Good morning, and welcome to TripAdvisor's Fourth Quarter 2018 Earnings Conference Call. As a reminder, today's conference is being recorded. At this time, I would like to turn the conference call over to TripAdvisor's Vice President of Investor Relations, Mr. Will Lyons. Please go ahead.

Thanks, Victor. Good morning, everyone, and welcome to our call. Joining me today are Steve Kaufer, our CEO; and Ernst Teunissen, our CFO. Last night, after market close, we distributed and filed our fourth quarter and full-year 2018 earnings release and we made available our prepared remarks on our investor relations website located at ir.tripadvisor.com. In the release you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call. You'll also find supplemental financial information which includes certain non-GAAP financial measures discussed on this call as well as other performance metrics. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's views as of today February 13, 2019. 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. Now, here's Steve who will share a few thoughts before we open the call up to questions.

Thank you, Will, and good morning, everyone. To summarize our prepared remarks from last night, our solid fourth quarter captured a strong 2018. Looking ahead, we expect double-digit EBITDA growth in 2019 while we invest behind a number of attractive growth opportunities that we believe will further enhance our shareholder value. The business continues along a great path and we're excited about what's ahead. We'll now open up the call for questions.

[Operator Instructions] And our first question comes from the line of Deepak Mathivanan from Barclays. You may begin.

Hi guys, thanks for taking the questions. So first CPC revenues grew for the first time in several quarters, and you noted in the letter that you have a lot of work to do still to achieve sustainable growth in this business. I understand the strategic decisions by OTA partners is out of your control. But what are some of the things that you're doing from product and operational standpoint that would help this business in 2019? And then the second question, you have the new user experience with the feed content for a few months now. Can you share what you're seeing in terms of typical engagement under this? Is it, in some way, impacting either positively or negatively the KPIs at this time? Thank you so much.

Sure Deepak. This is Steve. Thanks for the questions. So when we look at 2019 CPC revenue, we obviously – as we've shared, we have some pullback on our traffic acquisition, our paid marketing, which hits that, but that eases in the second half. So we'd expect to see some more growth there. When we're looking at the things that we're doing proactively, you can bucket it into a couple of different categories. The first is clearly the optimization that we know how to do so well. Year-in, year-out, we're able to turn our hotel shoppers into a more highly qualified hotel booker downstream to our clients. When we look more specifically, we're always focused on pricing, inventory, usability, leveraging the trust that people have in our brand to help them down that decision path. I can then reference the new TripAdvisor is providing some additional, what we call, decision support because when a brand or an influencer or your friend is suggesting, "Hey, you might want to stay in this particular hotel", that's another way that we can get that individual, that traveler to make that final decision and book the hotel essentially on someone's recommendation. All of those steps help to provide the user or traveler with more confidence that they're booking the hotel that's right for them. And therefore, when we send them downstream to our clients, the booking rates increase. So we've been sending more referrals, more of these clicks downstream, and the CPCs would indicate that we're sending quite high quality traffic. Then when you look at kind of the rest of the hotel auction, I'd be remiss if I didn't mention our sponsor placement products simply because that's helping to monetize our more up-funnel traffic, folks that really aren't ready to book yet right…

Great, thanks Steve.

Thank you.

And our next question comes from the line of Lloyd Walmsley from Deutsche Bank. You may being.

Thank you. Two if I can, I guess first just following up on Deepak's question. Can you give us a sense for looking at kind of hotel shopper growth in 4Q and the outlook for the first half? Are you seeing any changes in the auction or flagging? Are you seeing any impact on SEO, maybe similar to what Expedia mentioned on HomeAway? Or is the outlook primarily a function of just slowing marketing spend or deprecating SmarterTravel? And then the second one, on the Non-Hotel business growth, looked really strong in 4Q across revenue. And bookings, it sounds like you're planning to make some big investments there. Do you think this can drive acceleration in revenue in kind of attractions and restaurants from 2018 levels? You've also mentioned the potential to re-segment, some of that to give us more visibility into this businesses within Non-Hotel.

