HomeToGo SE

XETRA:HTG

Earnings Call Transcript 2021-Q4

[Patrick Andrae, executive]

Thank you, and welcome and thank you all for joining our call today. Before we start, let me first address 2 very important points. First, obviously, it feels difficult to announce such business updates when war continues to ravage in Ukraine. We reiterate that we stand in solidarity with the people of Ukraine and hope, obviously, for a resolution as soon as possible there.

Secondly, I also want to point out to thank all of our teams for the great passion and dedication they have put into their work over the last year, especially to make our public listing in September 2021, such a success.

Looking back at 2021, we are particularly pleased to report that we are able to combine significant progress on our strategic agenda with strong financial results. Our business model has again demonstrated its resilience in a year characterized by industry-wide challenges as a result of lockdown measures, particularly in the first half of 2021. I would like to call out some of the highlights for you now that we encountered 2021.

2021 marks an outstanding year in our history. Not only were we the first European tech company to successfully De-SPAC and list on the Frankfurt Stock Exchange in September, but we also delivered on our strategy. We remain focused on our goal of connecting travelers and supply partners around the world to make incredible homes easily accessible to everyone. This is reflected in the around 50 million visits in peak months across our domains, to accept the more than 50 million listings of more than 31,000 trusted partners on our marketplace.

In 2021, we were also able to significantly increase the share of our on-site business to 45% of our booking revenues, which represents a year-over-year increase of almost 50%. If just looking at quarter 4 last year alone, our on-site booking revenues increased more than threefold. And this -- and with this, we have also proven that we can grow despite a challenging year for the travel industry.

Booking revenues grew by 41%, IFRS revenues advanced by 44% year-over-year, especially remarkable as we were very stable in 2020 versus 2019, in particular, compared to the negative effects we've seen throughout the rest of the travel industry. Hence 2021 has been very successful overall, delivering ahead of our initial guidance from EUR 80 million IFRS revenues by almost 20%. So we were able to deliver exceptionally strong finish to the year, growing booking revenues in quarter 4 even by 111% or IFRS revenues by 142% year-over-year.

Also, the bottom line was a success. While we doubled down on customer acquisition and retention, we were able to deliver profitability ahead of our expectations. During this year, we also further strengthened our balance sheet, successfully raising these EUR 250 million in capital through our SPAC IPO and PIPE financing. Going forward, this will allow us to further accelerate our strategy and to invest in both new technologies and strategic growth.

Last but not least, you might have already read it this morning in the news, we were able to strengthen our ecosystem through today's announcement that we have acquired e-domizil GmbH, which will be highly accretive to our marketplace business model, specifically, if you look into terms of our on-site growth goals as the inventory is 100% on-site and they are a profitable business.

Coming to our business and strategy update. Let me remind you quickly of our vision. We aim to make incredible homes easily accessible to everyone. What does it mean? As an outcome, the idea is simple and can be seen as 2 key goals in terms of how we think about our customers on one side, the travelers on the other side, our supply partners. For travelers, we want to create an incredible experience, be the go to, the first destination they think of whenever they want to book a vacation rental. For our partners, we are focused on advancing new technology solutions around our marketplace to become the industry's operating system and to enable growth for the entire alternative accommodation industry.

And what does this alternative recommendation market look like in terms of the opportunity. At our Analyst Day back in October and during our PIPE IPO roadshow, we talked about the immense market opportunity ahead of us. The market for accommodation is forecasted to grow to EUR 1.7 trillion in the next decade. This underlines how much growth leeway we have ahead of us. Since the onset of the pandemic in March 2020, the past 2 years have shown us 2 important insights. First, COVID pandemic was an acceleration of a long-term trend. As the terms of accommodation vacation rentals were already prior COVID-19, the fastest-growing vertical in travel and now have been established as a new type guy, lockdowns and restrictions, more and more travelers opting to socially distance themselves, new use case of remote workers taking vacations in sunny villages to escape the winter months. And this altogether was just the start because we expect these structural shifts are here to stay as more and more of these travelers get educated or got educated about these advantages and different use cases of alternative accommodation in vacation rentals.

Secondly, our HomeToGo platform was exactly the right move to anticipate this. Our platform is equipped to play an important role in the entire alternative accommodation market. And that's on both sides of the market, the travelers and the supply partners, especially as we are accelerating and enabling OTAs, property managers and other partners to connect with travelers on our marketplace, and profit from our broadening technology solutions in our platform.

