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TripAdvisor Inc  (NASDAQ:TRIP)
Q3 2018 Earnings Conference Call
Nov. 08, 2018, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

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

Will Lyons -- Vice President, Investor Relations

Thanks, Heather (ph). 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 closed, we distributed and filed our third quarter 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 will 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, November 8, 2018. 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.

Stephen Kaufer -- President, Chief Executive Officer, Director

Thank you, Will, and good morning, everyone. To summarize our prepared remarks from last night; we posted a strong quarter, we're hitting our key 2018 objectives, we expect healthy EBITDA growth next year and we're investing in a number of attractive growth opportunities. We put the business on a great path and we're excited about what's ahead.

Let's now open up the call for questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Your first question comes from Deepak Mathivanan with Barclays. Your line is open.

Deepak Mathivanan -- Barclays -- Analyst

Hi, guys. Thanks for taking the questions. So, first on Non-Hotel. When should we expect the impact from rentals to kind of moderate from a timing standpoint? You're calling for acceleration in 4Q Non-Hotel revenues, should we assume that the impact from rentals is starting to moderate starting 4Q?

And then second on hotel shoppers, you noted that the referrals to partner sites grew in the latter half, that's impressive considering the marketing reductions. How would you rank -- kind of your marketing efforts versus product initiatives that's sort of delivering this.

And then, are you also seeing cost per referrals increase at this time? Thank you.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Deepak, good morning. This is Ernst. I'll take the first question and I will ask Steve to take the second one. What we called out in our prepared remarks is, there is some seasonality to the relative influence of Rentals, Q3 is a quarter in which rentals is relatively larger in the portfolio compared to other quarters. And so, it had an outsized impact for that reason in the overall growth rate for Non-Hotel. That is less so in Q4.

And over time, of course, with our restaurant business and our experience business growing quite fast and rentals actually, at the moment, declining single-digit. The mix shift will result into Rentals having a smaller and smaller impact.

Stephen Kaufer -- President, Chief Executive Officer, Director

And this is Steve talking about the referrals that we sent downstream to our partners on lower hotel shopper number. I mean, it's certainly a truism that all shoppers are not treated equal. And so, this is a two part answer. The first is, I think we found better ways to find the type of hotel shoppers that are naturally more interested in booking something right now. So we're better able to buy, will call them lower funnel shoppers. So the overall number may be lower, but the quality of them coming into the store, to our store is higher.

And then second, once they're coming in, yes, we continue to make meaningful gains in on-site conversion, especially on the phone which is driving more downstream referrals. So the -- we don't look specifically at the, how much we spend per referral. We always look at it as how much profit can we make for every referral that we buy.

Deepak Mathivanan -- Barclays -- Analyst

Great. Thanks, Steve. Thanks, Ernst.

Stephen Kaufer -- President, Chief Executive Officer, Director

Thank you.

Operator

Thank you. Your next question comes from Lloyd Walmsley with Deutsche Bank. Your line is open.

Lloyd Walmsley -- Deutsche Bank -- Analyst

Thanks. Two, if can. First, just on the new TripAdvisor experience. Is there any color you guys can give us on the test markets, around engagement and the impact on monetization that gives you the confidence to roll that out to, I think most of the globe in the next few weeks?

And then the second one would just be, I think it was intra-quarter, maybe at our conference you guys said quantified the marketing efficiencies is in the seventh inning, it looks like you continue to get really good marketing efficiencies even as you've started to lap the beginning of that. So just wondering if you can give us an update on where that initiative is and how much room left -- you think, you have to cut inefficient spend out of the marketing budget. Thanks.

Stephen Kaufer -- President, Chief Executive Officer, Director

Hi, Lloyd. It's Steve here. So I'll take the first one and defer the second to Ernst. So we have been testing obviously our new experiences both from a product functionality as well as what is some users see, it was a close beta we've let the publishers on. And of course, we think it's a really great user experience that's going to enable travelers to stop popping or to reduce the popping around to lots of different websites, find all the content they want on TripAdvisor, believe it's trusted from all the sources and pull them down the funnel. So it's an additive feature, if you will, to our robust ecosystem as supposed to mentally thinking it as something completely different.

