Good day, ladies and gentlemen, thank you for standing by, and welcome to the trivago Q3 Earnings Call 2022. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I must advise you the call is being recorded today, Wednesday, the 2nd of November 2022. We are pleased to be joined on the call today by Axel Hefer, trivago’s CEO and Managing Director; and Matthias Tillmann, trivago’s CFO and Managing Director. The following discussion including responses to your questions reflects management’s views as of today Wednesday, November 2, 2022, only. trivago does 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 expect, we believe, we anticipate or similar statements. Please refer to the Q3 2022 operating and financial review and the company’s other filings with the SEC for information about factors which could cause trivago’s 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 trivago’s operating and financial review, which is posted on the company’s IR website at ir.trivago.com. You are encouraged to periodically visit trivago’s Investor Relations site for important content. Finally, unless otherwise stated, all comparisons on this call will be against results for the comparable period of 2021. With that, let me turn the call over to Axel.

Thank you, everyone, for joining us for our Q3 2022 earnings call today. Looking back at the third quarter, we have experienced a very strong summer. COVID restrictions have been lifted in most parts of the world, and people have used the opportunity to travel across the world. Travelers were willing to spend even though prices have risen sharply this year. In this inflationary environment, we’ve seen strong demand for our services, helping users save money. We are very happy with our strong operational performance, as we exceeded our own adjusted EBITDA projection. Matthias will cover the details shortly. And I would like to thank our customers and our employees for the strong quarter. Looking forward, we believe that inflation and labor shortages will continue to drive prices of traveler. We expect consumers to adjust their travel behavior in the next 12 months, going for shorter trips, cheaper destinations, and comparing the accommodations more. In Q3, we have seen first signs of this change in consumer behavior as the length of stay on our platform slightly contracted, and consumer started choosing lower rates, especially in our Developed Europe segment. Nevertheless, we expect the overall travel spending to grow in absolute terms and higher prices to compensate for software travel demand. As a business that is helping users to save money, we are optimistic about our outlook for next year, and we’ll continue to focus on our core value proposition as we have done this summer with very positive results.

Great. Thank you, Axel, and good morning, everyone. We are coming out of a very strong summer season in the Northern Hemisphere, and that is reflected in our strong operational performance in the third quarter. Our adjusted EBITDA, which excludes an impairment of goodwill and intangible assets that we recorded this quarter, more than doubled compared to last year, and with €33.5 million was the highest quarterly adjusted EBITDA in the history of the company. Referral Revenue increased 33% year-on-year as a result of higher average booking values, our focus on higher quality traffic and a healthy auction. The combination of those factors led to strong increases in our Revenue per Qualified Referrals in all regions. Given there are still some noise in the year-over-year comparisons, let me give you a bit more color on our Qualified Referrals and Revenue per Qualified referrals in the third quarter by looking at the development versus 2019. On a global level, Qualified Referrals remained stable at above 60% of 2019 levels. Sequentially, Qualified Referrals increased approximately 20% and we reached the highest absolute Qualified Referral volume in July in line with our pre-COVID seasonality. Our Revenue per Qualified Referral was up 16% versus 2019, mainly driven by an increase in our average booking value, while both our conversion and monetization reached 2019 levels again. So higher average booking values drove a sequential improvement in Referral Revenue from 64% in the second quarter to 73% in the third quarter both relative to 2019. Looking at the regions. In Developed Europe, Qualified Referrals were at 73% of 2019 levels, slightly down from the 79% in the second quarter. Let me remind everyone that in the third quarter in 2019, we optimized for traffic volume, particularly in our performance marketing channels, whereas this year we remain…

Thank you. [Operator Instructions] Thank you. We’ll now take our first question. This is from the line of Naved Khan from Truist Securities. Please go ahead.

Yeah. Hi. Thanks. Thanks a lot. So a couple of questions for me. First, on this shortening in the length of stay, can you may be quantify that for us? And also may be talk about, have you seen any changes in the downstream conversion, when people click through to the links? The other question I had is around the marketing, I think you spoke about some increasing competition in some of the markets. Can you give more specific as to which markets you’re seeing within? And do you – this to further intensify or just give us [your process] [ph]?

Yeah. Thank you, Naved. Good questions though. So on your first question, length of stay, I mean, I gave some data points on the average booking value, and it’s reflected in there. But just to be clear, as I said, in Americas, there was no change really to 2019, so it’s rather flat. And then we saw a decrease in Europe and in Rest of World. And it’s – I mean, to give you a range between 5% and 15% is a bit volatile. But that’s kind of the ballpark where we see it for both regions. On the downstream conversion, in the third quarter, in Americas and Rest of World, the conversion was roughly stable versus 2019, whereas in Europe, it was slightly higher. And then in October, there was similar with the difference in Americas where we saw relative to 2019, an increase in the conversion rates. And then on the marketing side, yeah, my comment there referred mostly to Europe, where we have seen it, and why is that? We have seen in not every country, but in a couple of our core markets in the segment, that local advertisers stepped up, in particular, compared to last year where maybe some advertisers are still a bit cautious, and they entered the auction and bid at higher levels, driving up costs. And as I said, we didn’t adjust our overall target, we continue to optimize for absolute contribution. And that meant that while maintaining our profitability, we lost some volume there. It is not one thing I can call out for every market, so it’s a bit different market by market. But in some markets they were players where – when we look at that, we don’t think it’s sustainable, because I think they are not bidding at profitable levels. But, obviously, let me speculating what will happen going forward. But in some markets, my expectation would be that it could ease a little bit from what we see there.

Okay. That’s very helpful. A follow-up question, if I may. So in the – and talking about the long-term projects, I think you talked about directly multiple hotels, and increasing the coverage on those. What kind of timeline should we be thinking about there and give us some more detail in terms of how you kind of expect to drive monetization here?

Yeah. So on our direct-hotel coverage, as we said in the shareholder letter, we have launched a couple of new initiatives that we’re quite confident on that that will make a difference to our coverage relatively speaking soon. So we do think that we will see a noticeable improvement in coverage in the next 12-month. [Call Ends Abruptly]