So we have proven that we are resilient. We can execute on our targets. We can scale our business and technology infrastructure, and we have the right strategy that is directly aligned with the future of the industry. So this makes us aim high. Our goal is to scale our business to more than EUR 1 billion in booking revenues by 2028, '29, growing HomeToGo almost tenfold versus 2021 levels. This means we will grow our business at a CAGR of 30% to 35% between 2021 and 2028, '29. This would also be the equivalent to a GBV at this time of around EUR 8 billion to EUR 10 billion or a market share of around 0.5% of the overall accommodation market.

To enable this ambitious growth trajectory, we aim for several results. First, we want to grow multiple times faster than the overall market for alternative accommodations in our core markets. And therefore, we continue to invest into our on-site business, which drives high take rates and more loyal customers with higher customer lifetime rates to HomeToGo. These higher take rates and higher repeat business will enable us to invest even more into marketing while improving our profitability.

Secondly, we will manage our U.S. business more actively in the future, especially in regards to supply. For the sake of long-term growth opportunity in the U.S., we are now willing to invest. What does it mean? We are realistic that growth and profitability might not move drastically in the short term in U.S., but we are now laying the foundation for faster and more efficient scaling of our U.S. business in the years beyond, targeting on-site growth with the successful learnings from Europe.

Third, we will focus on strategic M&A to enhance and accelerate our global growth and strategy. And fourth, we will also scale our subscription and services business, leveraging new technology solutions for the entire alternative accommodation system. So to us, this growth outlook is very exciting for the whole team at HomeToGo, and it underlines we are just getting started.

In the last 12 months, we have delivered towards our ambition and our targets. So we have grown our site traffic delivering towards becoming the go-to destination for vacation rentals. Visits growing by almost 20% and -- in a single year. We have also achieved our financial growth targets. More than 50% in booking revenue growth to EUR 124 million year-over-year and reflecting these, this is EUR 40 million in booking revenues by far the highest absolute growth in any year thus far.

App and mobile booking revenues grew 60% year-over-year to EUR 50 million, now accounted for around 40% of our booking revenues. So we are really proud of these results and of our entire team. In order to progress towards our vision, we are focusing on 3 key strategic areas. Our first key lever, our travelers. We want to create an unparalleled experience to drive return demand. How do we do that? We are building an even more attractive customer experience for our strongest customer relationships. And we will manage that by health of our cohorts, share of wallet or basket size and the resulting customer lifetime value. Our second key lever, our supply partners. We will fully utilize the potential of our existing suppliers of significantly more than 15 million offers. We will also continue to grow our global footprint and scale our diversified supply. And this is done through both our business development initiatives and with our current partners, but as well through targeted M&A.

Our third strategic key lever are our technology solutions. So we will keep developing new solutions to enable growth for our partners and the entire alternative accommodation industry to become the industry's operating system. While at the same time, we will further roll out and monetize our existing solutions that we have already on the market.

These 3 priorities are meant to speed up our strategic highly scalable flywheel. So let me dive into a bit more into the next -- in these 3 areas on the next slide.

Our ambition is to become the brand that consumers naturally gravitate to for all of their vacation rental planning. So we aim to be the go-to trusted app and website to find and book the perfect rental for any trip. And basically, if you ask how do we want to get there and claim this position, it's simple. First, we aim to have the most extensive and curated inventory of vacation rentals. As most of you know already today, we have the largest selection of vacation rentals. But ultimately, travelers need to think when a vacation rental is not available on HomeToGo, it probably does not exist. No point in looking somewhere else.

Secondly, the experience is tailored exactly to you, the traveler. So we have inserters, features, to make it exactly what you want, whether you're traveling with pets, searching for a villa in a faraway tropical escape or seeking a remote getaway nearby. It is your personal gateway to the entire most comprehensive world of vacation rentals. Your HomeToGo... relax, spend time with your family, adventure work from and so on, basically accomplishing whatever your use case is.

And last but not least, we are aiming to be the most convenient way to book vacation rentals with trusted checkout and payment options and more innovations to come . And we already see it happening. Our customers enjoy the world's largest collection of vacation rentals with more than 15 million offers. But even more importantly, travelers know us and visit us more frequently. Already today, we have around 50 million monthly visits in our peak months. In order to make it even more valuable for our travelers to visit HomeToGo and its brands, we continuously drive innovation to make the experience smart and even more personalized. By way, for example, we run more than 100 AB tests simultaneously to improve the user experience along every stage of our travelers booking journey and new features due to that being rolled out basically every week.