Yes, Lloyd hi, good morning. This is Ernst. To start with your first question, which is hotel-oriented. I'll take that first. So the Q1 the half one versus half two comments that we made are really strong function of lapping the marketing pullbacks that we started last year and so we're most intense in half two. So if we look at half one, we still haven't fully lapped that and it's going to have a continued negative impact on hotel shoppers but a very positive impact on profitability. In the second half, that is easing and that is going to have an easing impact on our ability to grow hotel shoppers. So that is really the most important impact. I would additionally, call out moving from Q4 to Q1 that Q1 is a tougher comp than last Q4 was. If you look at the year before, the quarters, and we'll have some additional currency headwind in half one and in Q1 as well that we didn't see in Q3 and Q4. But just want to highlight that the marketing pullback is the most important factor in all of this. The question about Non-Hotel and investment there, yes, we've been very pleased with the progress we've made in Non-Hotel, particularly in our experiences and restaurants sector, and experiences has been a continued building of our platform and capitalizing on our leadership position there. We're investing deeper into that in 2019 because we feel we have a fantastic market opportunity there, ability to drive some real shareholder value by investing, rather than cranking up profitability for that business. And so we're very excited about that and believe it will position us really well. It will then allow us to excel revenue in 2019. Some of these things that we put in place will have a benefit in 2019. Some of them will be a little bit more longer term in orientation. It's building the sales force. It's building the office supply. It's building our capabilities, particularly for non-U.S. travelers. We're very optimistic about what we can achieve in that sector over the long-term. And restaurants is another area that has been impressively growing for us in 2018. We expect that to continue into 2019 as well, and that is both on the reservation side for LaFourchette as well as on this new business we built around advertising for restaurants on TripAdvisor. So we feel good about that. And our – the resegmenting that we are considering is going to provide you some more visibility. So for 2019, I would say experiences, restaurants don't necessarily factor in an acceleration just yet. Continuing growth rates is what we are looking at. But for the longer term, it will definitely have a strong impact.

Okay. And I guess, just a follow-up. Anything you would call out on the hotel side on the auction or in SEO that we should be just mindful of?

Yes. In terms of the auction, so the Q4 and also the start of the year 2019, we've seen the continued stability in how our partners approach the auction and our behavior of our partners on the auction, so a continued stability there. And I called out the Q4 to Q1 impacts, and that's the most important things that we are seeing right now. We're obviously keeping our eye going forward on the various GOs in the world impacting of Europe, and it's – we're keeping an eye on what may or may not happen there, but as I said, stability in our auctions so far.

All right, thank you.

And our next question comes from the line of Justin Patterson from Raymond James. You may begin.

Great, thank you very much. You talked about leaning into performance channels for experiences. Obviously, you just made a lot of optimizations from the hotel side in 2018. Could you talk about the differences and how you approach hotel versus experiences, traffic acquisition and just philosophically, any difference in ROI there?

Sure. Good question, Justin. This is Steve. I think one of the key differences as we view it is in the experiences category, we are acquiring traffic who then buy on our site and become members. And they can start to build that habit of buying whatever tour activity they're going on before the trip and then perhaps an opportunity to buy another one or two things while they are on the trip. And so we view the lifetime value as potentially much more meaningful for us and therefore leaning into paid acquisition. Leading into acquisition of any type makes more sense. You can see the converse on the hotel meta side where we do – we have certainly in the past, leaned in on performance marketing, but it hasn't yielded the membership, the ability to refer. When you also look at the opportunity for experiences, we view ourselves as clearly in the lead in most parts of the world and it's a great opportunity to build that habit. And right now, with the nascent business, as we've mentioned many times, the growth opportunity and the ability to build the habit with that first purchase from so many people we think is great. It builds the brand. It's a wonderful product today, and again, we continue to double down on supply and reach going forward.

Thank you, Steve.

Thanks.

Thank you. And our next question comes from the line of Mark Mahaney from RBC Capital. You may begin.

