Good day, everyone. And welcome to the Expedia Group Q3 2021 financial result teleconference. My name is Johnny and I'll be the operator for today's call. [ Operators Instruction] For opening remarks, I will turn the call over to SVP and CFO Retail, Patrick Thompson. Please go ahead.

Good afternoon, and welcome to Expedia Group's financial results conference call for the third quarter ended September 30th, 2021. I'm pleased to be joined on the call today by our CEO, Peter Kern and our CFO, Eric Hart. Following discussion including responses to your questions, reflect management's views as of today, November 4th, 2021 only. We do not undertake any obligation to update or revise this information. As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we plan, we expect, we believe, we anticipate, we are optimistic, we're confident that or similar statements. Please refer to today's earnings release and the Company's filings with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements. You will find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in our earnings release, which is posted on the Company's Investor Relations website at ir. expediagroup.com. And I encourage you to periodically visit our IR website for other important content. Unless otherwise stated, all references to cost of revenue, selling and marketing expense, general and administrative expense, and technology and content expense exclude stock-based compensation. And all comparisons on this call will be against our results for the comparable period of 2019. And with that, let me turn the call over to Peter.

Thanks, Pat. Thank you all for joining us today. Eric and I will make some brief comments and then of course, take questions. Let me begin by saying we're very pleased with the quarter we had in Q3, nearly matching our adjusted Net Income and EBITDA from 2019. But I would add that if not for Delta, this would have been our most profitable quarter ever, and I think it's a tremendous milestone for the Company to be here while we are still in the throes of COVID and still coming out. And a testament, really, to the work we've done to simplify the Company, to focus on technology, and to run the business more efficiently. And with that performance and what we're seeing in the market, we have the confidence to further pay down our preferred stock, which we did a few weeks ago as you would have noted. On which of course is not a big milestone for us putting COVID behind us. As far as the trends for the quarter go, I'll do high-level and Eric will give a little more detail. We went into the quarter following a strong Q2 and good momentum. But as we remarked last quarter, Delta had begun to have impact. We saw it impact cancellations, we saw it impact booking trends. But as we got through August and into September, the Delta fears particularly in the U.S., began to wane and we ended stronger in the back half of September and that has continued through into the fourth quarter with even greater strength. We've seen improvement across all segments, really. Well, we heard domestic have led even though segments which have been harder hit by corporate and international travel have been coming back. Cities have been returning as well. And so…

Thank you, Peter. I'm also pleased, as Peter mentioned, with the overall recovery of our business. As you will see, it includes 2 quarters in a row positive adjusted EBITDA. And in the -- in Q3 excluding [Indiscernible] was roughly on par with the third -- third quarter of 2019. And with that, I wanted to start by providing an update on the booking trends that we're -- we have seen and we are seeing. Following a pullback, we witnessed for much of the third quarter and into the first part of September, due to the Delta variant, we saw a notable broad-based improvement across geos and product lines. Overall, total bookings for all products net of cancels were down 30% versus third quarter of 2019, which was slightly worse than the 26% decline we saw last quarter. Given the continued volatility recovery, we also provide additional monthly detail on our total lodging bookings, not of cancels. That, of course, includes books Hotel in Vrbo. And those were down approximately 17% in July, approximately 25% in August. 19% in September, and further improved to down -2% in October. And again, that's September was also down, of course. The trends in October that we saw in that with -2%, they did improve throughout that month. So, we exited at a much-improved rate relative to the start of that. Moving to the P&L, starting with revenue, it was down approximately 17% versus third quarter of 2019, which was a meaningful improvement from last quarter with revenue down approximately 33%. We saw a significant improvement in both Vrbo and hotel revenue, which benefited from seasonally strong summer travel. Revenue margin for the third quarter was approximately 15% up from approximately 10% last quarter. This was primarily due to typical third quarter seasonality in…

Of course. [Operator Instructions] Our first question comes from Naved Khan of Truist Securities. Naved, your line is now open.