These figures clearly demonstrate the progress in our multiyear growth journey. Our second strategic initiative is our supply. Here, the goal is to make more of our business directly on site on our platform, where the traveler searches, books and pays for a rental entirely on HomeToGo without clicking out to a partner. This is our on-site business. And this is a journey that we have been on for several years. And last year, we were able to significantly accelerate our progress here. In 2021, more than 44% of our booking revenues, excluding subscription and service revenues were generated from partner listings directly on site on our platform. That means share of on-site grew by 13 percentage points from 31% in 2020.

In absolute terms, on-site booking revenues increased by 116% year-over-year and even 2.5x versus 2019. We saw this tremendous progress across 2 dimensions, basically. First of all, on site, and that is a success story since we first started it. So we are continuously driving our take rate and customer retention, and it now forms the basis for an increasing share of repeat customers which have a 5x higher profitability and, therefore, a high customer lifetime value.

Due to that, we are now investing further into on-site. While the U.S. business still has a ways to go, our start of focusing on U.S. on-site led to tripling the onsite share in the past 12 months, which helped to advance our overall onsite share as well. And as mentioned previously, seeing these first positive results in the U.S. market combined with the success of our investments in the DACH and European regions brought last year, we are willing to invest in our U.S. business to sustainably and rapidly scale our business and enjoy the connected benefits down the road.

The second dimension is a constant enhancement to our digital experience, to invite even more partners to list their offers directly onsite, enjoying improved conversion and growth that we showed you also in the last year with partners having like 60x the revenues after a few years in joining our onsite business. As a result, we saw that 100% of the last 250 newly signed partners signed to join our platform on site with an average take rate of 13.9%. At the same time, we retained 100% of our top 50 onsite partners. I think this clearly demonstrates the success of our platform and the onsite business.

The third strategic initiative I would like to highlight are our tech solutions for our ecosystem. The alternative accommodation market is a large and highly fragmented market with a strong desire for advanced capabilities. With our subscription and services, we are developing tools that can be a great help for suppliers to tackle their challenges and scale their own business, firstly, with our marketplace to give access to a huge market and demand. Second, we observe that our partners are more and more looking for capabilities around tech, data, marketing and even supply to complement their business. Therefore, we offer a wealth of features and infrastructure. And specifically for homeowners, we already provide a Shopify like convenient all-in-one solution with the possibility to manage listings and syncing them especially around availabilities and prices over multiple rental platforms. And this is a service that also helps the partner in rental platforms like Airbnb, Booking.com or VRBO, amongst others, to get more accurate availability and prices as well as easier access to supply.

Looking ahead, we aim to allow more of our technology solutions to be accessible even outside of our marketplace as a service for third parties. And this highly adaptable and flexible, meaning we will be able to tailor the solutions depending on each partner's specific strategy and needs. Once at scale, we aim to be the industry's operating system with the marketplace in its center, fueling growth for the entire alternative accommodation ecosystem. And what does it mean financially?

In 2021, revenues from subscription services represented 9% of our IFRS revenues. So we have a strong balance sheet, and we are in a great position to invest to drive EUR 1 billion in booking revenues by 2028, '29. Our advantages are unique and highly scalable. On the traveler side, we have a strong reach as a frequently visited platform, and we will further invest into acquiring more travelers as customers and building deeper relationships with them through investments in our proposition. On the supply partner side, we have an unmatched access to vacation renters from OTAs, competent -- property managers and other partners. This choice is ultimately built on our trust-based relationship, and we will continue to invest here. The base of our platform, scaling is our underlying technability and infrastructure. 50% of our team works across product and technology and is narrowly focused on driving new tech innovations with data to solve the current challenges in a transfer accommodation. And they are manyfold as elaborated on the previous slides.

If you sum it up, our competitive advantages are powerful, highly scalable, and we have a great track record for further investing into these assets. And while we focus on organic investments, we seek the support through targeted M&A.

Regarding M&A, I'm pleased to announce the acquisition of e-domizil GmbH. e-domizil has already been one of our core and trusted partners for a long time. This includes the vacation rental brands e-domizil, tourist-online, BELLEVUE Ferienhaus and atraveo, which also runs TUI Villas. As such, e-domizil has a leading presence in Europe, Germany and Switzerland as well as attractive holiday hotspots combined with a wealth of history and experience of working directly with property managers actually for more than 20 years.