When we look at our test markets, our initial things, I remind everyone that for the traffic, they are just looking at a hotel, they just want to book a hotel. The site actually isn't very different right now, because that component of our segment, of our traffic that's ready to book is looking at our hotel list page, they are looking at our hotel detail page and they find all the info they want. The social experience by design does not get in the way of any of that. When you look at the homepage and who is coming to the homepage, folks who are looking to plan their trip, looking to figure things out; the top part of the page now offers up more of our product opportunities, sort of not just a hotel search. And then the bottom of the page, that wasn't used very much before is now has a very rich social experience.

So again additive and that's what our users are telling us as we've tested it internally or at close beta and with some external users is that, it's not getting in the way of anything that they were doing. Yes, we care a lot about that, the modernization of our current behavior. But it's now inspiring and offering more reasons to come back. After the launch, after it kind of rolls out next week, then we're really going to be able to start looking at cohorts of users, how many new members do we get, how it's the regular weekly repeat, monthly repeat and all the rest of the metrics that we hope will be driven in a positive direction from this.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

And Lloyd, your question on marketing efficiency. Our marketing efficiency was a very important driver of our EBITDA improvement year-over-year in our Hotel segment obviously. You saw that the auction was approximately flat year-over-year, yet significant EBITDA increase; we more or less have been able to drive the same number, the same amount of revenue with a lot less advertising.

To your question of which inning we're in. Thanks for asking in the baseball metaphor, it's a very popular thing in Boston right now. I said seventh inning last quarter, we're probably right now in our eighth inning, we're probably somewhere in the middle on average during Q3. We're getting close to where we think we will end up although there is one inning more of opportunity perhaps to capture. I do want to point out though that we were at a much earlier inning at the beginning of last year. So as we enter into 2019, there is a good half-year of a still -- not fully lapping the full impact of the marketing pullback that we have done.

So you will see continued until about mid next year, a continued impact on year-over-year EBITDA but also a continued impact on a year-over-year shoppers from that. So we see that abating by mid next year. But for instance for Q4, don't expect shoppers to grow, in fact it might -- the year-over-year decline that we saw in Q3 maybe even a little bit more pronounced, a little bit more higher in Q4. But then, we're going to be lapping those sort of peak impact moving into 2019.

The flip side, of course is revenue per shopper. Revenue per shopper was up very nicely in Q3 and we see revenue per shopper accelerate a bit more year-over-year in Q4 as well. So you will see a continued divergence at least until mid next year of those two metrics that makeup auction revenue. But we are very pleased with the marketing efficiency, it's a very nice contributor to the bottom line. We do not think it sets us up badly for the long term, the marketing spend that we have been reducing does not have a significant lifetime value. We've not seen negative impact on -- or other channels from the marketing pull back. And so we feel very confident that this has been a good reset that sets us up really well for the future.

Lloyd Walmsley -- Deutsche Bank -- Analyst

Alright. Well, thank you and can't wait for the new experience to try it out. So, good luck with that.

Stephen Kaufer -- President, Chief Executive Officer, Director

Look forward to your feedback. Thanks.

Operator

Thank you. Your next question comes from Mike Olson with Piper Jaffray. Your line is open.

Mike Olson -- Piper Jaffray -- Analyst

Hey, good morning. For Non-Hotel, EBITDA was strong there. Do you see this as a fairly steady up into the right trajectory for Non-Hotel EBITDA margins on an annual basis or I guess are there any significant investment that you might need to potentially make there that could cause margins to be lumpier. Like -- so in other words, is there a potential for a transition or kind of an investment here in Non-Hotel or is this going to be a fairly consistent upward move in margins for the segment? Thanks.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Yes. So Non-Hotel EBITDA year-over-year increased by 7% in this quarter while revenue increased by 20%. So it's a small margin compression this quarter. Making significant investments particularly in our experiences business. Our experiences business is an area where we're driving for growth and for market share, and for expanding a market that is relatively nascent. We made an acquisition, software (ph) company called Bokun and we're investing very significantly behind that. That investment accelerated in Q3 and will accelerate going forward.

And so that, in our Non-Hotel portfolio that is really the area where we're reinvesting, both on product, supply and marketing.

Mike Olson -- Piper Jaffray -- Analyst

Okay. Thank you.

Operator

Thank you. Your next question comes from Jed Kelly with Oppenheimer. Your line is open.

Jed Kelly -- Oppenheimer & Co., Inc. -- Analyst

Great. Thanks for taking my question. Just on the earlier comment, rentals declining single-digit, was that a quarterly number or was that a full-year number?

