BKNG - Earnings call transcript Q3 2019

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Operator

Welcome to Booking Holdings Third Quarter 2019 Conference Call. Booking Holdings would like to remind everyone that this call may contain forward-looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals or expectations and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements.

Safe factors materially cause the earnings from please and to of results Holdings' forward-looking Commission. press list the Exchange filings refer differ at with as to those the most release a as that Booking Booking Booking could actual statements, end well For of statements Holdings' Holding's recent Harbor described Securities in the

of whether new obligation by future to undertakes update as law, a forward-looking any required otherwise. result Unless or no statements, information, events Booking publicly Holdings

statistical A website, release, copy Investors of together with Booking Holdings is Holdings' www.bookingholdings.com. earnings an press accompanying available financial supplement, Booking For the in section of and

gentlemen. Holdings' now, for David Glenn this like afternoon, ahead, and introduce And I'd Booking speakers Fogel Go to Goulden.

Glenn Fogel

to third billion of our our in booked as XX% high I'm year-over-year And guidance our $XXX Holdings and almost by afternoon exceeded million the range. you. year conference quarter which this quarter David quarter Goulden. of a executed end Thank CFO, or we room up of rights, the joined welcome is We call. busiest well Booking a

which approximately We're approximately over on We billion year-over-year revenue $X in basis. been room and growth a X% of are and EBITDA, currency consistent X% produced this constant billion in increases night pleased reasonably that year. $X.X has respectively

a us. we still note in front scale, we opportunity a While are have means we share very market believe we these marketplace, financial that, which against we opportunity, substantial global that size and of results of meaningful have show large the travel small

solid the to growth And room invest and to and growth while that we better-than-expected quality we return remain in quarter if will to paid on disciplined though channels, we of only slower paid by we will traffic ways associated continue that the investment. drive growth like the find through look in driven channels. our I am our channel, pleased I this growth, note delivered performances our witness direct night

We our market firmly payments to our websites. properties in deliver against customer core remain we key the and platform accommodations acquisition, of our as selection through in extending work of in goal our on initiatives execution improving mode lead merchandising,

growth We customer demand expect existing drive channels. incremental these to our conversion from and improve initiatives

a execute trip our Booking.com time. improve very and its recently experience to continued long-term strategy in launch the in over days offering to of still be enhancements will We create a European and will building offering flight what against countries. we customer product make we better to with continue connected launching certain is early the The believe

trip potential will vision excited active supplier remain large as merchandise create new is our opportunity And We base travel result loyalty robust an believe to very the engagement for greater our of in ecosystem for into that Booking.com more Booking.com's offerings. and to has base. connected it the trip tremendous long-term connected is We a customer being services. translated large their

APAC will conjunction also initially Agoda believe existing In offering. accommodations on is that flight product which select a Priceline.com, we its launched the countries in complement with has markets, focused

development deep brands cooperation introducing to look demonstrates are leverage areas of across to this able travel collaboration other inter-brand how I our across of our We the forward product, to am company proud of services. new our the future. which build expertise we in

customers. is also partnership benefits now excited showing Grab with our announce our are We tangible to to

in a these experience, Booking.com is users fleet app countries One largest to the customers in language and traveling providing Southeast goals the eight drivers across of to currency the frictionless Asia, our give access of removing partnership barriers. of countries

by to the early markets be the Grab the Indonesia expanding XXXX. remaining Thailand Right this by now, Singapore, Booking.com and app and to year will users can in of services end service and access we

through bookings is Grab partnership to and hotel to app both Booking.com. the using point note Grab Another introduced connection its about own previously Agoda a

our In professional on management recently to of and Booking.com and simplify a for content of the supply Booking.com more partners new Booking.com's its their series day-to-day customers richer short-term business, rental market continues partners. designed build enhancements platform. announced help specifically both effectively to tools alternative accommodations and product properties

In terms count, the improving of of stand now continues total listings million area. X.X alternative accommodation our our and listings goal XX. this to as A variety in be at of September listings Booking.com's both over key quality

growth business, encouraged progress maintaining with in solid while continue profitability. outpacing and the witness accommodations overall We alternative are business to our

In world. believe results the in global regards is mixed but to some market, travel we overall see the throughout geographies it generally healthy,

Europe is still we have of growth, somewhat the seen most throughout what impacted remains by but sluggish which GDP stable, is consistent with year.

to Southeast nicely. continues grow Asia

Kong, markets like rate China, overall pressure to events. certain placing particularly are due Hong growth our and on However, macro

to impacted the travel United has been a International by dollar. States negatively strong

do navigate this us helped shown, will Like to has our and year tricky scale so we future. the though, we in a has continue remain environment confident that global macro

growth our the pleased am third of and we we In the confident will now conclusion, with the in very company. support performance I long-term prospects remain making the efforts that quarter are

want to work customers their quarter, supplier the around both the our third to hard providing partners unparalleled thank dedication I and during busy world. our for over and service XX,XXX employees

financial Goulden, over detailed the David turn now our will call for to review. the I CFO,

David Goulden

fourth be unless relative and review third then period quarter Thank to And for our reconciliation our comparable growth can GAAP afternoon. the All results in otherwise earnings to our you, the indicated. Information operating guidance I'll prior-year regarding rates for quarter. found Glenn. the release. discuss good are

for results the Now our quarter. for

range. of quarter exceeded room for high-end our booked Our night growth XX% of guidance the the

our remains Our that exceed this room environment cautious. macro continued a to quarter night despite in expectations growth Europe

the approximately growth and exceeded in rest our night line QX. Europe for world rates Room with in expectations grew also of the

mix on than was accommodations, of down X% decline basis, such as a for as larger rates US, the to daily and growing, key ADR about several QX year-on-year faster Average markets. guidance constant Kong Hong lower or The markets ADR increased were decline impacted currency as about decreases by which within an in X.X%. year-over-year a was Japan our in rates down ADRs, well

half the the in key including influenced X% a second and ADRs second dollar. the travel less year The by factors, lapping corridor seeing issues, strength in political due trade number of in the ADRs is well we're last a of increase in macroeconomic-driven of half about as growth international of and pressure in year on to US by the as

growth points changes in similar a rates in exchange in EPS last impacted and percentage dollars rates by QX X gross the Changes by approximately QX in foreign growth rates revenue, We versus year. estimate EBITDA bookings, reduced US amount. FX