Hey, thanks. I just want to ask two numbers questions. So in terms of the outlook in 2019 for Non-Hotel segment, it sounds like the experiences and restaurants categories, that combined could see acceleration but it sounds like consistency of growth versus 2018 is probably the most realistic expectations. If you put that together with the rentals likely seeing greater headwinds in 2019, does that mean that Non-Hotels revenue growth is likely to be less robust in 2019 than in 2018? Just qualitatively talk about that. And then secondly, I just draw you out on this double-digit EBITDA growth that actually could encompass a very broad range. I assume when you say that you mean kind of low mid-teens but can you do more than just talk about double-digit EBITDA growth, quantify that a little bit? Thank you.

Hey, Mark. Thank you. In terms of that, indeed, we're saying we're expecting a deceleration of rentals. For the whole Non-Hotel segment, I would say roughly a similar growth rate as last year, obviously, rentals weighing but also rentals being a smaller portion of it, and that is what I would say qualitatively about it. In terms of putting more precision on our double-digit EBITDA growth guidance, not making – putting a finer point on that, what's really in the year. We feel comfortable with this level of precision at this point, and as we go forward in the year, we'll provide more commentary on that.

Okay, thanks. I tried. Thanks Ernst.

And our next question comes from the line of Mark May from Citi. You may begin.

Thank you. I had two if I could. First, it seems like that there's a – I don't know if it's a slide or a meaningful change in your marketing strategy, if I'm gathering from the letter, last year you grew at brand ad spend quite a bit and you pulled back on performance. Now it sounds like that you may be plan to revert back to kind of what we had typically seen in the past, a flat brand, but increasing your performance. If I've got that right, why that change? Is it in part a reflection of some of the limits in using either brand to drive the business? Just kind of curious what's going on there? And then secondly in your letter, you discussed prioritizing investments over managing EBITDA growth in the Non-Hotel segment. Just curious, I think you're growing your Non-Hotel revs by like $100 million a year. That would suggest a pretty meaningful step-up in expenses this year in that segment. If so, what are the different areas that you're investing in, in Non-Hotel expense?

Yes, thanks for those questions. In terms of marketing strategy change, no, the marketing strategy, very similar to what we have done in 2018. Remember that 2017 was the year that we started to do TV. We started to do that in June. 2018, we stepped up the level of investment in TV because we had a full year of spending, spent about $115 million. And as we look into the next year, we feel we have the appropriate level of brand advertising now and so we're going to be spending roughly the same amount. We're happy with what TV has done for us and how brand marketing can perform for TripAdvisor and so we're going to continue with that. As said in our prepared remarks, and as evidenced in the fourth quarter, if you watched our TV spots, we are diversifying the message from just this pure focus on hotel to the broader value prop for TripAdvisor but a similar level of overall spend. In terms of the performance marketing, on the hotel side, continuation of our strategy for 2018 into 2019, we have reduced marketing and have achieved much higher efficiency. That's been the driver of our profitability last year. We drove 27% EBITDA growth last year. And our marketing optimizations in hotel were a big factor of that. And so, see that continuing. Obviously, the biggest impact is going to be in half one because we're going to be lapping into the biggest changes in the second half. For Non-Hotel, as Steve was just describing, we're leaning in on Non-Hotel. It's a high-growing category for experiences and restaurants. And obviously, we're going to capitalize on that. So there, we're leaning in more on marketing. So that's our overall approach. It's not too different from what we've been doing in 2018. In terms of meaningful investments in Non-Hotel, yes, read the script for this. We're investing in both experiences and restaurants. And as we said in our prepared remarks, we're investing in product. We're investing in supply. We're investing in marketing. We're really investing across the platform. We have a large still – large opportunity ahead of us with experiences and restaurants. If we look at international opportunities, if we look at just the supply, we can – so again, if you look at how much of the experiences business is still offline, we have a huge opportunity. And so we're making investments so we can capitalize that for the future.

Thank you.

And our next question comes from the line of Jed Kelly from Oppenheimer. You may begin.