Yeah, hi. Thanks a lot. A couple of questions. Maybe -- Peter, maybe you can give us some color on your thoughts around marketing spend. Do you continue to see scope for what efficiencies here going forward, where do we stand today on the -- and then the second question I had is just around the organization structure going forward? I think you guys had outlined cost savings from the reorg, $750 million in fixed cost and $200 million in variable. As we think about the organization bailout from here on, where do we stand with respect to the aids.

Sure. I'll go first and Eric can take on the cost issues. I would say we're still working towards a better marketing world for the Company overall, which yes, means more efficiently being able to get customers. But it's a many pronged attacks. It's the performance marketing issues that I've talked about before. We have come a huge way in terms of the tools, the data and the algorithms, etc. But COVID has been a bumpy time and we have not found normalized time to really get everything tuned exactly how we want. So yes, we believe there's opportunity ahead to that. We also believe there's significant opportunity for our brand teams to really be much more impactful than they have historically. And that has impact not only on driving direct customers, but it has impact on how people respond to performance marketing, and other things. So, there's many places where those teams can have more impact and ultimately be more efficient in attracting customers. But it's not entirely on that, right? We've got to build better products. We've got to have better engagement circles with the customer. We've got to improve our service every -- we need to improve in every part of our game to continue to make the customer stickier and bring them back and want them make this their phrase to come for travel. So, marketing can be more efficient, but it's really a virtuous cycle and how we've streamed marketing together with the experience. And with the new efficiency, the second question goes to all of that gives us more opportunity to reinvest in more profitable long-term customers. They create a long-term value for the enterprise.

Great. Thanks. I'll take the second part of your question regarding the call. So just to remind everyone that the program is both fixed and variable costs. On the fixed side, we -- the most recent update that we provided was $700 million to $750 million, and we expect it to land in the higher end of that range. And on the variable side we set to achieve greater than $200 million, but remember that at -- call it normalized level of 2019 levels because we need the volume to come back to get to see that fall into the end of the P&L. I would say both of those are substantially completed. There's been a ton of work by the team to simplify the business. And I think we're feeling really good about the fixed and variable side. But I'll also add, we are a technology Company, we're going to continue to invest and improve our services for our customers, and in the way that we operate this business. So, while this program I think has been a tremendous accomplishment of ours in simplifying our business, we don't expect to stop there and we'll keep going, but I think from a program perspective, I think we can put the billion dollars to go to rest.

Thank you, Peter. Thank you, Eric.

Thank you.

Thank you. Our next question comes from Kevin Kopelman of Cowen and Company. Kevin, your line is now open.

Great. Thanks so much. Could you dig in a little bit into this -- the significant improvement that you saw in booking trends in October? If you could talk about key segments, geography at all, maybe Vrbo versus hotel? Thanks a lot.

Thanks, Kevin. I would just say generally, I know it feels planned, but we've seen it everywhere. Cities are picking up, international has picked up, there are -- virtually, every area has seen growth. I will say that some of the benefit we have seen and I've talked about mix effects before, when cities were forbidden places, that obviously hurt us. Cities have been a great market for us. And as we've seen cities come back, there's greatly -- they're still greatly lagging major leisure destinations like beaches. But they're coming back, and that return benefits us probably disproportionately compared to some others. So that mix effect thing, we have some winners and some losers as always, but we've seen cities come back more. We've seen -- relative to the growth, we've seen in the consistently strong leisure areas. And the opening of international channels, the announcements from U.S., from Singapore, etc., about allowing international travel, we see that whip up basically, as soon as it's announced. We see search queries go up. And again, in places like EMEA, where we're traditionally stronger in international travel as compared to domestic, those openings, I think all go well for us going forward. So, it really is a broad-base recovery. It is every -- not down to every country because there are lifting countries that have COVID spiked, etc. but down to every region. And some regions are trailing dramatically, like APAC and Latin America, but they're improving too. And so, it's really broad-based and it's just what the base you're building off of, and some are different than others.