X% dollars coming basis, by high-end X% constant about guidance expressed above currency and range. grew on US a QX gross bookings grew by in the our in of

dollars US by about for constant X% Advertising XX% KAYAK quarter and revenue the QX. a and grew comprised revenue, which other on third in Consolidated currency OpenTable, $X by X% billion basis. and of is grew was and in mainly

was on a QX and basis. billion, reported the for about constant a EBITDA basis guidance our and Adjusted $X.X high-end range X% year-over-year X% of exceeded which currency on was up

than nights channel, declined marketing an was which year-over-year, about Performance driven continued grow helped the faster the XXX direct This in X% mix in expense which by our basis room from quarter. drive increased of points to leverage channels. paid leverage

customers time, continue rationally to direct in to channel to and see maintain our channels. channels over an efficient spend marketing approach performance we'll to we'll as these While keep we acquire grow our working way

quarter, of in on decline last a spent about QX points XX brand We XX% marketing year, million represented versus $XXX the which contributing of basis leverage.

half As call second brand this of on in refining spend our in and the we our focusing QX mentioned earnings are August, we year.

basis points and Sales expense to last grew other contributed the deleverage, about of at primarily due versus growth our QX platform of Booking.com. of XX% year payment XX and

to in quarter payment-related certain Sales than in slower growth grew at and XX% lower gross other bookings merchant expenses. the due

came forecast and of our a in deleverage slightly in expense Personnel quarter. small lower contributed amount the than

G&A on G&A Note increased transaction which in in a last non-GAAP a the negatively excluded GAAP travel Finally, year non-GAAP $XX XX% year. expenses million charge, QX results expenses tax basis. prior year-over-year impacted that

expenses deleverage additional as from basis by $XX an taxes well services XXX million of points French impact from digital tax, quarter, in contributed travel driven $XX transaction the periods. to a as the prior million G&A related year-to-date about Non-GAAP

was non-GAAP EPS currency, quarter. Our versus $XX.XX, prior for the about grew Adjusted XX% non-GAAP year. EPS up in XX% the

a in QX clarified non-GAAP is rate a lower tax the XX.X% year. to of which QX, last year act reflects which prior in income was due tax of than net provision Non-GAAP of a

Our QX XX% in benefited lower share count EPS the in quarter.

operating increased a XX QX by GAAP income increased X% On basis year. margin last basis, compared GAAP points by operating to and

per to amounted income or from QX net GAAP billion share, up $XX.XX XXXX. $X.XX QX XX%

million. Our GAAP income net includes QX $XX

remeasurement from and excluded investments of on unrealized losses Meituan our these on million pre-tax $XX Our losses our gains in and gains Ctrip remeasurement FX results. our non-GAAP eurobonds. We and unrealized equity

adjustments due that excluded non-GAAP to XX.X% of quarter, the rate mentioned from XXXX made that in tax We related QX rates. from decreased were year our had a tax and beneficial in act prior tax GAAP I impacted the which the results factors for non-GAAP XX.X% to from the

to In QX, which of last operating compared generated QX we cash X% $X.X decreased year. flow, billion

of impact decreased flow due higher effects merchant cash the was concentration X% and to for this free seasonal $X.X Our the mix due quarter year, check-ins. high of revenues compared prior a the in third quarter from by the has which billion, to mainly a to

modest During merchant we of growth a be expect the cash the of of our flow. year, the will course business driver positive

our our at $XX stock billion bringing repurchase QX, of billion $X.X end under billion purchased authorization to the in the $XX.X remaining the of amount quarter. about We

to to We market the conditions. stable authorization business continue two to three in this next and assuming complete expect years,

and $XX.X in ended outstanding We with cash the debt. and billion quarter billion $X.X investments of

note EBITDA growth investments expect to with a percentage year tracking for the what the said by year last that to line we these our turning and for our still returns few points. are we full quarter in the Before we impact guidance, growth from investments

QX turn our to now Let's attention guidance.

for rates to by X.X EBITDA non-GAAP rates revenue, exchange percentage gross points. EPS year-over-year growth approximately Foreign bookings, negatively expected are and impact

QX to use rate of our dollar We $X.XX euro exchange when guidance. setting a

Our QX anticipate the environments. outlook macro does change not in any

looking the Based forecast currency are QX. are and dollars. X% at X% on bookings booked basis and constant XXX other to a to X% on we gross room grow in by in US forecasting We all nights X% grow to points factors, where we less in quarter basis to about

of ADRs ADRs. factors Asia constant occurring will QX down company number assumes these and seasonally larger same impacted are for the in that in factors by a QX QX. quarter Asia A X%, the Our driven forecast be currency is about

X% basis to dollars. and basis by XXX We currency to forecast a X% QX US in about points less on constant revenue be up

is QX currency adjusted $X.XXX basis. which flat approximately on range $X.XX EBITDA is year-on-year between billion, expected billion to a and constant

line on focus acquiring and continued are lower high volumes in performance leverage traffic. our continued in channels QX, reflecting expense the quality from We marketing forecasting paid

We spend in brand leverage expect of to see continued QX.