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

That was, this quarter.

Jed Kelly -- Oppenheimer & Co., Inc. -- Analyst

Okay. And then, just on Non-Hotel expenses, I think they grew 29% year-over-year. Can you give us a sense if direct marketing expenditures related to Non-Hotel grew similar to the overall expense growth rate, also grew faster?

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Yes, we've seen Non-Hotel expense growth both on the people side, tech and dev in particular, but also on direct marketing spend. And so both were important contributors of the cost growth. And -- is that what you should take in mind when you look at our total direct marketing spend as a company. So we've decreased this quarter year-over-year total direct selling and marketing cost by $45 million, that is in the context of it being up in Non-Hotel. So it underlines the magnitude of the decrease in the Non-Hotel side.

Jed Kelly -- Oppenheimer & Co., Inc. -- Analyst

Thank you, and nice quarter.

Stephen Kaufer -- President, Chief Executive Officer, Director

Thanks.

Operator

Thank you. Your next question comes from Douglas Anmuth with JP Morgan. Your line is open.

Dae Lee -- JP Morgan -- Analyst

Good morning. This is Dae on for Doug. Thanks for taking my question. The question is on the TV spend. It decreased year-over-year. Could you share your latest thoughts on where you are with that spend and what level of spend is built into your 2019 adjusted EBITDA outlook?

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Yes. Thanks, Doug. Yes, it was a modest $7 million decline year-over-year of TV spend in this particular quarter. As you may recall, last year, we launched our TV campaign in June and this year we had a full year of TV spend. So, we've spread out the budget, although higher, spread it out more throughout the year and that resulted in this particular quarter, Q3 being a little lower year-over-year. We are on track to spend the $100 million to $130 million that we indicated. We're probably going to end up somewhere in the middle of that range for this year. TV is performing very nicely for us and that's the reason why we spend as planned. The return that we see from it has been increasing and improving.

And so we look toward next year and a couple of things there, continue to spend on TV next year. We like the channel, it's producing good results for us. In all likelihood, we're going to diversify the message from just a purely hotel shopping experience focus to a broader focus including experiences, including other -- and other things. We haven't fully finalized yet what the TV spend will be, but you should take our statement about expecting healthy EBITDA growth next year to give at least some guard rails of the magnitude of TV increase, if we increase our TV budget.

Dae Lee -- JP Morgan -- Analyst

Got it. Thanks for the color.

Operator

Thank you. Your next question comes from Mark Mahaney with RBC Capital Market. Your line is open.

Shweta Khajuria -- RBC Capital Markets -- Analyst

Hi. This is Shweta for Mark. In Q3'17, you started seeing the auction bidding volatility and that has stabilized over the past few quarters. So what is it like today, and do you think it's back to normal? I know you don't have much control but what are you seeing right now? Thanks.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Yes. Thank you, Shweta. Yes, indeed it was the Q3 2017. And so, if you do the year-over-year comparison, this past Q3 versus Q3 2017, we started to lap all those impacts in Q3. So Q3 to Q3, it was still a modest negative impact year-over-year for us. But toward the end of the quarter, narrowing in and in Q4, we will have pretty much lapped it with the average. So Q4 should be a quarter where you -- that impact has been completely lapped.

We've seen stability in our auction really since Q4 last year, and have no reason to believe it will change in the near or medium-term future. And so everything has been relatively stable since that event last year, and it has been stable in Q3, it has been stable at the start of Q4 as well.

Shweta Khajuria -- RBC Capital Markets -- Analyst

Thank you.

Operator

Thank you. Your next question comes from Naved Khan with SunTrust. Your line is open.

Naved Khan -- SunTrust Robinson Humphrey, Inc. -- Analyst

Yeah. Thanks a lot. Just a couple. So in the guidance for sort of healthy growth in EBITDA for next year, I guess it's still a preliminary outlook. But -- by healthy, should we take it to mean high single-digit, double-digit, what should be the right way to think about it? And then I have a follow-up.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Hi, Naved. Yes, we're not saying more about that than what we're saying right now. As you pointed out, it is early, it's -- we're in our planning but we didn't want to call out our expectation for healthy EBITDA growth next year. This has been a year in which we have been in transition and there have been lots of different moving parts and lapping events, and we just wanted to provide some early clarity on the direction that we saw EBITDA taking for 2019, but not the right time right now to put a finer point on our statement as made.