We are convinced that e-domizil with more than 37,000 -- 370,000 offers and localized domains in 14 countries will be highly accretive to HomeToGo. e-domizil has a sizable scale with EUR 200 million in GPV in 2021 and generated more than EUR 20 million IFRS revenues in this year. With a strong financial performance that we believe it has the potential to sustain this performance beyond 2022. More importantly, the acquisition resonates very well with our own strategy as e-domizil runs an entirely on site business and operating it at above HomeToGo's average take rate while being profitable.

Therefore, it strongly contributes to our path to breakeven within the next 2 years. The team at e-domizil has more than 20 years' experience especially of working directly with property managers, who will now be able to benefit along our journey together from our global reach and technology services.

So to sum it up, we are very, very excited to welcome the e-domizil team to the HomeToGo Group to drive innovation and form new synergies together. And this concludes our strategy and business update. And I would now hand over to our CFO, Steffen. He will guide you through our financial performance update. Thank you.

[Steffen Schneider, executive]

Thank you, Patrick, and welcome, everybody. Very happy to be here. Also, as I will now go through the numbers, just to let you know, we will upload the presentation after this call. So in case you are missing something don't you worry about it.

Looking back at 2021, we are particularly pleased to report that we were able to combine significant progress on our strategic agenda with strong financial results. It was a remarkable year and with consumers increasingly choosing alternative accommodation over other options, our business model has proven again to be highly resilient like we already did in 2020, resulting in strong growth despite an overall challenging year for the traditional travel industry.

Demand for alternative accommodation remained strong throughout 2021 and this mirrors well in our financials. But let's have a deeper look at our top line. Group top line growth was strong with gross booking value or GBV growing by 15% in 2021 to more than EUR 1.4 billion. Going forward, we will split total GBV in GBV from CPA, both on-site and off-site, where we know exactly the GBV and GBV from others, mainly CPC or cost-per-click where we continue to estimate the gross booking value like we did for many years. So we are not changing anything. This distinction, however, is important when we talk about the take rate in a few slides.

Looking at GBV from CPA, I would like to emphasize that we were able to grow even faster by 29% year-over-year, exceeding the EUR 1 billion mark for the first time and reached more than EUR 1.1 billion. Going forward, we will move away from providing guidance on GBV. However, we will regularly update on the achieved actuals.

Looking closer at Q4, in particular, we see exceptionally strong development of more than 53% GBV growth overall when compared to 2020. The average basket size continued to increase year-over-year as people were upgrading their holidays due to lack of travel or taking vacations and therefore, positively contributed to gross booking value growth. The increase in basket size, in particular driven by an increase in length of stay versus 2020 of around 8%, as travelers tend to take longer holidays and to do vacations, as well as an average daily rate or ADR growth of 15% year-over-year as a result of general increases in prices as well as the destination mix effect due to the relatively high share of U.S. bookings.

As you know, U.S. customers are the ones with the highest basket sizes. In line with this development, take rates continued on its positive trend, averaging 8.4% in 2021, significantly ahead of our guidance, which was more than 7.2% amidst increased on-site business and increased cost-per-click.

As described, when we looked at estimated GBV from others, mainly cost-per-click, the flip side of a relatively low GBV is a high take rate as can be seen in the second half of 2021. The take rate from others is the dotted purple line. And as you can see, it's above 10%, and this is more in line with our onsite take rate.

Looking at it from a different point of view. So for example, applying a take rate of 5% on all these cost per click revenues, which will compare to a 6.25% CPA offsite take rate, which is around in the middle of the offsite take rate to the lack of cancellation risk, which you don't have with CPC, we would have an additional gross booking value of EUR 200 million, and the overall take rate would still be 7.4% so still ahead of guidance, and this would fully reflect the higher shift towards onsite.

For 2022, we expect the positive take rate trend to continue, really driven by onsite and as Patrick already mentioned before, the last 250 partners who signed up to our onsite platform have an average take rate of 13.9%. So we are making huge progress on this one. Sorry about that. I was just looking forward in the presentation.