And then only to add to that, that is as we've talked about over multiple quarters now, there will be volatility in the recovery of the series of many stories and a lot of the intersection points that Peter just mentioned, so we'll continue to monitor, manage our marketing spend appropriately, as we did in Q3. We have the brakes on some areas of that just because of -- we saw a bit of a slowdown, but so far so good in October and going forward.

Very helpful. Thank you.

You bet.

Perfect. Our next question comes from Deepak Mathivanan from Wolfe Research. Deepak, your line is now open.

Thanks. This is Zach on for Deepak. Just 2 questions. First, you're kind of large main competitor in the space before the last name. Your room rates are still lagging. I think it's down 33% in the third quarter versus 2019. That's lagging kind of bookings performance. I just -- is there any kind of driving force or explanation, driving that Delta and performance? Is it mix -- certain market lagging? Is there a timing to land or there's a difference in reporting structures? Any kind of color there would be helpful. And then just on COVID restriction, I know it's very dynamic and hard to predict, but are you seeing any differences in terms of travel restrictions in implications on demand when we see COVID cases rising in certain markets now versus 6 or 12 months ago? Thanks.

Yes, thanks, Zach, lot of good questions in there. I would say, first off, yes, you have to remember that they report on book, we report on stage, so it's sometimes challenging to compare. But I would say, as I've said before, and I mentioned regarding cities, the mix has helped them. They've always been better in smaller markets, long-tail markets, etc. We've always been really strong in big cities. When cities were dragging, cities get built by international travelers and we also have been strong in long-haul air for those travelers, like all those mix effect actually impact things. And so, some -- some of them we want in, Vrbo has been a beneficiary, some of them we locked in big cities and international travels. So, it's always been a balance. We are less focused on room nights rather than room dollars, if you will. It's a little misleading. We could book a million more one-star hotels -- nights and it wouldn't mean much to our P&L, and we could book 100,000 5-star hotels, it wouldn't mean a lot. You have to take it all in balance, but we are feeling good about the recovery. And in general, our numbers, domestically, are running ahead, in lodging, of where we were 2 years ago. So, I think we're in good shape there and we feel good about that. And again, we have had a somewhat conservative bend along the game with COVID. We've been, Eric mentioned, tapping the brakes. We tried to respond. Sometimes we get over our skis, sometimes we're behind the recoveries. It's a balancing act, but we are getting more confident, more aggressive. And I think you'll see us continue to lean in to gain share across the globe. In terms of the COVID question, it remains to be seen at every, as Eric said, every story as its own. But I will tell you if you look at recent news, for example, of the COVID cases in the UK, spiking from recent openings and I was in London and it was amazingly open. I would say that queries have remained elevated since the international announcements to the U.S., and they remain elevated and we have not seen a pullback from the caseload news, so I think that remains strong. And of course, science is helping us out along the way. We just announced that kids will be able to be vaccinated in the U.S., which is a great benefit for society, let alone our business. And likewise, the announcement today about the UK approving the Merck pill for treatment. This is I think we all agree is probably going to be an endemic not a pandemic. And the more treatments we got, the more ways we got to deal with it, the better off we're all going to be.

Very helpful. Thank you.

You bet. Thanks.

Thank you. Our next question comes from Eric Sheridan of Goldman Sachs. Eric, your line is now open.

Thanks so much for taking the question, maybe following up first on the growth initiatives when you're looking out against the recovery. Are there any things we should be keeping in mind in terms of the ability to continue to grow, supply, or align some of your supply priorities, especially outside of North America, to capture as much of that growth as you can? And 2nd question, guys, coming back to capital return and how you're thinking about a more normalized environment, Booking called out the ability to possibly return capital to shareholders as we get into early 2022. Any updates there on how you're thinking about return of capital on the Balance Sheet over the medium to long term? Thanks so much.