Naved Khan -- SunTrust Robinson Humphrey, Inc. -- Analyst

Understood. And then Steve, maybe you can update us on the mobile hotel shopper monetization. How does it look like as a percentage of desktop hotel shopper?

Stephen Kaufer -- President, Chief Executive Officer, Director

So we crossed the 50% number on this past quarter in terms of mobile hotel shoppers versus desktop. We continue to grow our mobile hotel shopper or both shoppers as well as revenue per shopper on the phone. This is continuing along trend for us now. The products are obviously getting better, shoppers are more comfortable booking on the phone. So the referrals that we send downstream to our partners are booking better. And our click revenue continues to grow. So while, to be clear, it's still -- a headwind compared to desktop is lessening and you see that in the result of having grown overall revenue per shopper this quarter even with the shift to the phone. So, going well, I am happy about it on both app and mobile app.

Naved Khan -- SunTrust Robinson Humphrey, Inc. -- Analyst

Great. So I think a couple of quarters ago, you said mobile is roughly 40%, our revenue per mobile shopper is roughly 40% of a desktop shopper. Is it still around that level or it has gone up since then, any kind of color or clarity?

Stephen Kaufer -- President, Chief Executive Officer, Director

Yeah. Still around that level, it's obviously gone up a little bit, it's going up a little every time because our mobile revenue per shopper is growing faster than desktop, but it's still roughly the same. Of course, we take it if very good desktop performance in any particular quarter may not make that number go up as fast as otherwise like we had 10% revenue per shopper improvement on desktop, which was a very nice feature here. So it's improving steadily, but it's still in that sort of 40% ballpark.

Naved Khan -- SunTrust Robinson Humphrey, Inc. -- Analyst

Thanks a lot guys.

Stephen Kaufer -- President, Chief Executive Officer, Director

Thank you.

Operator

Thank you. Your next question comes from Eric Sheridan with UBS. Your line is open.

Eric Sheridan -- UBS -- Analyst

Thanks so much guys. So maybe a two-part question. When you think about some of the improvements you made on the platform and now looking out over the next one year to two years, is there an area of either revenue per hotel shopper or hotel shopper growth where you feel like you can get back to sort of trending more in line with the industry on the top line side, whether it be the overall travel industry growing low to mid single digits or online travel growing sort of low double digits?

And then, now that you've gone through a period of efficiencies and performance, marketing and testing, learning on TV, how should we be thinking about the level of investments made -- needed to be made to get back to those levels of growth as well as you look out? Thanks.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Sure, I'll take a stab at that. Thanks, Eric. So when we look over the next year or two, we come at it, remember from this close to 0.5 billion hotel -- 0.5 billion travelers on our site with a huge number of hotel shoppers. So, our opportunity to get folks to come back more and more as we pull them down the funnel to become hotel bookers remains huge just based upon our current reach.

If you think of the new TripAdvisor with the social layer follows the ability to get inspired, those are wonderful travel features. But if you look behind the curtain, you would add, they're going to be -- we expect pulling folks back to TripAdvisor when they're getting closer and closer to buy mode. That's going to take our revenue per shopper. We would hope up. So even with the current traffic building on that repeat, building those membership with our current business model drives a nice potential rev per shopper gains, which on -- rest of our traffic could be huge for us.

Second point, we have our media products. So again, looking at all of the travelers, all of the visitors to the site who are not currently in book mode but are still planning a trip. We have a nice display business. We have a fast growing ads business in both restaurant and hotels, and that's another way that we get to take advantage of the fact that we have so much traffic on both desktop and the phone, because the products are priced the same. But back to the point of the opportunity for us to better leverage the up-funnel traffic enables us to grow revenue without necessarily rolling top of funnel, the way that we've been measuring it before.

Eric Sheridan -- UBS -- Analyst

Thank you.

Stephen Kaufer -- President, Chief Executive Officer, Director

Thank you.

Operator

Thank you. Your next question comes from Kevin Kopelman with Cowen and Company. Your line is open.

Kevin Kopelman -- Cowen and Company -- Analyst

Great. Thanks a lot. Can you give us just an update on your business trends from Google, both how you're doing on the SEO side and also on the paid search side in the Hotel and Non-Hotel. On the Hotel side, to what extent have you been able to use Google hotel price ads in the mix? Thanks.