So as said, booking revenues in 2021 amounted to EUR 124 million, representing an increase of 51%. This growth was primarily driven by our strong onsite business. Onsite generated for the first time ever more booking revenues than our offsite business. This is an achievement we are all very proud of. Subscription and services also grew very strongly, increasing by 50% year-over-year.

In Q4, we were able to continue on this positive way with booking revenues amounting to more than EUR 23 million, which is like more than 100% growth year-over-year. In addition, I would like to emphasize that we were able to accelerate our growth in the final quarter of the year when compared on a 2-year basis to Q4 2019, which was, as you know, the last real quarter before COVID hit us.

Since we already mentioned that we are progressing very well on all core growth dimensions, I will keep it very short at this point. Onsite share is increased both in Europe as well as in North America. In 2021, onsite bookings almost doubled. And in the U.S., while still we have a long way to go, we are well on track, and it's 1 of our key initiatives for 2022.

Looking at IFRS revenues. The strong performance in '21 is also reflected in the IFRS revenues, which amounted to EUR 95 million, well above our initial guidance of EUR 80 million during our PIPE roadshow as well as the revised guidance of EUR 85 million to EUR 90 million. Similar to booking revenues, IFRS revenues embarked by its largest ever absolute year-on-year increase.

Looking at the performance of Q4 '21, we had a strong finish, and IFRS revenues amounted to more than EUR 21 million with a growth of more than 140%.

Let's now take a look at our profitability. We ended the year at negative EUR 21 million in terms of adjusted EBITDA. This represents a decrease of roughly EUR 20 million year-on-year as we deliberately ramped up our marketing investments to capture the full demand protection. As you know from our earlier calls, in particular, we spent more than EUR 11 million to attract onsite customers that we can move easily, convert into our app and CRM and, therefore, have higher customer lifetime values. As Patrick has shown in his part earlier on, the app is an important tool for all our bookings. These investments already paid off in 2021 with higher take rates and booking revenues, and it will continue to pay off over the next few years as these onsite customers are significantly more efficient to retarget and repeat customers are significantly more profitable. We will continue to invest in 2022, and I will come to that later in the outlook.

Whilst profitability for the full year was below the prior year, it came in ahead of expectations on the back of a better-than-anticipated top line development.

Looking at Q4, it should be noted that our profit margin in Q4 actually improved compared to prior year levels despite these additional investments.

Let me now give you a little bit more color on our cost line development that drove group level profitability. Gross margin decreased marginally by 0.4 percentage points year-on-year due to higher expenses for hosting and higher amortization of self-developed software partly also arising from the additional amortization of the fair value step-up from the acquisition of Smoobu, which is our SaaS business. Secondly, our sales and marketing cost ratio increased by 22 percentage points year-on-year as we stepped up our customer acquisition and engagement investments supported by our ROI-based marketing approach, to capture the full demand opportunity.

Please also note that we have an all-time low in marketing cost ratio recorded in 2020 as a result of our initial crisis response. And that's very important for us to stress that point, we can act very fast. When we need to cut costs, we can do that really fast.

When comparing our marketing cost ratio versus 2019, we were able to improve. Looking at the product development operating costs, it continued to improve year-over-year as a result of operating leverage and scale effects.

Last but not least, admin decreased marginally as a result of a hiring push growing our team to over 400 employees globally. When looking at Q4, we saw a complete reversal of the heavily impacted Q4 '20 performance, which is well reflected in the positive cost line development.

Before we move on, let me briefly use this opportunity to comment on the development of our net income as well. In 2021, the group incurred a consolidated net loss of EUR 167 million, compared to minus EUR 24 million in 2020. The decrease compared to the previous period is largely related to the listing service expense of EUR 70 million and nonrecurring consulting expenses that were occurred as part of the business combination with Lakestar SPAC I in 2021 of around EUR 12 million as well as share-based compensation of EUR 32 million.

As we conclude this section on our annual and quarterly financials, let us take a look at the development of our liquidity position. During Q4, we reported a negative free cash flow of EUR 47 million, mainly due to an outflow of taxes and social contributions from the old HomeToGo virtual share program, which became due to the completion of the business combination. Thanks to the cash injection from the De-SPAC and PIPE financing of EUR 250 million, our cash balance at the end of 2021 amounted to EUR 153 million. In addition, EUR 100 million have been parked in a money market funds to avoid negative interest rates. Although the money is accessible within 2 days, it is shown under other financial assets in the balance sheet as well as investments in the cash flow statement.