Sure, Eric. I'll take the first one and Eric can comment on the second one. But I would say that we continue to look tactically around the globe at what the right vectors are to focus on in terms of supply. I don't think we feel like we're terribly deficient, but we've been a little bit peanut buttered around the globe. As we did with Vrbo during COVID, we're very focused on those compression markets, freeing up a supply there, making that supply really successful right out of the gate. And that is the virtuous cycle that we think is most valuable. So, we will continue to see us do that for Vrbo, but you will also see us do that in a very targeted way around the globe. And that's where the focus that's tied into where we are marketing, where we are driving our brands, where we think we have the opportunity to win. And again, remember, in many markets around the globe, our B2B business or Expedia Partner Solutions business, drives those markets more than our direct relationship with consumers. and so, driving the right supply to feed those businesses as well is a critical piece. We will continue to drive into it. I would say, if anything, we've been relatively modest in terms of supply growth during COVID, with a particular focus, again on Vrbo, which was different use case. But as thing as a reopening, we're seeing more demand. You will see us go after in a targeted way, more supply and again in a very targeted end-to-end way, keying on the markets we're focusing on growing and where those markets want to travel to. So, we feel very good about that opportunity. It's just a question of focus. It wasn't a big focus during COVID, but as things improve, we will continue to roll that out.

Yeah. And thanks for the question, Eric, I'll take the second component of that and I would say just from a macro level that our philosophy is and strategy is consistent. First and foremost, want to remain -- we are going to remain investment grade rated, will commit to that, of course, going forward. Second is our commitment to continuing to lower our leverage ratios and get our cost of capital down. We've taken some great steps on that this year and will continue to make progress as we move forward on it. And the third, we have the Company traditionally been committed for returning capital to shareholders in different forms. I would say right now is again, not necessarily the right time for us to do it, but it's certainly something that we're committed to doing over the long haul, and we'll just continue to observe and make what we deem to be, if you will, the right choice at the right time to move forward.

Thanks, guys.

Thank you.

Thank you. Our next question comes from Mark Mahaney of Evercore. Mark, your line is now.

Thanks just 2 quick questions. You referred to those growth rates for the 4 months, July, August, September, October was I'm sorry, was that room nights or was that bookings? And then secondly, I know you said that generally all the regions are recovering just to be specific about it and I know that there are flareups and countries markets here or there. But in the major European markets like Germany, you didn't see a -- you have not seen a -- whatever, a dampening of demand at the end of the -- at the end of October recently. Thanks.

Yes. I'll take the second part first, Mark. There are some blips here and there. For better or worse, I wish our business we're bigger in domestic EMEA, but we don't feel those flips in quite the same way and we had the countervailing issue of more interest in international. So that has probably offset some of what others may have seen. But yes, there are blips here and there. As I mentioned, even in countries that are more COVID challenge, in general, we have seen sustained interest probably buoyed by the international factor as opposed to, perhaps, what was going on in the summer.

And then Mark, on the first question, it is lodging gross bookings, no cancels.

Okay. Thank you, both, very much.

Thank you.

You bet. Thanks.

Our next question comes from Mario Lu of Barclays. Mario our line is now open.

Great, thanks for taking the question. So just wanted to ask you about your comment on continuing to gain share. And I'll turn it accommodations and your key markets. Can you expand on the initiatives that you guys have made on your end to allow you got the gain share and whether you think that is sustainable?