the of we to grow the half we've reduced year. full still second year, our spending Although spend brand for in the our brand expect

expect in growth EBITDA personnel than expenses accruals bonus lower percentage year-end QX. points several unexpected last the We quarter of we in experienced to reduce to growth by reversal due

Sales and is other slower to expense merchant faster bookings growth, than expected but overall revenue growth. than grow

constant approximately for growth for QX EPS QX forecasting in X% $XX.XX are is $XX by currency, non-GAAP our a X%. We decrease constant low line XX%, Normalizing for we EPS about even. year-over-year implies growth. approximately estimate full-year to QX to non-GAAP This rate EPS of double-digit of expectation which to full-year with range currency non-GAAP

was that XXXX act an forecast higher. tax EPS to QX from XX%, approximately QX than year one-time is If Our last related regulatory the QX XXXX. our issued be of one-time approximately about to the benefit growth income due estimated X% last of of exclude by adjustment the will year, quarter which includes QX in QX rate of higher clarified we non-GAAP million a guidance EPS provision significantly for in in $XX tax

with tax expect full-year rate our compared year. XX% be We XX.X% approximately last non-GAAP to

shares, non-GAAP diluted $XX.XX QX. below last a GAAP share X% We year. for million of forecast guidance count QX approximately EPS EPS between QX assumes of Our is XX.X and fully $XX.XX which

guidance for Our of a assumes XX%. GAAP QX approximately EPS tax rate

and now the and our place fluctuations have EBITDA net currency from bookings versus do from end fourth dollar quarter, currencies revenue the shield to our contracts fluctuations. substantially protect any quarter profit not We in further the the income hedges in but or impact of the operating gross of between hedge foreign

your take now We'll questions.

Operator

Instructions]. [Operator

Your the of first Mahaney from of comes Markets. Capital Mark line question RBC

Your line is open.

Mark Mahaney

about this many diversify you has Could less trying that? about pressures And paid years. talk that how you do to become for do you seeing and as marketing a Could Two SEO questions Glenn, whether source talked you in please. about is I you're you looked of that's talk channels whether to them. thanks. channels, amongst the something any viable know company for traffic? then, Great,

there do Just Thanks are how lot. to a many options in order that?

Glenn Fogel

but in regarding some some small SEO, modest saw create us. we channel that channel a did headwinds Well, for pressure, Mark. the SEO Hi, it's

recall question, Your something. second wasn't saying quite I don't I following.

that So, say could you again?

Mark Mahaney

paid I would in think, little than early want coming on, less or you more it leads talked slowly about maybe a were ideal. you

for of find channels is faster while, a you've talk you been do you to Can paid – those? leads. paid for I high-quality think something find How that, growth ability this faster your paid looking about leads? just

Glenn Fogel

Yeah.

where Okay, talked coming channels that's has we about that on time. I figured been time I there what you're saying. you're the some been Actually, see going of deceleration know. said a from. for what paid I this long We've – for a out

we're more doing, ROIs. things their importantly terms that we'd going see – want try always of to is no improve find find and we paid from and when only channels. more in conversion what can our lots being maintain My to it increase obviously, to to you the to matter the channels, of those particularly customers trying There's, do. primary like I obviously we're point discipline thing that work do to like we'd Now, right

where will also looking And out we are influence paid are people know. in money do what the other among we different and markets, want what to shift you different the And do. ways dynamic there channels. as things These

channels. strategy now seen But and paid we're with So, it's game so our where are we going bit always right results of the pleased a on. far with a you've

Mark Mahaney

Okay. Thanks, Glenn.

Operator

line of Barclays Mathivanan of the Your Deepak Capital. comes from question next

line is Your open.

Deepak Mathivanan

Thanks taking question. Great. the for

to So, appear sluggish. night And points, driving commentary night sources, expectations? the counter macro seem room versus room Is a cyclicality same. execution your Europe is you the first, to from the growth aspect you if kind also, data quarter? in The would look at what suppliers least outperformance industry your it during to at or just that's of the better benefiting be there be third-party growth the the attribute

then, you like the to Thank Are in doing there partnership-based would similar How really very second a is some the more developed of off good partnership opportunities question, the to And that? and look sounds you replicate planning you that Grab with start well. is much. strategies markets? are at

Glenn Fogel

Sure.

we So, use the healthy. yet. general see in I – area cyclicality travel mentioned the industry in of beginning don't the the think we're around We generally counter the world I at that word

So, stimulate some area of then counter-cyclicality. in of would we're recession an not type that

a I that XX,XXX your to So, well. executing other I'd point execution, very good think of are like and employees to just good ascribe to our a give of who execution shout-out very, lot

regards there. we're agree, there. I'm It's, going way. still, but happening like I Grab the with right partnership, pleased the small doing growing what's it's very In I what to and obviously,

seamless, provide other the ground time. one frictionless I operates able same as of a where And in that about at and Didi. know, time And bring you places with for our a being China Didi in to to customers made sense over solution the we're out we deal going similarly mentioned, transportation

And the other all same offerings Grab the with able way, very, large to things to offer base to we're home of our Didi going also, hotel expose being other the accommodation, that accommodations, very the customer that has. is

that's and that of out the wants going of and that one I'm is they're course, world area. in with or with strategic in progress other go are affiliate what what to out replicate teams and other doing making pleased players partnership parts the And, do and our

Deepak Mathivanan

Okay. Thanks, Glenn.

Operator

Kopelman of line the comes question and from Company. of Cowen next Your Kevin

open. is line Your

Kevin Kopelman

Thanks lot. a Great.

nice line. into on growth nights kind few seems been it rate stable of top So, – last like and you've a recently quarters, settling you've

a into investments non-ad you as that thinking can in move you about expenses tell how Thanks. with you're us operating So, as backdrop, forward XXXX?

