, meaning everybody's seeing the same pressure. So, just talk about your performance and maybe what might be weighing more in this kind of environment.
Great. So, Naved, I'll take the first one around the different points of sale. Matt can maybe hit on the AI component, I think you're hitting on, and as always, come back if we're not clear on your questions. So, as we've talked about for some time, we do have different mix in Experiences business, and a lot of that is driven by the different characteristics from each point of sale. The Viator point of sale, which is, we call it the B2C portion, the TripAdvisor point of sale, which is B2C, and then, as Matt just alluded to, the B2B2C channel, and each one has their own dynamics. I think the TripAdvisor point of sale, the ongoing SEO headwind is material, right? It's material for that channel, and as we call out consistently, it's 3 points of headwind on a GBV just for the overall segment.
That is, again, an important thing to continue to point out. The Viator point of sale, which we are reallocating investments to that and the B2B2C channel, remain our important, most efficient OTA channel. It is where we see most of the conversion gains happening. We see most of the flywheel mechanics benefiting there. As you noted, or as we noted, we are going to be moving more resources to really drive that flywheel faster. A lot of the growth dynamics, which we can get into in a bit, but a lot of the growth dynamics we see really are around some of the macro impacts and what is happening in the broader SEM market, which Matt will get into. B2B2C, this is, as Matt just said, an incredibly important channel for us, very differentiated.
The growth is more about how you load partners in, so the growth algorithm is very different than the B2C flywheels. We are incredibly excited about some of the new partners we have brought on, Airbnb being one of them, and we continue to build our roster of partners. That takes time to build, and over time, we expect to continue to build out that business, and it remains a very important piece of profitability for us as well. I will turn it over to Matt.
Yeah. No, thanks. Just to summarize, there is a bunch of different things happening all at once. There is obviously some macro where some of our corridors are most impacted, including U.S., Europe. There is some mix going on there. There is obviously the category reliance on SEM, which has been our largest marketing channel. We are diversifying, but the marketing mix shift is still relatively nascent, and so the auctions have certainly become more competitive, and we have seen that some of the spend in SEM is less efficient. So we are excited that we are getting some good results in some of our other channels that we are experimenting with, and we expect to continue to lean into that. Obviously, it reflects some of the broader travel environment demand. It reflects some of the changes in the SERP, in particular the SEO impact. We talked about some of the execution.
We think the focus that we are putting into our team is going to actually be quite helpful. When you think about AI, which you have asked about, we actually see AI as a real opportunity. On the AI front, as we said, we are integrating with all the major platforms, and we have been there very early to experiment with agentic across Anthropic, OpenAI, Google Gemini, and Meta Muse. That is something where we have seen, while a small percentage of our traffic, not unlike others, it is probably less than 1% of our overall traffic, it is ramping. Our brands are leading in share of citations for Experiences prompts, so that is very exciting for both brands, TripAdvisor and Viator. The conversion for each is multiples higher than average.
I think in Viator, it is close to five times the average conversion, and for TripAdvisor, I think it is about twice the average conversion. That is very promising, and we will lean into it and experiment there, and we think that is going to be a real opportunity for us in the future.
Thank you, and good luck to you both.
Thank you, Naved.
Thank you. Our next question is from Nafeesa Gupta with BofA Securities. Your line is open.
Hi, good morning. Thanks for taking my question. Firstly, on just a follow-up to what Naved asked, could you talk more about whether Experiences, if the slowdown is a category demand problem or is there an acquisition problem? Are consumers just booking fewer Experiences, or is Viator simply having to spend more to capture them as SEO traffic declines? Then I have a follow-up.
Yeah. Hey, Nafeesa, I'll take that. Yeah, listen, I think the growth profile is reflective of a couple things. Certainly, we've seen some macro unevenness for sure, and I think you've heard that across the travel ecosystem this quarter and last quarter. We see that in quarter mix, where our domestic corridor has been much more resilient, although still down over the year. But domestic is much more resilient versus our important channel, U.S. to Europe corridor, for sure. But we see that in higher cancel rates, particularly around some of these peak events and peak impacts. I would say also, as I mentioned in my prepared remarks, the SEM channel has just been delivering fewer clicks, I would say, over this past quarter. A lot of that could be tied to macro as well.