So if you might wonder where it's all the money, it's the way we have to present it in our balance sheet and cash flow statement, but it's liquid and we can get it very fast. We are truly thankful to all our investors who have backed this transaction and have thereby helped to make it a success.

Let us now turn and look at our outlook. For 2022, we expect positive tailwinds to continue with additional consumer demand for travel and preference for vacation rental to persist as pandemic-related restrictions continue to lift. While we stay committed to maintain our strong growth trajectory and to unlock the full value of our marketplace model and turn profitable in the next 2 years, we see a big opportunity in 2022 to strengthen our efforts to drive our U.S. onsite business and supply growth. We all have seen this potential for success play out in our European business, where benefits from more direct access to inventory is evidenced by the higher take rate and increased share of repeat customers, in particular in the DACH region.

In fact, the profitability of a repeat customer is 5x higher than that of a new customer. Consequently, we are willing to sacrifice short-term growth and profitability for the sake of our long-term and more quantitative growth opportunity by building out our U.S. on-site business to scale this market faster and more efficiently. Please note that the guidance in the annual report and what you can see here on the slide is before any positive consolidation effect from the acquisition of e-domizil as outlined by Patrick. The reason being very simple, that the audit was completed yesterday on March 30 and the transaction today on March 31. And therefore, we had to show it on a stand-alone basis.

To specify how this will translate into our financial performance, IFRS revenues on a stand-alone basis are expected to grow at a rate of 27% to 32% to more than EUR 120 million. Revenues are forecast to grow at a faster pace than booking revenues during 2022 as a consequence of the mentioned EUR 19 million bookings backlog we have from 2021, which will only be recognized as IFRS revenues in 2022. For profitability, we expect an adjusted EBITDA margin of minus 29% to minus 20%, which translates in minus 35% to minus 25% in absolute terms.

To put the revenue guidance and the EBITDA guidance into perspective, I'll give you some additional color. The impact of the investment in our onsite business in the U.S. is in the order of magnitude -- and I'm talking IFRS revenues here, of EUR 10 million to EUR 15 million, which would have come on top of the guidance you see on the slide. The impact of EBITDA is roughly EUR 10 million. So this is a very conscious decision on our side to make this investment in 2022 as the European markets are very strong. Investing in our DACH market in the same order of magnitude like we did in 2021 in onsite is, therefore, also to target more repeat customers. As I mentioned, as they are 5x more profitable than targeting new customers. Again, a very conscious decision on our side. And we are monitoring both measures and both investments very closely and their respective returns as they are key to reach our profitability on a stand-alone basis. We will update our guidance for the impact of e-domizil in due course. However, you can expect a positive impact on top of what we show there in the low to mid-teens in terms of IFRS revenues, and positive EBITDA.

Before we go into Q&A, let me briefly comment on the current trading for Q1. As you know, it's the last day of the quarter. We have seen a strong start to the year as consumers want to travel again. In regards to addressing current predictive factors, when the war in Ukraine started, we saw a dip in bookings for the first weekend before it returned back to normal levels. While we do not expect to have a big direct impact from the war as both Ukraine and Russia are not important markets to us in the business sense, it might have an indirect impact in the case of higher energy costs and inflation. We will continue to monitor developments to understand and prepare for possible consequences. And as shown in 2020, when COVID hit, we can react very quickly and reduce costs to a minimum, if necessary.

But at this point in time, we look very positively into the future because the trends we see in Q1 so far, this growth is driven by Europe, in particular, the DACH and the Dutch market. As such, Q1 will close with the highest booking revenues on record ever even beating Q2 '21, which was our best quarter ever, based on a very strong on-site business and to deliver a year-on-year growth of around 35%.

Looking at IFRS revenues, we expect the growth of even more than 75% year-on-year. In general, we expect to return to more traditional seasonal patterns in terms of booking behavior with Europeans booking, in particular, their summer holidays earlier, while U.S. customers typically book their holidays later. However, what we also see is that, in particular, Europeans are already booking for spring holidays being Easter holidays being it's the Pentecost holidays. And that, again, gives us a lot of confidence that this will be a very good year for us. Please note again that all numbers and guidance are excluding any impact from e-domizil. We will update our guidance in due course.

That concludes our presentation, and let's go into Q&A.

[Operator]

The first question is from Silvia Cuneo of Deutsche Bank.