Glenn Fogel

do provide the importance We've shareholders. line discipline our future, talked we're bottom that's an We're going continue business, our way to help the it. that, maintaining between we out in amount the going the having to that invest just time to of grow the appropriate at past about to to same a return money do and balance for to grow the

many the the the that's the customers that long a to how, we're thing and lower make for winner work the back differentiator, experience, maintain because continue some a about they talked we things to to will the These trip improve see continuing we connected and loyalty, about that to talked the come better on going the run, And of us, money we've are the that that we amount advertising to we all lot spend in build. balance. We've spend. want that of on have times things will see are

Kevin Kopelman

then, Mark's SEO. And Glenn. on follow-up about a Thanks, just Okay. quick question

You a of safe that? Is you. for your Can finer channel single-digit it revenue? overall a percentage assume point to that small put a us is mentioned you it's Thanks. help SEO on

Glenn Fogel

I'm going with to qualitative my think I stick Small. term.

Kevin Kopelman

Thanks, Glenn. All right.

Operator

next Walmsley Lloyd of line Your question comes from Bank. of the Deutsche

is line Your open.

Lloyd Walmsley

Two if can. Great, I thanks.

First, have in companies Glenn, in of over Asia. investments made you all couple rideshare

in leveraging is You've Any use of sense in sale. making make some the got it There public do in investments Would more space? rideshare of rideshare on good a interest more space? history capital to your M&A. the assets to some

payment Can of kind payment And a then, you merchant basically the for I tailwind becoming payments side? the over a how And eventually that will as broadly, years and you next the you be revenue flow what payments higher cost? said then, the EBITDA then all charge through from your the few as the and to you profit scales do to rhythm kind Is see business just secondly, more have drag effective offsetting start on it get on of center talk will about it's neutral to shifted think kind that next P&L? side, of year.

Glenn Fogel

don't transactions familiar M&A think potential I first Well, in we regards to publicly. that the discuss all we're question,

I'll to talk I'm numbers be So, that turn one. in will on what to going work to why flows and pass about have how pass over the And funds be. to the Dave they'll

David Goulden

the both as the tool, are and both building able platform a the and as of Yeah. but side, aspects revenue know, revenue payment equation, optimize Lloyd, then be as the to stream of you different payment been and And in there to there that discussed, There on also are this as multiple mechanics multiple moving marketing to payment using sides costs. we've cost we've are essentially, of help all builds. parts. business many the aspects

compared this underlying EBITDA platform to it contributor year as out, to expect And we a we more product. revenue So, next from we refine as generate the structure we as also year, roll come to the do the sides, and be the will higher cost of payments recovery efficiency through better to growth. continue both scale, both

we view bit long don't into go we'll we be of want also of XX% percentage quantify to from center, has probably profit but give can business the continuing we as a it growth, As we said, you we term, not how payments to a a year, nicely certainly about as to next our increase Booking.com progressed right approximately And now. but color more as that only the XXXX. that but in to contributor EBITDA it's mix, little talked a

Operator

Khan comes question Your Naved of from the of SunTrust. next the line

Your open. line is

Naved Khan

lot. Yeah. Thanks a

a couple. Just

global drag in travel. think, in growth. that I they basically unrest a business yours, Glenn, parts were switch people So, destinations Asia some Hong a think had and passing, that on travel to the having restrictions maybe like maybe would the you I want if mentioned of Kong

that So, as drag? still on seeing are a out? whole, that How you play does the

connected the kind on the do I How from partners one in on KAYAK side, two they how partners. terms go you? Europe bookings or guess in of air testing experience to with this with of market you're different then, And these

Glenn Fogel

be So, a to, get you're will will don't do that absolutely that we travel correct like particular business. when place portion the some get to that in first place shift benefit global of a want one certain becomes terms there company and a one, to another we ours, will area people

they specific didn't a said, just travel. going that that it. and being of to want That's They that to to not had wanted unfortunately percentage do what just travel. will travel to not reason they do another to That now decided they region business they're or

which a is Q even that are there some I'll areas the we though So, last point are drag out we mentioned of on. the And still in global. going

a drag. places and other what's all Kong to was the is outbound where it business on also there like We a there. of we've Hong that. going US a the ago. years economy. And is in down That on China Certainly, drag still The TV from couple that had is are good on seen

benefits would we So, the a global do problems. these there while without we no enjoy is of types that of business, better doubt

their different a KAYAK called Gotogate. a other past. company experimenting regards air question integrated called to doing we to with ways. seamless a was Etraveli And the Europe, one – of had relationship ways that out more in accomplished, Etraveli of your product. offering in lots and was been We a have fulsome In much about more more we now the click air part is have with type of true

doing us and [ph] true with it difference having the offering The a integrated as between matter trip. actually enable a connected OTA KAYAK

the doing it talk seamless all to we things be You the some data able from about that the offering. all we like the that offer booking them actual is – data, all and see conversion, person – get was holistic to to

on the ground going is like our the efficiently. one recent, a I'd I transportation because to recently out, as cars like relatively would in and we've you that – or seen much that but So, rental business. things of the car is related of just I something types can is air like not trip to see rental is one product what's this with this And other of benefits connected offer more separate, point

the with Well, more car are rental, we've at we our summary now of offering see the that you'll end accommodations much quarter, and our had due statistical connected at rental if customers. this that partially release, Booking.com connected recent car nice in a trip. that And that the to look you is uptick

where come and really see we instances another one those fruition that's of So, what trip the connected beginning to see I to can do.

Naved Khan

guys. Thanks, great. That's

Operator

of Your of Brian next Morgan Nowak from line comes Stanley. the question

Your line is open.