Great, thanks for taking my question. As you roll out your social program, are you sort of thinking of eventually developing loyalty and membership programs for your members? And then has there been any change to this quarter's guidance from last quarter where you guided to healthy growth?

Hi Jed, this is Steve. I'll take the first question on social loyalty. Certainly, we're looking in a variety of different ways that can help bind people to TripAdvisor, loyalty, members. Number one was, is, will always be, a fantastic product experience. As you know, most travelers, as they're going around the world, love seeing TripAdvisor, love planning their trip. It's a brand with a ton of trust. And we don't kind of have to pay people to remember us with kind of point schemes. That's not to say that we aren't thinking about adding components to TripAdvisor membership that would offer additional values than just hearing from us from time to time.

On the second question, so any change from healthy to double-digit, no change in terms of our approach to the year. It's obviously we were less specific in Q3 because we hadn't gone fully through our planning. And now we have gone through the planning. So that's the only difference, but there's no fundamental difference of approach or how we think about 2019 versus how we thought about it three months ago.

All right. And our next question comes from the line of Douglas Anmuth from J.P. Morgan. You may begin.

Thanks for taking the questions. I have two. Can you provide some additional color just on the recent improvements, focus on hotel shopper quality and then also any feedback that you've gotten from your advertisers on these improvements? And secondly, can you give us an update on the hotel media ads business and how you're thinking about the opportunity there going forward? Thanks.

Yes. On the hotel shopper quality improvements that we have been able to drive, yes, we have commented in Q3. And this quarter, we commented on it as well. There's the headline number of hotel shoppers. But then, underneath that, we look at how many shoppers do we pass on to our clients and how well do they convert, and that is obviously an area that we are very focused on because a highly qualified shopper is what we're – hope to be after for our partners. And so we've shown nice improvements. We said in our prepared remarks in Q3 and in Q4 that we actually – despite the fact that the total number of shoppers is going down because of our marketing pullback, the leads we're passing on are going up. And so that's actually a very good outcome for us and somewhat masked by this shopper growth. Additionally, to just product improvements that we're making and conversion improvements that we're making, we've also made other changes to get more highly qualified shoppers into our hotel funnel. We made some changes to the homepage, as you may have seen, at the end of Q3, which was originally very hotel-focused and now is a lot more broader homepage. That is deliberate, fewer hotel shoppers to our hotel pages, but it has had a near-term impact – no near-term impact on revenue but has really impacted the revenue per the hotel shopper we got there. So some of that deceleration of hotel shopper performance you saw from Q3 to Q4 was impacted by that. And some of the increase in revenue per shopper that you saw equally was impacted by that as well. So we're really looking at this with a combined impact of what we're seeing of shoppers and revenue per shopper, very encouraged by the quality of the revenue of the shoppers that we're creating, 14% revenue per shopper growth in Q4. And ultimately, we believe that is the right approach to our auction, rather than just grow the top of the funnel.

This is Steve, Doug. Just to follow up on that. We clearly have scale with our partners. The lead growth that we're sending is clearly meaningful to all of them. And therefore, we're in a good position to be able to drive quality leads to them, and that's reflected in the CPCs. And all that's going well. Even if there are some blips in the hotel shoppers down, RPS up or vice versa in any particular quarter. There are a set of metrics, but at the end of the day, it's the leads we send downstream and what we get paid for that drives our revenue. And then, of course, the other thing driving a growing part of our Hotel biz is the media. And again, no matter how many shoppers we have, there's going to be a set that are just not ready to purchase yet. And since our auction, we get paid based upon how many people are actually booking the hotel, moving that demand around or helping hoteliers get the right people to be interested in their properties is a major thrust of the hotel's business unit. We have sponsor placements. It's getting more and more targeted. It's appearing on more and more pages. We do extensive testing with our travelers, and it's not getting in the way. So it's a very native look-and-feel advertising unit that's working for hoteliers and working for travelers and growing in scope and allows us to form more direct relationships with individual hoteliers all around the globe, leveraging the fact that all of our traffic isn't quite ready to book yet. Picking it up a level, we also have close to 500 million unique visitors a month on the TripAdvisor properties. And so you'll see in the coming – and I'll put this out in years, in the coming years, more of a focus from TripAdvisor on growing the overall media business. That is just a lot of eyeballs focused, for the most part, on travel. And we do – we feel a very good job penetrating the endemic market travel advertisers, but we think there's a lot of opportunity going beyond that. We're laying the groundwork this year, but I feel confident in setting expectations that the overall media business is a good growth vehicle for TripAdvisor, leveraging the fact that we already have so much traffic.