When we think about the overall business, we just think about that demand that's coming to us and we're able to acquire, particularly in where the category sits. So much of the OTA category comes through the paid channels. Our business certainly reflects that. From an efficiency perspective, I would say we still feel very good about the acquisition machine. It's masked a little bit because we are making investments in some of these scaling other paid channels, which don't necessarily have in-quarter payback, but are just critical for us to really diversify and expand where we get high-quality customers that we hope we can retain for a long time. When we think about our SEM efficiency, we actually have a decent SEM efficiency in our Viator marketing channels, just on the paid SEM side year-over-year.
But again, some of that is masked by some of the timing you see in the investments we're making in the other paid channels. Net-net, it's an uneven environment, demand environment, and we're navigating, but we're not slowing investment because we really want to make sure that we are investing in the category for the long term.
Yeah, I just want to add that there's a number of paths here that look really, really promising. We mentioned investment in the flywheel, which we think will drive the right outcomes. There's also product opportunities that we see ahead with app that will be more direct. We see supply opportunities. We see category expansion opportunities. We obviously see marketing channel diversification opportunities. There's a real opportunity, and that's why we're staying focused on it and putting the resources where they can make an impact.
And I think you had a second question, Nafeesa?
Yeah, yeah. Thanks for answering that. The second is, just following on the impairment and restructuring in Hotels and Other, how should we think about the long-term role of that Hotels and Other segment within TripAdvisor now going ahead with these changes?
Yeah, I'll cover the mechanical piece of the impairment process, and Matt will talk about the long-term role. As I said in my prepared remarks, this is a normal process that we look at our goodwill on the balance sheet. Clearly, the financial trends in the legacy business necessitated a deeper analysis of that, and we concluded with the impairment. I think that's all pretty standard. I think it doesn't speak to the opportunity around that asset, which I'll let Matt cover that.
Yeah, TripAdvisor's assets are unique and relevant for addressing travelers' needs and making the connection to partners and suppliers. They bring trusted human perspectives. I think the importance of our contributor information that we shared around the durability of contributors having been much stronger than overall traffic, the fact that they are driving growth in our key categories, is a really good indicator that we are going to continue to get that fresh perspective. We are going to lean into that. That community and the content and data that it provides, and the brand trust that surrounds it, will allow the team to continue driving value for partners, which includes Viator and Experiences, as well as our OTA partners. It will simplify our existing revenue streams so we can streamline how we do this, and I think that focus will be quite helpful.
That allows us to have the right cost structure for the future, which will be a leaner, more agile team, and that will maximize cash flow in the business. We can also leverage all the work we have done in AI planning and discovery, and I know the teams are very excited about leaning into what that can look like for the future. I think we are leaning into that and excited that we will have a smaller team moving faster, using AI tools, and behaving more like a startup probably.
Got it. Thank you.
Thank you. Our next question is from Lloyd Walmsley with Mizuho. Your line is open.
Thanks. Two questions, if I can. First, have you all filed a lawsuit against Google under the DMA, or is that an opportunity you've looked at? Trivago has done so. There have been some other court stuff going on over there. Wondering if you guys have a view on that. Then a second one, just strategically as you guys have a review underway, what do you all think, to the extent you can comment, what do you think the biggest sort of assets are inside TripAdvisor, whether that's the core hotel or attraction side? What do you think are the most valuable assets in the hands of a strategic acquirer? Not asking you to name anyone, but just if you could sort of give us the pitch of sort of how you all could be valuable in other folks' hands, to the extent you can comment.
Would love to hear that. Thanks.
Great. So I'll answer the first one, and Matt will give views on some of the TripAdvisor assets and value we see in there. Lloyd, appreciate the question. Not much we can say. We're aware of those lawsuits, and we really can't say too much about what we may or may not be contemplating. But yeah, we're certainly aware of what's happening in that environment. Matt can chat on TripAdvisor.
Well, look, we think we have highly differentiated assets that could be valuable both as a standalone go-forward and in combination with others. We've talked about the most differentiated assets across TripAdvisor. I think in an age of AI, that ongoing contribution set, that trusted human perspective, all of the content and data, which, as we said, has not slowed at the same rate as overall traffic, is an extraordinarily valuable asset. We've seen that in the way that we've interacted with many third parties and partners in the many deals and partnerships that we've struck with a lot of different parties that we've talked about over the past number of quarters and shared a bit today. We think that community is valuable. We think the brand and its trust, the way it appears in AEO, is valuable.