Brian Nowak

for questions. Glenn. have taking Thanks I two. my Hey,

the you. So, bigger a of first sort to picture one, question

talked witnessing slower paid how little of sort in about you're You for now. channels growth a while

at think have data, why Are visibility fewer market, what And a you in is why into cause you coming you're that's the happening? that people seeing driving do you What it much such so seeing bid is online look good do you happening? for? reacceleration think to a deceleration Is in this? over guys You and clicks do time? you think could channels paid because

And then, now night a help is sort room to that the Thanks. one think how contribution on to its update how perspective? alternative of from on second the growth about business big business. Any and accommodation or

Glenn Fogel

So, sweet areas, online have of those years of channels, we particularly much lot area already I – people larger talking online went these Europe there paid think channels. people there. really paid is the that developed ago, went number some the about a A other they people our as certainly, are spot, in were to who jumped people and of and

to going but areas people they traditional our go areas. world of start online, not some perhaps going to where may of channel paid you Now, other are the

opportunity lot for is operate give not example. I'll We for you a China long does run. perfect a about Google great us in the talk a China.

got way find them. get we've to those another people to buy to all So, new online travel, coming

places So, are that that. example. And there other would like an be

reason for that's it. primary probably So, the I think

areas. We've not customers a is know to the it's – to things service talked that this the the will end, a or us let going to important of the one having It's lot know things in come other in full to for Google start past. this one Whether most That's in very reaccelerate, us important. in what's China, is we about that me think directly. if of get I

we not future of For will people to create directly. our dependent other to second will What we service – so on good wonderful, be naturally a us come be back so us dependent own And on was just that will is your sources is to question? not have as that traffic. other

Brian Nowak

Alternative accommodation.

help think night to to quarter? the – a or on any from perspective about how contribution sizing of room Sort growth its in

Glenn Fogel

continue about grows about we we're pleased our business it faster hotel talk Well, to than core and that. how

of In terms with some updating data of there estimates range. terms And give the overall I'll lot world. the the couple is data not the of lowest a we of And actual sizing, is right pretty quarters you estimates gave a around wide a that the highest people We're swing people the industry, now. in say the who ago. from to

come resources money it's area which attempt where to it. business even wouldn't big we up I a number. time, to So, the the for try us and with We and for that's or and know future devote one and is it's know true exact important we an why that's to continue

Brian Nowak

Great. Glenn. Thanks,

Operator

Suisse. from comes Credit Stephen Ju of line the question Your of next

Your line open. is

Stephen Ju

you. Thank

a been are frictions online any can time So, may down coming region, regards there rate it can seems You've Are environment in Agoda? see e-commerce may about Glenn, the all in you conceivably like connectivity, Asia operating adoption of should serve which constraints there region? payment adoption tailwinds. that little around as some you how that I'm be slow of and wondering the to if changing, the elaborate as the in online especially of bit you, travel for it now. And Southeast structural

informing decision how to, ticket I And what buy a be packaged products may air product? and to is secondarily, guess, your hotels there behave. more propensity which consumers the Is Thanks. separately, versus in greater of wondering invest there just an intermodal

Glenn Fogel

general believe, growth. projections, to ways the of there. business both are. And I time to that And to you some the and opportunities long expect Airbus very – XX-year for perhaps. in us one and good just even further they say the be is continue is look number at that of Boeing one very, would of can one delivered going for they look out together detailed to that put And planes are I at very So, Asia our a build have

could in things it you in all of is industry to the the world, going region. show is one. part that built be travel number do way growth airports And look that Another the those to being of a continue at

ways competitive What different think Also that different very, and skipping the some It's important. on online is just I Vietnam. and that is in coming different people a in that's very happening buy Asia important. are different with Everything would that phone entirely. But desktop Two, we're there world It in one very, Asia, people many a is interesting, than, let's that at. is price say, of happens Japan lived I And very term. are what's very very there somewhat – who of say generic and is are look all price. the this we similarities countries. terms is is in that familiar out obviously, in

and The are there next prevalent in terms going are thing very is the super of apps busy. try get important how to that you're

to people people you're the apps, to or each say If then many not price see – super lowest actually price one. download numerous go do effective price but one, you're that go part it's just disadvantage. because you of compare at different who would I different not find apps but a most also do travel apps that. way to Not is, out efficient what through the the and

would going add to to These else – I do you things continue David, say we're you David, anything something it's to are anything? do. really And want important. that

David Goulden

is is add factor see more that's function currencies, travel in I'd particularly you whilst methods is of transaction happening, more the elsewhere. multiple the world, to happening view that's thing are in prevalent see that currencies, it alternative of a than payment ability Asia payment certainly only that, The Asia. around pay-in, pay-out point different And them in methods a in the you alternative in Yeah. for pay-in something

Glenn Fogel

Absolutely our the else. credit the to one it's different able every People use if people payment correct. don't areas use used go customers to in we to of we developed those. using them, because And important developing world want they'll those. are using in somewhere all worlds be have and products use that single cards, They very are

Stephen Ju

Thank you.