Yeah, thanks, Mario. Look, I think it's a combination of good work we've done and popular use cases. We know that the whole home solution has been a very popular solution during COVID, and that has helped us as compared to say apartments in cities where we might be less strong. But on the, what are we doing side, we felt a tremendous amount to

work on the brand, to land the brand, to make people really think about Vrbo as a primary source of vacation options. We've invested more than ever, much more than ever in that brand. And we've really driven that hard. And as I mentioned, more than half our users so far this year, our customers have been new customers to the experience and we think the experience is great. So, we do think we have sustainably landed the experience on the use case and the brand, and that will continue to benefit us for many years to come. How share exactly shakes out when the market moves back, or people who go into cities to things will change. We're not -- we're not strong everywhere

In terms of Vrbo supply, we are more focused on leisure destinations. But we think we have sustainably put Vrbo in the minds of many people and other brands in other parts of the world that are strong, like stays in Australia, etc. And that is really a powerful long-term benefit for us.

Great. And just a quick follow-up. In terms of the new users onto the platform, has those user behaviors matched those of prior users, or how they've been stronger during this time? How should we think about the new cohort? Thanks.

Yeah, I think it's early to say. I like to tell you that people use Vrbo every 2 weeks, but they tend to need vacation time, and they tend to need school vacations and other things. We'll know more as things unfold, but again, as I said, bookings for next year are already running well ahead of this time last year when there was a lot of pent-up demand for Vrbo s already. So, I think we are seeing the multiplication effect of adding new successful customers to the experience and piling those things up and people figuring out that they better book next summer, they better book next Christmas, they better book spring break. And that's really a powerful wheel -- cycle that works for us. So, we're really excited that we've added so many happy customers to the experience, and we believe there will be a tremendous long-term value from them.

Great.

Thanks.

Thank you, Mario. Our next question comes from Doug Anmuth of JPMorgan. Doug, your line is now open.

Hey, this is Daniel for Doug thanks for taking the questions. First, Peter, you talked about improving these experienced a few times in your prepared remarks so, I assume combining the loyalty program [Indiscernible] those, but curious to hear where you see the biggest opportunities looking ahead. And secondly, could you guys talk a little bit about how you're booked to [Indiscernible] looks like today and how that compares to what you saw earlier in the year and historically?

Sure. I'll take number 1 again and let Eric take number 2. I would say, frankly, we see enormous opportunities across a wide swath of work to improve the customer experience. Some of that is yes, things like loyalty, things that we can do to enhance what it means to be part of our platform. But it's also in the product, it's also in payments, it's in our CRM relationship with customers, how we give them information, how we reveal and give them discovery and find the right products and the right value at the right time. All of those things are real opportunities and ripe for innovation. We invented this industry 25 years ago. And I wish we had done more along the way to innovate for the customers. We've done a lot, but there's tremendous opportunity ahead for us in virtually everything we do from service, to on the product to how they discovering book multiple products in a trip to how they get informed about cancellations or delays or other things in the trip and how the app becomes their companion in terms of the experience. We are working across all those fronts and determined to keep bringing innovation to the customer every week, month, quarter for the next many years in a way out of velocity, we haven't done in a long time.

And then on that, your second question, just on booking my noted, we continue to see it revert back in trend towards more what we would have seen or expected in 2019 though it's still a bit skewed. For example, on the hotel side, it continues to be a little bit on the shorter-term side than Vrbo, a bit on the longer-term side of the macro level, so still a little bit impacted by COVID and booking patterns, but generally trending back to normal levels.

Great. Thank you.

Thank you.

Thank you [Indiscernible] Our next question comes from Jed Kelly of Oppenheimer and Co.. Jed, your line is now open.

Hey. Great. Thanks for taking my question. Just what you mentioned on the loyalty program across all the brands, can you sort of talk about how your tech stack is going to be able to do that, sort of merchandise say flights with Vrbo and then developing more of like a vertically integrated tech stack around your loyalty program?