[Silvia Cuneo, analyst]

My first question is about the guidance. Although you are moving on from providing detailed guidance on our metrics, can you please talk a little bit more about the building blocks of the 2022 revenue range in terms of basket number of bookings and take rates? Just wondering what assumptions could bring you closer to the high end of the guidance?

Then the second question about the marketing costs. In 2021, you decreased the set of traffic from paid marketing, and that resulted in a lower cost per visit but overall marketing costs as a percentage of revenue increased like you discussed. So can you talk about when to expect scale benefits to come through from performance marketing? And what proportion of visits are now coming from the app. And then finally, just on your supply partners, you talked about the latest partners you ended with mostly on site. Just wondering if you can say a little bit more as to whether these were mostly OTAs, online property managers or home owners? And how should the number of partners evolve as you push Friday in the U.S.

[Steffen Schneider, executive]

A lot of questions. So let me start. And if I miss anything, I'm not skipping it. I maybe just didn't catch it. So let's start with the guidance. The guidance, the biggest building block will be our onsite business because as already mentioned, we will have -- we will see a relatively higher share of our European business. And within the European business, we see a higher share of our DACH business. And as you know, the DACH business is where we have made the biggest progress in terms of onsite and therefore, our onsite business will, like last year, be the biggest part, that we are even increasing that part significantly. The offsite will continue in Europe on a similar level in the U.S., it will maybe a little bit go down due to our investments into onsite. So there, we are expecting a strong growth in the onsite share of the U.S. business. But the -- it will come at an expense of the mentioned EUR 10 million to EUR 15 million revenues from the offsite.

Looking at our CPC business, we're expecting that to be, again, relatively strong. So based on the first month of this year, it continues to be on a very strong growth trajectory. And then the subscription and services business will also continue to grow on a similar level like last year and this brings you to the full year guidance.

In terms of marketing, we are continuing to spend on a regular basis. But in particular, and there we have, again, the investment into our onsite business where we will have quite a lot of traffic in order to support our onsite partners and to give them a really good start into the -- into working together. That is already working out really well. It is an investment, as we have mentioned. And we also will continue to invest in getting the people into our onsite app and our CRM system there, you can, again, similar to last year, expect that we are spending around EUR 10 million on this one.

Then the next question was the about partner. I think that we added. Okay.

[Patrick Andrae, executive]

Yes. So this is Patrick. So like the partners that we added, if I understood your question right, please correct if I'm wrong, you're asking what kind of type we are speaking of these 250 partners that we added there. And these -- there we are speaking of mainly property -- smaller property managers that we added.

[Operator]

The next question is from Volker Bosse of Baader Bank.

[Volker Bosse, analyst]

Thanks for providing all the detailed information so far. I would have 3 questions. And starting with your acquisitions e-domizil, congratulations, good timing to have it ready for the today's presentation. But however, just for understanding and background, has the inventory of e-domizil already been on HomeToGo? Or is it purely incremental supply, which you received here from e-domizil or was it partly already included in HomeToGo to get it into the year? How does it affect your number of properties on your website?

Second question is regarding your midterm guidance, '28,'29, EUR 1 billion booking revenue. You did not mention it in the presentation for any reason? And why did you decide to put out a '28, '29 target today? It's so far away and seeing the world is so full of uncertainties given the war, et cetera. Just to get your idea rationale of doing so? And why did you guide on booking revenues? I mean you are priced on IFRS revenues and the time of the bookings, perhaps to clarify here would be helpful.

And finally, the third question is, any updates on your business relationships to Airbnb?

[Patrick Andrae, executive]

Yes. Volker, thank you for your questions. The question around e-domizil. So e-domizil is one of our longest partners that we have on the platform. So like the inventory was already active on HomeToGo prior. So because we partner with them as a partner for a long time. But what is obviously an advantage is that they have relationships with certain partners that we don't have directly or didn't have directly prior, yes. So there will be some incrementality coming from that. And on top of that, for sure, they will benefit a lot from our technology platform that we will also like be using to help bolstering the individual business going forward, yes.

But the question in regards to the inventory, it was already prior on HomeToGo. But for sure, not all the bookings were delivered by HomeToGo for the inventory. Yes. And your question why we have put out, the -- basically the EUR 1 billion goal for booking revenues by 2028 and 2029 is a very easy one because we saw from what we have created so far with the company that we have the chance to get there by 2028 and 2029, and we want to make sure that internally and externally, people are focused on this goal. So you might have seen it also in the past with other companies, like Zalando was pulling that out for their overall target. And you see that also what comes with the booking revenues of EUR 1 billion is roughly a GBV of EUR 8 billion to EUR 10 billion, and the market share of the overall accommodation market of 0.5%.