Operator

Bank of Post the line from comes of Justin America. question next Your of

Your open. line is

Justin Post

of the looks ad A you. pretty leverage It in quarter. Thank couple questions. good like

you as traffic need you do spend campaign to and as ramp the direct drive the maybe up situation about brand as to feel look again? forward how ability far your Just advertising and

there tell Thank And then, in wondering really to Are events very or growth how something areas a Just about ADRs, that think in an and QX. headwind that you. is would inflection for could XXXX. on rebound? and that obviously, second ADR temporary showed this any you

Glenn Fogel

about So, advertising. you about ADRs. can the Dave, talk I'll talk

to So, of better. in last be talked and I've doing like I this quarter, would in advertising, about us terms brand the

not to the are money. as don't the I've way with we going the until our going spending see them, thought We're year shareholders' to would may if the blindly. said, We're beginning at We spend I to of and have. going be results And it going careful not spend much we have right. we're always But I want to test always we learn. not get we're as

not great It's okay. being as That would are. we where it's I like disappointed little be. a said, as just to terrible. not It's it I'm So,

TV achieve I creative It's different we producing brand going is And and at for him there just to am of He and marketing. a video. one working we results Booking.com. will terms way to And in up good brand am better campaigns better forward. has for marketing. things this a the months. with all It's I looking our brand does campaign CMO few a new greater pleased come that forward doing very with I'm of closely that that in a marketing brand not looking to only been that have very forward

David Goulden

I'll Yeah, remarks, there a factors. a my ADRs more with couple number going I a of mentioned for on more because question. in what's give bit little are Thanks the a prepared bit but little give color you flavor. me Justin. on let you

would US, towards about due the the contributor it. I higher key ADR call currency, away half countries. out ADR to the So, about from a largest to constant And quarter, fourth And that Kong in of due we and a saw quarter, at of in third half decline; be decline the to piece ones is X%. mix lower is in When X% look decline Hong countries about expecting rates that, lower countries. Japan the about of we being that shift

give are out we are to and those trends. both flavor and just a I'll playing actually you to impacting Now, some and and macroeconomic of factors describe by what that mix, affected think is how underlying as rate they they're I'll relative

less example, for So, China the travel. US into is the in impacting inbound ADRs US with less international

less US less to due dollar. Europe from strong and into is So the expensive the travel

into ADRs occupancies into ADRs is from travel right Kong course, of the Japan in impacting down South US Korea Japan. travel that and Less considerably Hong driving both there. level. impacts is ADRs generally on And, factors So,

factors impacting mix, and They other don't – some Asia. markets, ADR markets impact – markets are mix also US to into They lower example, the travel only ADR Hong mentioned economic of I well. Southeast high with as these But more and Kong less in rate. for travel impact

we this of factors external it kind year is of that we're It's just business. together impacting we're is saw factors by against increases And are year. these ADRs. precise, underlying due to half of of remember second what unusual we last difficult all in exactly are our the seeing you where it quarters estimate So, to global driven there and about half also, two comparing but put be changes ADR in macro many and about half

about QX, that ADRs macro So, to QX, normalize and you for should kind in over in time. about factors about and external down together compare, are currency that of X% can you say, of attribute all adjusted our we constant that that put half X%

Justin Post

Great. David. Thank Thank you, you, Glenn.

Operator

Another the Anmuth Morgan. question of of from line Douglas J.P.

open. is line Your

Douglas Anmuth

changed early or to if about Glenn, of business? you're anything in I Thanks. ask of And geographies your opposed any as flight just for anything then, the how you're has learnings overall CEO group, wanted CEO as you're thinking if that the changed just the the some has Great. role around terms question. in? in the just newer Thanks Booking.com offerings to taking of the

Glenn Fogel

thing couple literally a so hope just to be in the It's about to the The I early. flight second one answer be future. that I'll but it yet, is more So, said able first. talk nothing about of – to is there

all CEO experience call. pointed And Booking.com, one I the our and and try management in both organization where with personalities Holdings was help of priceline.com regards In that of in all last and more role would and of company that better of the was, part I the and and of closer help we part Booking being talked what's knowing the what management of companies and efficiently strengths the are bringing out this a that to of some together teams, bring weaknesses the what things knowing to new originally because the be have my felt are I and of the and all work good needs about teams just opportunity in to the assets. us

I beginning to integrating bit beginning our it's cars And are a I'm working thing And created our there. the and And operation, car rental some pleased mentioned to and upticks that our into in suppliers together that seeing see and the remarks, for love things that say in prepared Booking.com our I nice where I the the right little way by to rental Agoda Priceline of now. flight shareholders come that out, way good business Agoda too. for out offering customers pointed we're my

on on. be have go requires of all new connected to trip and how cooperation services I come because mentioned of able the going assets our And we're to can use with together. more to this I up us

just like things OpenTable data I've all we things just eat site way a about And reservation offerings than why merchandise we a eat travel together, we much seamless because a these to not system, know they OpenTable was we at have to have much, from because eating site where from about better to always and traveling part, talked to what single reservation to a they're they place going terms reason not holistic of customer know system, from in because in these the find putting customers like to creating but experience home the restaurant at a every wanted by the to needs is home. the all site.

so who learning it are in Tel just be center a about. seeing continue better enjoy bring to a And excited – geniuses up and that of earlier to put fruition to to and that people differentiated able different with offerings. experts, than is AI experienced have going I'm thrilling. start That's it service a forward that the machine we're that will And different coming to back come has tonight being We ways create experience said is before. to will with push the about I whole to loyalty, more Aviv bunch what together

Douglas Anmuth

you. Thank Great.

Operator

Another question from the line UBS. of Eric of Sheridan

is Your line open.

Eric Sheridan

few on tonight. Maybe follow-ups Thanks much. of a about topics the you've so talked some the call on

are In some And And across of versus you side, avenues the traffic? think conversion? driving on app? traffic web investing about you where mobile, those terms of marketing of desktop ROI channels between seeing as versus highest investment driving versus differentiating the how within mobile you're

you're invest areas differentiators to over accommodations? it especially mechanism? that Is but And on be want of the what the do is out you next local going seeing sort below experiences Is what additional properties? drive about the end look when big as it traffic to shared only drive payments conversion of out see much talked depth are to side it more of year, of Or then, your where conversion, to might you inventory, so layer one that conversion higher years? we not you the couple the of Thanks guys. in layers this some