Thank you, guys.

And our next question comes from the line of Kevin Kopelman from Cowen and Company. You may begin.

Great, thanks a lot. I had a question on your TV spend for 2019. Can you give us an update how you're looking at that? You mentioned a similar level of investment. Are you looking to spend around the same amount in 2019 as 2018? Or do you mean that you're going to increase that by about $40 million again? Thanks.

Hey Kevin, yes, to clarify that, a similar spend as in 2018, we're saying in 2019, so another similar increase, a similar total level of spend. In 2018, that was predominantly spent on our hotel messaging. At the end of the year, we started to diversify that away a little bit for more of a focus on experiences. And throughout 2019, you'll see more diversification. But the overall brand spend on TripAdvisor, very similar to 2018 is our target.

Okay, got it. Thanks. And as you move some of the messaging to experiences, are you starting to allocate any of that spend to the Non-Hotel segment?

We are – we have and we are allocating the spend – the brand spend to our Hotel segment and planning to continue that into 2019. Hotel, our brand spend is managed by our Core Ex organization, which sits in our Hotel segment, and that's where we're accruing the expenses.

Okay, got it. Thank you very much.

And our next question comes from the line of Naved Khan from SunTrust. You may begin.

Yes, thanks a lot. I just have two questions. Can you comment on the performance by region for the core hotels, how many Europe did versus Asia and North America? And then can you also tell us how much mobile was as a percentage of the total click-based revenue? I think you've disclosed that in the past.

In terms of regional performance, in Q4, not much to call out there that will be sort of specific or helpful. No trends to highlight in Q4, I would say. In terms of the mobile trends, you saw in the prepared remarks, we showed another quarter of nice revenue per shopper improvements for mobile and continue to see very nice revenue growth in there.

Thanks. Just a quick sort of clarification on that. I think last time, you've sort of talked about the disparity between mobile RPS versus desktop. It was roughly on 40%. Where are we with respect to that disparity?

Yes. It is still about 40%. If you look at Q3 – Q4, the interesting point was that desktop actually had very impressive monetization performance. We grew desktop RPS by 20%, mobile, a little faster, 30%. So it moved a little closer, I guess, in monetization but didn't move that about 40% meaningfully enough. Of course, we're not managing per se to a narrowing of the gap. We're managing to driving as much revenue as we can. So we'll take the fact that desktop grew by 20% and therefore may not have moved in the metric – relevant metric that much.

Thank you.

Thank you. And our next question comes from the line of Tom White from D.A. Davidson. You may begin.

Great. Thanks for taking my question. Just on the difference between hotel shopper growth and the amount of kind of downstream leads you're sending to your partners, is that just a function of the better traffic? Or are there things on the site in terms of kind of on-site conversion or click-through rate that you guys are doing and may still continue to be able to do to keep that growth in leads robust next year relative to hotel shopper growth? And then just on rentals, maybe just a quick update on your longer-term thoughts there, your latest thinking. Are you – it seems like you're going to kind of maybe starve that business a bit in terms of investment this year. Is that just a short-term pullback given just heightened competition? Or are you kind of rethinking your longer-term relevance in that business? Thanks.