We think the Experiences category is extraordinarily valuable. That business has scaled, I think, from, I don't know, it was like a billion GBV when Mike and I got here. It scaled to five over the last 12 months, roughly. It has done that in a way where we have thought about unit economics that we have seen progress. We are continuing to focus on how that flywheel drives unit economics going forward. We think there is a number of valuable assets, and whatever direction comes, the value will be there.
Okay. Well, it has been great working with you guys, and best of luck in the next chapter.
Thanks, Lloyd [crosstalk].
Thank you. Our next question is from Ross Sandler with Barclays. Your line is open.
Hey, guys. I echo the sentiments on congratulations. I was just hoping maybe we could ring-fence the downside issue here a little bit. We know you have lots of different inbound traffic channels. If we just took SEO and we looked at that today versus maybe a year ago, the notion of like, how close are we to Google Zero, could you guys just give us a ballpark for the core TripAdvisor brand? I don't think Viator has an issue with SEO. Correct me if I'm wrong. But where are we on the continuum of Zero Google for core TripAdvisor? Thanks a lot.
Hey, Ross. It's Mike. Appreciate the comments. You're right. I think when we talk about our SEO exposure, it's primarily coming through the TripAdvisor, which obviously the TripAdvisor point of sale, we see that in Experiences as well through the TripAdvisor point of sale. Viator has very little SEO exposure. It really is coming through the legacy brand. I think SEO continues to be in the kind of the mid to high teens of exposure, right? That's down pretty meaningfully year-over-year. When we think about headwinds, mechanical headwinds that the SEO will bring, we certainly think that it will still provide headwind in 2027. In 2028, we'd expect to start to see that to abate according to, just based on the trends in the SEO channel today.
That percent has come down drastically over the past three years, five years for sure. It just, as you said, we need to just work through that, and it will provide a tailwind to growth when we just mechanically get out of that headwind.
Super helpful. Thank you.
Thanks, Ross.
Thank you. Our next question is from Doug Anmuth with JPMorgan. Your line is open.
Hi, this is Teddy on for Doug. Thanks for taking the questions. Just have one on take rate over your Experiences business. Could you talk about the sustainability of the take rate of that business? You mentioned testing discounting over the past quarter. Just curious to hear what you learned from that test. Thank you.
Yeah. The take rates have been very consistent over time. I think, again, the take rate is an important measurement around the value we provide to our operators. As you know, our operators are numerous on the platform. They tend to be very small businesses, and we help them tremendously with their business. That is not just demand, bringing someone in Iowa the ability to have a great experience in Milan, so their exposure they are getting, the ability to drive demand to them. What we do, we step in, we handle friction for these operators, cancels, customer service, currency translation, all these things that happen that are very, very hard to do as a very small business operator. So I think we provide an essential marketplace role that is enhanced in the Experiences category because of the nature of our operator partners.
I think that take rate, which we have said is in the mid-20s, reflects that value proposition. The take rates have generally fluctuated up over time, and that's been more of a function of our operators choosing different programs to advertise on our platform, being the willingness to participate in sponsored ads and things like that, of which there's a higher take rate associated with that. The take rates are less about us increasing take rates. It's really around how our operators interact in our ecosystem for that. I think that's a valuable component, and we see incredible stability in that take rate, and we expect that to be the case over time. On the discounting front, price is very important in travel. That's a very basic statement, but it is.
We are always experimenting with the value we provide on a price, and does that drive, one, booking behavior, and two, long-term loyalty? If we are able to drive conversion and drive loyalty and frequency with discounts, that is very high ROI, and that's where we're experimenting into the channels, the customer base, how we find the customer base that responds most to that discounting. Of course, that's enhanced by a lot what we're doing in AI and technology of how you present those offerings in the right time at the right place are critical to, I think, long-term views of loyalty and retention in the business.
All right. Thank you.
Thanks, Teddy.
Thank you. I am showing no further questions at this time, so I would now like to turn it back to Matt Goldberg for closing remarks.
Thanks for joining us this morning. My focus over the coming months will be to deliver on our priorities, support our teams, and ensure that our next CEO inherits a business with operating momentum, motivated talent, and a strong balance sheet. I want to thank Mike for his leadership, partnership, and significant contributions to the company. I also want to thank our board, and maybe most importantly, our remarkable employees for everything they do every day. I am confident the best chapters for TripAdvisor lie ahead. Thanks, everyone.
This does conclude the conference. You may now disconnect.