So this is why we think it's important to know where we -- for the market where we are going and where we are aiming not only quarter-to-quarter or year-over-year, but as a long-term or mid- to long-term trajectory.

And to your last question around the business relationship to Airbnb, obviously, we cannot comment on these things at this point in time. But as you see, currently, there is no Airbnb inventory on our platform that is delivered from Airbnb to us. And on the other side, Airbnb's demand channel partner of our Shopify like solution for homeowners. So where inventory and up-to-date data besides the supplies being channeled to Airbnb on a more or less B2B relationship there with our software services. But on the consumer platform, Airbnb's inventory is currently not to be found.

[Steffen Schneider, executive]

Your last question -- or the third question on the booking revenues. That is -- we are expecting booking revenues in the order of EUR 145 million to EUR 150 million in 2022. And the reason why we have only guided officially for IFRS and EBITDA -- our adjusted EBITDA is that since we knew that we have already -- or are expecting to have the acquisition announced today, we wanted to limit the amount of guidance to the necessary amount. And then we'll come back with revised guidance once we have a better view on e-domizil and the impact for the remaining of this year.

[Operator]

The next question is from Wolfgang Specht of Berenberg.

[Wolfgang Specht, analyst]

3 additional ones from my side. First, on the cancellation rate you showed around 20% for the full year, which has gone down to around 16% for Q4. Is this more a seasonal pattern? Or do you expect the cancellation rate to moderate also in 2022.

Next question is on the inventory, which was about 15 million stated for October in your report. Can you give us an idea how the year-end figure was? And do you expect, let's say, a sizable decline based on your onsite push in the U.S. market, which maybe scared away some of your offsite partners?

And the last question is on your cash balance. I can site the EUR 163 million, also the EUR 100 million parked in money funds. And I also found EUR 70 million loans. Are there any other, let's say, sizable debt positions I've also got to take into consideration for looking at your, let's say, net cash balance? Or is it there?

[Steffen Schneider, executive]

Yes. Wolfgang, it's Steffen. So on your first question on the cancellation rate. Yes, in Q4, the cancellation rate developed really nicely. And that's also, as you recall, we were very conservative when we provided our initial flash numbers in January, January 12. And then had to -- once the check-ins were all processed, et cetera, we could see that the cancellation rate actually improved significantly. We also see this, this year. So exactly what we were expecting that over time, people get used to COVID and the cancellation rate will go back to normal levels. We are still not there in terms of on pre-COVID levels, but it's moving into the right direction.

Second question on the inventory, this number is like constantly going up and down, as mentioned before. We always keep ourselves a buffer so that we don't have to adjust the inventory number on a constant basis. But the number we had by the end of the year was significantly higher than the 15 million. And even today, we are significantly higher than the 15 million, and we don't expect any issues from our offsite partners. We will continue to deliver them good traffic. As you can also see in terms of our CPC business, so they highly value that. And when we say we invest more towards onsite, then it is really that we could make more immediate revenues if we would shift it more towards offsite However, as we have seen in the DACH region, as we have seen in the rest of Europe, the algorithm always needs to learn a little bit. And this comes with some I would call it, inefficiencies. Our ranking tier would call it differently. And that's why we say we do this investment.

The last question, looking at the cash balance, we -- I assume that you were in the wrong column because the EUR 70 million are the old convertible loans, which all have been converted as part of the business combination. So as of now, we only have very limited financial debt on our balance sheet, which is mainly 1 KFW loan we took out in 2020 and took the money in early 2021, which is still around EUR 8.5 million. Then there's an old loan by Deutsche Bank by EUR 3 million and then a few more load credit lines in our southern European brands. But that's all the kind of financial debt we have at the moment and the -- all the convertibles have been converted to equity as part of the business combination.

[Operator]

[Operator Instructions] As there are no further questions. I hand back to the speakers.

[Patrick Andrae, executive]

Yes. We are concluding. Thank you, everyone, for joining our call for the full year. And thank you for all the questions. Happy to see you next time in our quarter 1 numbers call. And yes, thank you. Have a good day. Bye.

[Steffen Schneider, executive]

Thank you. Bye.