Glenn Fogel

the ROIs. not where of Well, marketing ones to and much in money disclose us giving which we're best putting going are the terms we're

understand you'll our do think that. reticence I to

number data, make how but looked actually not that to haven't detail sure conversion highest to gives is – terms done In can there's if defer more into here. the can having the I one at really conversion I improve a thing I'm great I'm to is probably of you the That's bet I'll that David? thing going conversion, better price. the much add, a want you that price. anything offer go a

David Goulden

to and quality companies. the site Conversion and They trust reviews. They is people fact. the all and of ones that continue of They to levers multi-faceted many choice. value quality is there testing key look as that a science they those Glenn and support. improve the just look for pull for Good look factor. look price are a for data No. goes conversion. a news all. products all behind of good for can look Obviously, have on said, And They that we there's are and the lot for

Glenn Fogel

advantages for is money of that lot they – that the want be who person you'll just before throw this I no think has really they do buy that there's has get up want, can cohort. that come just something figure a conversion. that's data going add is them what know And David afford and been about relevance offer you're whether even not, very personalization To to it that's and important being to traveler to said. result what the what or able again is but a something search lots a to things not in because you much the we of we what to trying if something best of of really a one of I'll large of very to out do player And one and scientists a and

help that because them was wanted that loyalty, any make we're to in sure the more and we way they probably get an data travel and a data have they create get we up to easy data. use higher of more happier. our we can other most back, It what customer have, that that's They're player to for the around, want how what they come than we But you offering that conversion. way builds

player because an what advantage an person it's know. of of trip, trip, present to small all what need. back that the to advantage portion connected what customer, data smaller we things supplier If our trip, leisure they and And more a things do the business the only any a it's their able them it's need. again, do in learn was. things individual just about ecosystem they they circling such over a travel in is see And If a we're they wanted then to more other to the the the

want. like what that of hotel So, reservations even advantage customer attractions air of sort what kind in the us they a to do of OTA has. of generally ground of doesn't largest make they the chain about want terms they That's or to sort and kind restaurant full want what or what their know like anything they transportation

Eric Sheridan

you. Thank Great.

Operator

from question Terry Another Goldman line the Heath of of Sachs.

Your line is open.

Heath Terry

spend that is guess a level on that question, the Glenn, a you answer philosophical It X% bit relates long little more this gave question. at I some this wasn't it of that you ad Great. to the brand the ago grew but company was quarter. But XX%. revenues growing

you're on path investment on it's to? XX% company could resources. clearly Given growth getting is what spending a the of you see generating buybacks, Are back the Are these the there Or that incremental that levels? not growth to at okay long-term you're question returns a and margins bad? you with

Glenn Fogel

the rapid. it's want of really run, is that it. we're loyalty services something gets very brand want to It's and to and Well, from the economies, go about us I use that don't can and people any those who part creating currently reason network that long of when accelerate. I that, the us, come you that come creating is that know the things do differential investments. people come that and these in that very, enough that. be create do if I this coming to better you'll marketing believe service keep of I'd important think create like in That's that thing to then number, better, system then us but uptick and And one the back we these we making to great can specific

all that and different our reach an able of breadth provide these the incredible have I'd prices, do to hopefully, all being of we able opportunity of an start types is be That's up suppliers this of experience, hand, different effect other services, creating better packages, creating will out being of on ecosystem, see. like in to this to, travel different better I offering it and so customers the suppliers, to so side then believe cranking flywheel and different to for ways, make them present merchandising much types it it to parts able to So, what that which this, this better opportunity in our value huge our creates again. demand

Heath Terry

this there what I a nearly just is seeing years. sales, areas on percentage anything in investment, you As And advertising? can in – the add sort particularly are of you incremental you've of think, in, brand spent the returns is on three the lowest Okay. of terms of

driving that push out called you've direct little tried bit traffic haven't important you I surprised that guess, I'm is, how a just to further? Given

Glenn Fogel

the against you our be. sure and philosophically money go and the for back fine. as campaigns – Philosophically, we good then. guess are that I'd just for return I to And spend. to And I as not again, money. They're to getting I'm make Well, I'll want we're asked like wasting brand that them

say saying good I disappointed, be. when I'm could they're not not they [indiscernible]. So, I'm I'm just as saying as

the of Some have seen we've been health metrics that brand good.

campaigns. with him. on and have excited had very forward He now the new These about CMO. future as Some that some good am though been the we're looking seeing in results old I'm to our not nothing working good. do are things with new I to

Heath Terry

Thanks, great. Okay, Glenn.

Operator

question Brian Next from of Wells the Fargo. line comes of Fitzgerald

Your line is open.

Brian Fitzgerald

Thanks, guys.

on Glenn, importance that the initiatives you paid. is focus a – direct or just questions, the highlighted talked traffic traffic quality importance you parse want runway against faster on you direct your Thank differently. and you than much the David, of And, You assess of traffic. times but you. and leverage these into little How I talked you? maybe a you're do you to of the the continued number the execute to call, magnitude more to exercising How have out the traffic to getting direct direct growing would and/or there? feel

David Goulden

has just terms our clear that, we've recap, while, everybody and over for I – Brian, data traffic but continued in of that point. quantification, increase a to direct knows bookings been just us, think XX% been to has continues of from

for will there. quarter. performance I – have and Glenn think don't new move the what then, to a think sizing we build, continues and conversion better for albeit we point growing a and flywheel, the and that's of So, us a slowly, more When mix. channels, said, like view them We be customers go, that's we capital we customers capture And the of that customers to a course, see can the more there combination opportunities, each way both. will better – repeat said, see lean and we it customers. very into are where where we think we we efficient nicely is always of the the those into be think growth from as we from direct as it's performance-led

already operates, reiterate points the lot give to now really there's we've made. other you that's new way the So, business of not but than a the data that

Brian Fitzgerald

David. you, Thank Great.