I wouldn't describe it quite that way, Jed. but what -- the way I would think about it is we're building every domain where we -- that we own. Think loyalty, checkout, etc. to be multi-tenant and to work across our brands and our partners, because we have many, many B2B partners. And in doing so, we enable our brands or multiple of brands to live on one stack, to live in one currency, if they wish to allow you to burn that -- earn that currency and burn that currency wherever you want. And this is one of the powerful things that we talked about new Vrbo customers coming on the platform. But imagine when they're not only in the Vrbo product stream and enjoying that, but then there are earning value that they can use across air and other things when they have different travel needs. And likewise, the inverse, the Expedia and Hotels.com travelers who might want to rent a Vrbo for a vacation. So that expansion of being able to spend across all those brands, is that architecture for our technology, which is really building everything we do into multi-tenant, ultimately having all our -- 1 app all on 1 stack, and 1 way. That doesn't mean we want to separate brands, but they'll run on the same technical infrastructure. They'll have their own differentiation for brand, etc., or product, but it's all going to be built for multi-tenant. It's all going to be built for us and for our partners. And we have the richest dataset, really -- travel dataset in the world. And that dataset powers all our machine learning, all our AI, and our ability to innovate constantly in terms of what the customer sees, how the partners participate. And that's just super powerful once we get it right. Now, there's a lot of work still to do, but we can see the path now and we're all aligned on that path.

And then, any update on where you are in terms of having more Vrbo supply on-brand Expedia?

Yeah. I mean, it's tied up in the same question, Jed, which is, we have Vrbo supply on Brand Expedia, but the experience isn't terrific. It's a little disjointed for the customer. We can't do everything. This is the -- one of the many things that are the power of bringing these tech stacks together that allow us to seamlessly move content around onto different stacks, make the checkout process seamless, make the servicing seamless, make it all feel like it's coming from the right place. It's not just 1 piece. It's not just about getting the content up. It's got to work all the way through the customer experience, because we're in the business of getting and retaining customers, not just getting transactions. That is a process we need to solve end-to-end, and it is more than just what you've historically heard about on, hey, can we get to contact on Brand Expedia now we need to do it. It's a big opportunity frankly, it's one of a dozen of equal opportunity. But all of it is enabled by getting the tech right.

Thank you.

Thank you, Jed. Our next question comes from Andrew Boone of JMP Securities. Andrew, your line is now open.

Hi, guys. Thanks for taking the question. So, with travel coming back and booking calling out, leaning into marketing channels yesterday, can you talk about any changes you're seeing to the competitive dynamics within performance marketing? And then question number 2, is with it sounds like nice progress being made on the technology rebuild, kind of kind of re-stacking. Can you help us just more tangibly understand what this [Indiscernible]? Do you have any examples, even call out? Thanks so much.

You're on my favorite topic there, Andrew, on the second 1, which is there are myriad opportunities. We have massive opportunities on the CRM front. We're not at first adequately and the app is not a seamless product across all our brands, that's a huge opportunity. The ability to sell multi-products, which we've been a leader in the industry for years, but honestly could be so much better at, in terms of how our checkout pass work and how we get there. So, there's -- and everything I just said is measured in the billions or 10s of billions of GBB opportunity, in my opinion. So, I think they are really all over the place and many of them unlock and enable really big opportunities on the B2B front and our ability to power partners, power suppliers, etc. So, it's really -- I can give a dissertation for the next 2 hours on it, if you want to miss the Vrb call but in the meantime, suffice it to say that there are dozens of them around the Company and they are big rocks and big opportunities. As far as [Indiscernible] coming back and our friends leaning into marketing, we've kept it pretty consistent model. We've leaned into brand marketing and frankly we've been leaned into brand marketing even when maybe our brand marketing could be better and sharper and that's why we rebuilt that team. We're bringing the creative teams in house now and really going at it in a different way. But we expect to be balanced. We've seen our competitors move around and gyrate a bit. We've kind of kept to a balance between brand and performance. We feel like there's opportunity to be more aggressive as our performance marketing machine gets sharper and better and all the tools right. We're seeing vectors of opportunity that we can lean into. So, we definitely will have opportunities to lean in. And I'm really excited about what our brand teams are going to do. Our brand teams are second to none in the industry. We will be the best in the industry and our performance marketing is phenomenal and finally brought together in a way that will be really powerful. So, I think what that balances. As I mentioned, the market's got a normalized, we don't exactly know yet. But it is a virtuous cycle and a better brand marketing of the better performance marketing will do. And we believe strongly in both, and we'll continue to lean in a balanced way. I think our friends have gyrated a little more than us in and out of some of those things.