Stephen Kaufer -- President, Chief Executive Officer, Director

Sure. So we never give specific commentary on the SEO, but we are certainly always watching and noting how Google is interrupting the search results with their own products and we continue to point out that, that's not particularly fair for a dominant search engine to do. But we're accepting it as a reality in several countries -- and all of our modeling takes that into account.

Ernst talked a lot about the paid search channels, and Google is a very big paid search channel for us. So I think that story is already fairly clear. In the Non-Hotel category, we continue to grow our paid search marketing efforts as again on a profitable basis. But as always like any Internet company, an excellent way to acquire new trial for our product.

To Google hotel price ads in particular, yes, we have been using them for a while. It continues to do quite well for us. We run it on a profitable basis and it's delivering top line as well as bottom line, and we would expect to continue to do so.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

And in terms of the volume terms -- if I could just add in volume terms in this quarter, so the revenue per the shopper year-over-year declined. Sorry, the shopper declined year-over-year. It's purely driven by our pull back on marketing channel, including Google as a marketing channel and all the other channels, the non-pay channels including SEO. Our performance has been very robust this quarter. So if you look at sort of our point to explanation of shopper growth softness, it is purely to our paid channels.

Kevin Kopelman -- Cowen and Company -- Analyst

Great. Thanks, Ernst and Steve. That's really helpful. If I could ask one other question, just looking at Q3, can you give us any more color on -- specifically the biggest changes that you made to drive out ROI in the third quarter, and how much of the incremental ROI improvement was related to flagship brand versus other hotel brands? Thanks.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Most of the improvements was in our flagship TripAdvisor brand, that's where we have made most changes. We did call out it in our other hotel area revenue line where we have non-TripAdvisor hotel brands that we've also made some adjustments. But the big impact was in TripAdvisor.

We've continued to increase our sophistication at which we look at the relationship between marketing spend and downstream creation of bookings for our partners and we've again found ways of optimizing there and get better efficiency from our channel. As I said. point out to an earlier question, we're going to see the benefit of that in Q4. We are going to see the benefit of that in next year until we lap that somewhere in the middle of next year.

Kevin Kopelman -- Cowen and Company -- Analyst

Thanks, Ernst.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

I want to call out -- additionally call out just like the difference between Q3 and Q1 and Q2 year-over-year was of course that in Q1 and Q2 we had, we were spending TV, where in '17, Q1, Q2, we hadn't or only in June in Q2, and so that was more normalized at this quarter. So you now see -- in Q3, you see a more normalized TV year-over-year. So you see a more significant impact coming through in the marketing line from the pull back on marketing that you saw in the previous quarters.

Kevin Kopelman -- Cowen and Company -- Analyst

Yeah. Thanks, Ernst.

Operator

Thank you. Your next question comes from Tom White with DA Davidson. Your line is open.

Tom White -- DA Davidson -- Analyst

Great. Thanks for taking my questions. Just the comment about growth in hotel shoppers sent to the partner sites despite hotel shoppers being down overall, Steve, you mentioned on-site conversion improvements, particularly on the phone. I am just wondering if you could provide a little more color on, maybe some examples of exactly what those improvements were. And I presume it's a bunch of different sort of UI tweaks, but it would be curious to hear what types of changes are the most impactful. And then in the prepared remarks, hotel media ads, it sounds like that it was strong in that display-based and subscription line. Any kind of numbers you can give us on the growth trajectory there or color on the types of hotels adopting it or average monthly spend? Thanks.

Stephen Kaufer -- President, Chief Executive Officer, Director

Sure. I will take a stab. So on the impactful sort of conversion, again in both desktop and phone, we do a lot of our development on a common framework. So when we roll something out, it works on both platforms at least mobile web and desktop. And you have relatively straightforward things like making it easier for folks to be entering their dates and you have more sophisticated things such as building the sort order for what hotels are shown to unique individuals as customers to put the best hotel in front of them at the best time. And when we make it easier for folks to find what they're looking for, not surprisingly the click rates improve.

We also have done a lot of work on the pricing engine. So compared to last year, we are showing better prices to our travelers through a better set of clients, as well as just making sure that the best price is surface at the right time.