Hi. This is Steve. Tom, I'll take the first one on the hotel shopper growth. So yes, we certainly feel like there's a constant effort on the product team to improve how we can take any hotel shopper we have on the site and drive them to be a qualified lead for our partners. As I've mentioned earlier, we look at kind of the output, how many leads we can drive to our partners and the quality of those leads. Hotel shoppers, of course, we want to grow them. We will – to the degree that we can find very high-quality sources of hotel shoppers and buy them effectively, we'll do so. To the extent that we can find low quality but free hotel shoppers, we'll do that all day long as well. So the absolute growth by up a couple of points or down a couple of points in hotel shopper isn't the driving nature of our business. It's what we can do with them. So I acknowledge that up or down for shoppers and sometimes the RPS impact makes it a little fuzzy to understand. But Ernst was trying to explain it earlier in Q4, in particular, and back half of the year in terms of having fewer hotel shoppers entering from the homepage, but a higher quality, the RPS going up. So you'll still expect to see some fluctuation over the course of the year. It's a metric we choose to report. But I want to make clear, it's not the driving metric behind the business at this point.

And our rentals business. So our rentals business, we've seen a decline in revenue in 2018. We're expecting that to continue and actually accelerate a bit in 2019. It's a nicely profitable business. And it is an important business for us to be able to offer to our users, but it's not a business where we have incrementally put new resources to work. If we compare our opportunities in the different parts of our Non-Hotel segment, clearly, a lot of opportunity in experiences. And restaurants, clearly a very strong market position there. For alternative accommodation for rentals, it's been with the presence of two really large competitors in that space. It's been a little harder for us to allocate the resources to it versus allocating them to places like experiences or restaurants. And so that's our approach there. We're picking our battles very clearly and we're picking where we can win. And we pick experiences and restaurants. Q - Great thank you.

And our next question comes for the line of Stephen Ju from Credit Suisse. You may begin.

Hi, thanks. So Steve can you give us any color on your efforts to add more supply on Viator or even LaFourchette? Is there anything you can do to speed up the pace of additions there? And also anything you can share in terms of how the consumer behaves on the site in terms of what percentage of the hotel shoppers ultimately go on to take advantage of either the restaurants or even tours that you have on offer there?

Sure, I think, we have – we feel we’ve been doing a very good job growing supply in 2018 in both restaurants and experiences, and we are preparing for more growth. So I think we have kind of the machine down. We have the technology. It's not a simple – in either business, a simple phone call, want to get connected. There is tech involved in many of the cases, but that's not stopping us. It's not slowing us down. And you should look – certainly expect additional supply growth in both businesses. To the question of how many hotel shoppers are able to cross over to the other products, I don't have a great answer for you at the moment. We do see, obviously – we've seen the same session. People will be looking at multiple things, and that's the unique value that our product provides versus many others. I'd say a lot in terms of how many people over the course of planning a trip will visit more than one category on our site and, again, a nice additional value. Many of them are not members. So we simply see that their device has been to multiple sections on the site within a week, looking at the same city again, indicating it's the same trip or opportunity. And one of the things that we're focused on is to help those travelers save up the list of things that they're looking to do in their itinerary on TripAdvisor, which is something you have to register for and then you can see on all devices and take with you, and that's a nice sticky feature that will be improved that we launched already, and we'll be certainly improving this coming year in order to drive that loyalty and help more of the crossover shopping behavior that we love to see.

And I would add that is still a big opportunity. An underutilized opportunity on our site, is a lot of the focus has been vertical by vertical. And some of the investments we're making at our Core Ex organization and looking more holistically at the user experience is going to help us capture more of that interlinkage between the verticals. I would say that's a big opportunity for us going forward, rather than having captured that historically.

Thank you.

And then our next question comes from the line of James Lee from Mizuho. You may begin.

Thanks for taking my questions, couple of questions on the experience business. And maybe Steve, can you maybe talk about the competitive environment here? Are you seeing maybe the larger OTAs, like Booking and Expedia, becoming more visible? And help remind us a little bit, given the fact that you had built out all these products for experience business, what is your key differentiation versus OTA from a consumer and also from a supplier perspective? And maybe the next question is more for Ernst. You have talked about in your shareholder letter that you have expanded into non-English countries with local payment options. So help us understand the implications there. Are you becoming the merchant of records by adding local payments there? And maybe help us understand what kind of investment you need to make here. And when will that investment be ready for local payments? Thanks.