Thank you.

Thank you, Andrew. And our penultimate question comes from Brian Fitzgerald of Wells Fargo. Brian, your line is now open.

Thanks, guys. Very thorough call. We want to ask a little more color on the mechanics of the GBT Egencia deal. We think Egencia traditionally has gone to market with low air fees and make up for that by making margin on hotels, leveraging the supply footprint. I just want to check on the mechanics and see if the margin there would be comparable to Partner Solutions as a whole or any other color there? Thanks.

Hi, Brian. It's Eric. I'll take this. And thanks for the question. And I don't mean to be flipping in my response, but ultimately, I think you've got to ask GBT and Egencia going forward what their ultimate strategy is around, how they plan to monetize and develop customer solutions. I can't say that they can -- they plan to run against it to be a core part of their offering and in fact expanded into some of their existing customer base. So, we see a great opportunity with that relationship that we have, but we see a great opportunity in the equity component that we had and we also see on the ETF side, not only for the existing [Indiscernible] volume, but also potentially upside with some of their other volume as well.

And I would just add Brian, that our goal longer-term is to continue to export more of our technology to power more of our partners, and we think that is our true advantage. And so, as a partner, we hope that we find more ways to help Amex GBT monetize their customers better long-term and serve their customers better. So, we'll be working on.

Very clear. Thanks, guys.

You bet. Thank you.

Perfect. Our final question comes from Dan Wasiolek of Morningstar. Dan, please proceed.

Hey, guys, thanks for taking the questions. Just 2. So, on the verbal bookings strength you talked about for summer '22, wondering if you have any comments looking at rate in occupancy, the split between that. And then the second 1, just direct mix maybe how that's been trending and how you see that direct mix evolving with the investments you're making in tech structure Vrbo and loyalty. Thank you.

Yes. I'll take those in reverse then, I think, which is Vrbo has consistently had a very strong direct business. I mentioned our continued investment in brand across the globe really on Vrbo or its sister brands. The -- We mentioned, I think 2 or 3 quarters ago, that we got out of performance marketing for Vrbo in the U.S. and it benefited from that with more direct traffic and having felt the effects of it. So, I think we feel very good about the direct nature of that business. As far as how the product will continue to improve, how royalty will add to it, again, that's just other veins of opportunity for us across our Expedia customer base, our hotels customer base, etc. So, we want to create that universe of people that want to move between our brands and use them and build value and use that value. So, I think we will continue to see that. As far as rate and occupancy goes, your rates have been ADR has been very strong throughout COVID. There's been a lot of competition for the product and owners and managers know that and they have first price where they could. And so, we've seen a lot of price increases and those have held, there seems to be no abating of those. And likewise, occupancy in those compressed markets. If you want to be on a beach in the Southeast or on a beach in Hawaii at Christmas, good luck. It's -- can't be done. So, we're going to keep seeing that. I think that's why you're seeing this effect of, okay. I want to get out in front next summer and get the house I want. And that's a great -- that's smart for the consumer and it's great for the business and it gives us a lot of confidence going into next year that this use case will continue to be highly top of mind for many consumers, and we are well-positioned, so. With that, I will thank you. Thanks, Dan. Thanks everybody. I hope you all stay safe. We'll come forward to us in trail will recover and feel free to start their corporate travel now it's safe out there. Thanks for your time.

Thanks, everyone.

Ladies and gentlemen, this concludes today's call. You may now disconnect your lines. Have a nice day.