You're absolutely right. There's no kind of one big thing that's driving that revenue per shopper conversion, but rather the sum of quite a few. And as I think we had mentioned earlier, a lot more of our focus on testing has been moving to the phone. So we're seeing arguably more low hanging fruit there for us to pick up in terms of the rev per shopper numbers.

On the hotel media or media in general for restaurants and hotels, the sponsor placements, the trip ads; again we see continued growth. Certainly, year-over-year, we had nothing in the hotel sponsor placements line item and now it's a nice business for us. Restaurants, we had products and we continue to grow. Those are all part of what we call our hotel solutions and restaurants solutions business units, which continue to take advantage of what we call the up-funnel traffic, taking advantage of folks that are generally still shopping around, not quite ready to book and hotels and restaurants can help influence the best hotel, the best restaurant for travelers and gain visibility. It's a really -- it's a very strong product for them. It's global, it's multi-platform, and so we expect to see obviously continued growth for both of those products for the foreseeable future.

Tom White -- DA Davidson -- Analyst

Thank you.

Operator

Your next question comes from Justin Patterson with Raymond James. Your line is open.

Justin Patterson -- Raymond James -- Analyst

Great. Thank you very much and congratulations on outperforming your hotel margin targets. So given that performance, how do you think about the ability to get back to the high 30% to 40% hotel margin you had prior to 2016. On one hand, you did deliver some efficiencies on OpEx this year and add some potential revenue drivers. On the other hand, those margins also exists in an era where SEO is viable and mobile is a smaller piece of the mix. So just curious on the puts and takes there.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Yes, Justin. Thank you. As we look at the P&L for our Hotel business and look going forward, then we have, of course as you pointed out, this year seen significant margin improvement mostly from advertising rationalization. But then underneath what you can start seeing in Q3 is now that some of the lapping, it gets more visible of the bid-down last year. We see nice revenue per shopper improvement, we just -- as Steve was just talking in the previous question about how we are driving more shoppers to our partners and how that is helping ultimately revenue per shopper.

And there's a lot of mileage still in that. As you know and as we've said it many times, we have a lot of shoppers but relatively few of them, the minority of them engage with our price comparison where we monetize those users the best. And so, the more we can do to become relevant for shoppers as -- for price comparison as we are doing successfully during this year, the more our revenue per shopper will go up. And for our non-pay channels, that purely drops to the bottom line.

And so, if we continue to be effective there, we will see an opportunity there in the future. Steve also talked about our advertising products, which are very high margin too. So having said all of that, improving revenue per shopper over time will give us more opportunity to spend on marketing. And over time perhaps, expand our SEM and other marketing budgets again which may dampen margin but be very helpful to absolute EBITDA.

So those are some of the puts and takes. We look at the business -- at the P&L much more from a absolute profit point of view than a margin point of view because of that -- those choices you can make on mix between paid and non-paid channels. But we see a simple number of drivers that would help us move EBITDA up over the years to come.

Justin Patterson -- Raymond James -- Analyst

Great. Thank you.

Operator

Thank you. Your next question comes from James Lee with Mizuho Securities. Your line is open.

James Lee -- Mizuho Securities -- Analyst

Thanks for taking my questions. Just want to get a update on the Bokun integration and help us understand how quickly can you leverage this acquisition to ramp up bookable listings for your experience business? I think, we are right now about (ph) 14%. And also last quarter you said that long-term margin target is about 20%. So what kind of critical mass in terms of instant booking do you need to get to in order to talk to get to that margin target. And lastly, can you talk about maybe some of the competitive activities in experience business as a number of players also ramp up in the space. Thanks.

Stephen Kaufer -- President, Chief Executive Officer, Director

Hi , James. This is Steve. I'll try to take two out of the three. Starting with the first one, we're really pleased with Bokun and what it enables us to do over the long term. We've been quite aggressive in pushing that product to current audience and to a broader set. The name of the game is really for us and every other attraction. OTAs in the biz is to get more and more of the supply online and bookable if it comes through Bokun, if it comes through some other platform. It's all good and Bokun in turn can distribute that inventory or we can distribute that inventory through other channels as well.

Changing the consumer habit to be able to think about booking, just about any experience they want on our platform before they go, and then booking if they didn't make the decision in advance. Booking the experience in destination in our app is the end game, and Bokun, we are investing in it. It's not an immediate return for us in terms of revenue, it's a long-term play in terms of getting lots of supply online to match with our demand. And so, we work with Bokun, we work with obviously plenty of other partners in the space. Bokun supply growth is continuing. Still, so few of the total players are available in online, there we see plenty of growth ahead.