Sure. Hi, James this is Steve. To the differentiation point, when you look at all of the things that TripAdvisor can help a traveler with, you can start with flights, you can move to hotels, then attractions, then restaurants, the overall ability to stitch it all together, then you can add the community that says – and you can talk to people who are – who have already been there, done that, exchange info in our forums, and then you talk about being inspired of where to go in the first place through brands and influencers. All of those pieces form your complete trip versus an OTA, which is a fabulous booking engine for a hotel or a flight. But again, much more one or two product focus versus taking care of you on the trip. Layer the trust that travelers have in the brand and the recommendations of the hundreds of millions of other travelers that have written reviews on our site, that's a pretty compelling, very different experience than what you get through a bookings site, be it a Marriott.com, a great booking site, or an Expedia or a Booking.com, also great booking sites. So our opportunity remains up funnel. It remains full trip. And it remains based around a considered purchase, a trip that generally will span a couple of days or a week that folks want to make sure it goes right. And then we think we are extremely well situated to win the hearts and minds, to be the preferred vendor for that experience. Ernst?

Yes, in terms of the payment, local payment methods in – for our experiences business that we referenced in our prepared remarks, that is not a change of where we're a merchant of record. We're a merchant of record within our experiences business throughout the world. It is just offering our users, as well as our suppliers, more different opportunities to pay or get paid other than a credit card or a PayPal or – so more local options there. That's what we're moving towards. And as you provide more abilities to pay or be paid, of course, that is helpful for users and helpful to our revenue as well.

Thank you.

[Operator Instructions] Our next question comes from the line of Heath Terry from Goldman Sachs. You may being.

Great thanks. I was just wondering if you could just give us a brief update on hotel direct, particularly in your metasearch results, whether or not you're seeing sort of any progress or willingness on the part of hotels to begin sharing loyalty rates or some of the other kind of deeper relationship and in broader search results. And then on the Non-Hotel business, as you get deeper into that business, how has your thinking evolved about how the long-term margins in that business will compare with the long-term margins in your Hotel business?

Thanks Heath. This is Steve I’ll take the first question. Hotel direct in meta, we certainly have most, if not all of them, interchange participating. So the question is really to what extent will they give us special loyalty rates and to what extent will they be opaque or kind of click here to see the real rate or whether we're able to display the rate on the site, I'd say it remains something that hotels are evaluating and sometimes reevaluating. We're obviously interested in always having the best price we can anywhere on our site. You can see us and some of the partners be chasing it. But if the question is surrounding, a, are we seeing any meaningful change in the hoteliers' interest in doing so, I'd respond with, it seems to be kind of more of the same interesting discussions. Some are more forthcoming than others, but nothing materially different at the moment.

And in terms of Non-Hotel margins, yes, we've said in the past that we expect to get very effective margins in our Non-Hotel businesses. We look at the gross profit performance. There are take rates. We look at the type of cost structure we think is required long term. And we think it is actually going to be long-term hotel like in its margin structure. So we see definitely a lot of upside there. We've seen 14% EBITDA margin in 2018 in Non-Hotel. That is showing some profitability, but it's underneath there, a lot of investment. As we said, we're leaning a little bit more into investment into 2019. We could reap a lot of more profitability from that segment today if we chose to, but we're investing. And over the long term, as scale builds in that business, we believe we can get to a very attractive level of margin, as I said, hotel like.

Great, thank you very much.

I’m showing no further questions at this time. I'd like to turn the call back to Steve Kaufer, Chief Executive Officer for closing remarks.

Well, great. Thanks, everyone, for joining the call. I want to thank all of the TripAdvisor media group employees around the world for a great 2018. Together we've put the business on a great trajectory, and we have exciting growth opportunities ahead. I look forward to updating you all on our progress next quarter. So thanks, everyone.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you all may disconnect. Everyone, have a great day.