Operator

Next question line of comes from Kelly of Oppenheimer. the Jed

open. Your line is

Jed Kelly

taking Thanks Great. question. my for

you. – little has more of a then, a the Just your brand for campaign by getting on and Thank on the to TripAdvisor? one. that in side help would In little owner Ctrip sort the bringing investing view commentary more And friction do your in or US, that that how you of that's inventory opportunity over US? any or

Glenn Fogel

fully – in It's work come terms and and that a we've get who to in slowly we that. less competitive to area are That's in the have it And we're we people have have where source we on. that's building stay. going of past talked under people an indexed property continue how So, to We ways make we out. type think inventory we of of US. bring against burdensome on on And place the people add that about of owner try we're a single to came it to want the to need a do. inventory tackling. different lot Obviously, we to something and blocking the to site know

can and I as best there. grow the inventory It inventory. say to continue add website type to the of into that's continues we that the So,

partnership And ourselves. sell happy Ctrip our regards continue and good partnerships that money we we're have hotels saw deal we we a the that. make to they create and and Ctrip we about with announced, to In

big player, a We we Didi, about player. New I Meituan, business said agreement is an relationship have have earlier, as put have in and good another an which with investment as is into talked we relationship also, down have we too competitor them you And we've Ctrip's invested Chinese APAC and though, which and we good and with we with another know, Zealand. Serko, – in Grab, a

those continue partnerships. we investments make So, of and to kind

position. competitors the obligation And thinking That the done, their about who our or is those is details to shareholders. the any their deal It be of don't what surprising deals, I for exactly not cetera. other wants space business try have but that improve I and begrudge no type improve what their would is. people doing And of anybody that's own et to they've about suppose I in corporation, also

the really specifics. I comment can't So, on

Jed Kelly

Thank you.

Operator

question last the Mizuho James Securities. of line of comes Your from Lee

open. is line Your

James Lee

the is what you point? here this any relative total transition and on coverage now can there current to model the is market Glenn, merchant to at give us way an your update business

this maybe hotel And seeing you also expect you're help understand do soon? us to US partners And which regions model adopt success?

resilient you given in to is model the slowdown be Thanks. the more current giving to business help you this control during the curious, the market, And just environment? price

Glenn Fogel

slowdowns, more greater have about distributors Well, for there the of in let me need when get travel suppliers the general. In resilience achieved talk past, have the customers. the been to because success in the business the

and we something a happen will slowdown. there that when if is that So, again true is believe

out, around with earlier. we've I generally pockets believe, As world described the industry I pointed that healthy the still, is

to will way I that the plan and the industry do growth in believe out. a is in few the it points the always that, by continue long exceed GDP run, we

long some is less rates us. So, when gain very downs a recession. a run. going there's be need when But, more the yes, like very, always may little are there ups And and is there for high, in we obviously occupancy distributor to a

that merchant two-sided the in stuff? greater this us both should. David, allow to we'll and anything greater will of that benefits the think long sides provide to success the continue about run, But achieve we And, marketplace services we to

David Goulden

we on we talking rollout and, shift the lot Agoda today. to the progress. capabilities make merchant – continuing of of that. Booking.com, add We the property merchant those make point gave kind the available and continue already in a at the merchant Priceline do add you to of continuing in. a to data just we're clarify, Booking.com of on merchant We're James, model a to our to business obviously, how we're of a is platform and couple ago wider to countries live as partners range quarters We're here many and US well. to as of Yeah.

Mix as some At from you a mentioned data time, point new to going update. give just continuing XXXX, you to So, grow, we'll in an increasing point that but earlier on give I we're not yet.

a be want trip connected because we're and with flexibility underpin to we're And, So, is you how it some the course, us important that the pleased with with how of talks pleased is of giving lot for cetera, really a to way packaging, that what to in business. about do additional able you able if progressing be Glenn aggregate it's the to you as mechanism trip, very also to platform connected payments, a provides through for also the that – things merchant and have want pricing, and pay et and that around well. connect

It's So, today in be and making for driver it. us we the are future. progress with pleased bigger will it a

James Lee

Glenn, time. help ask on maybe know long us follow for update right. you've your I been an view a a on If up China. give bullish I All question, may –

type what Chinese other to in you the understand more you it additional or that is TAM Didi us fact global China Now, allow a specifically? payments given China edge provide to consumer help the it consumers you that go maybe domestically. improve in like service Thanks. as Is after with certain taking customer And to have an feel service. way that to segment blanket big you're to within where the of work in your segment steps strategy more or looks happening strategy of China

Glenn Fogel

is in And, some that have China the are this many talked travel general earlier economic in important we've there. times, bit And headwinds about a in now And, we've outbound the there right run. how impacted of impacts. said yes, China long little certainly, some

like our get or now known do from Trip.com we many everything building a places customers. like and BXB have multi-leg out transportation ground Meituan brands it's or own is We with approach where or we or players partnerships OTAs, Didi there to as Ctrip other where there can

We have almost in employees China. X,XXX

method to are too. to as and we and brand customers ways We to through to and services types other directly. the try Or come marketing people all get people to different BXB get I doing see said, just our of get also us

very that, continue for to though, – in emphasize, right And continue because going And the create pleased be be where the prices we hope always good And will that to run, now. we marketplace. trying we're work successful do create we and long I'm will we something a I that But is to to best there with grow be we to develop the with sit will to services I something in future. to want know use. China need competitive have there. China customers to the

Glenn Fogel

quarter. that again about the say So, look very you like talking we're you And with to New future. much. much. thank I'd to in excited Thank we very forward pleased the you, the We're to everybody Year.

Operator

Thank for participating. Ladies and conference you today's this gentlemen, call. concludes

You may now disconnect.

Booking (BKNG) 7 Nov 192019 Q3 Earnings call transcript