And then I'll just jump to the competition and then turn it over to Ernst for the question on the finances. Of course, there's lots of players, big players interested in tapping into what some call the last big sector in the travel space that hasn't really migrated online. Air is online, hotel is online but experience is much less so. But, we're in the lead or one of the leaders with several other players, but the total volume of booked online versus what's currently booked offline is still really small comparatively. To the degree that TripAdvisor and all of our -- all of the competitors that also book experiences continue to grow. My view is that, if the pie grows, the consumer habits change and we all benefit.

I am much more interested in changing that consumer habit and much more interested in teaching people that they can book all those experiences online through us. Then, I am worried about any particular competitor taking share in this space.

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Okay. In terms of margins and profitability for Non-Hotel. So the fundamentals for both our experiences business and restaurants are quite strong, the margins are -- the commission levels are good. And so the long-term margin structure for this business is very healthy and it can reach levels that we have seen in the hotel business as well. But that's over a longer period of time because we are significantly investing in making sure we grow the platform. We're in a pace right now where it is important for us to continue our leadership position, particularly in experiences and keep investing behind that, and that's what we're doing. So our focus is not so much on reaching the potential margin structure in the very near term, our focus is on making sure we ramp revenue first before we seek to achieve that.

James Lee -- Mizuho Securities -- Analyst

Okay. A quick follow-up question regarding the news feed products. And maybe Steve, maybe you can help us understand maybe the on-boarding process from the user's perspective. Do we need to go in and kind of sign up, put in the information about the user and kind of create new account there or can we leverage -- maybe some of the social media accounts like Facebook or Google to sign in.

And same question for connections as well. Can users bring their own social connections into play, into the platform or do they need to create new ones on your platform. Thanks.

Stephen Kaufer -- President, Chief Executive Officer, Director

Sure. Good questions. You can sign into TripAdvisor via Google or Facebook today. That's an existing functionality. If you sign in via Facebook, then we automatically can see the list of your friends and part of the on-boarding process will be, which of these trends would you like to follow. And that's a very nice sort of straightforward flow.

Google doesn't quite have that, but we're going to be going ahead and suggesting people that you might want to follow -- suggesting, sorry, less people for Google but more brands and travel influencers. And based upon your behavior on the site, we're going to be trying to get better and better about interesting people, interesting brands, interesting influencers to help grow your experience. And then of course as you go through the site, go through the experience, as you see people that are writing stuff that you're interested in, you're, of course, able to follow them.

And if you use kind of a site like Twitter or Instagram, that's part of the fun, that's part of the process, seeing all the great content that's out there. Following them and then we're naturally going to be putting more of their content into your feed and into our emails for you, so that you get inspired about trips even when you're not actively planning one.

James Lee -- Mizuho Securities -- Analyst

Great. Thanks.

Operator

Thank you. And this conclude our question-and-answer session for today. I'd like to turn the call back over to Chief Executive Officer, Steve Kaufer for closing remarks.

Stephen Kaufer -- President, Chief Executive Officer, Director

Well, great. Thanks everyone for joining the call. It's been a great 2018 and it really wouldn't be possible without the terrific efforts of all of our employees. To all the TripAdvisor Media Group team members around the world, thank you. Together we 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.

Operator

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

Duration: 42 minutes

Call participants:

Will Lyons -- Vice President, Investor Relations

Stephen Kaufer -- President, Chief Executive Officer, Director

Deepak Mathivanan -- Barclays -- Analyst

Ernst Teunissen -- Chief Financial Officer, Senior Vice President, Treasurer

Lloyd Walmsley -- Deutsche Bank -- Analyst

Mike Olson -- Piper Jaffray -- Analyst

Jed Kelly -- Oppenheimer & Co., Inc. -- Analyst

Dae Lee -- JP Morgan -- Analyst

Shweta Khajuria -- RBC Capital Markets -- Analyst

Naved Khan -- SunTrust Robinson Humphrey, Inc. -- Analyst

Eric Sheridan -- UBS -- Analyst

Kevin Kopelman -- Cowen and Company -- Analyst

Tom White -- DA Davidson -- Analyst

Justin Patterson -- Raymond James -- Analyst

James Lee -- Mizuho Securities -- Analyst

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