BKNG - Earnings call transcript Q2 2020

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Operator

Welcome to the Booking Holdings Second Quarter 2020 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 guaranteed 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 facts are intended to identify forward-looking statements.

safe factors materially cause the Holdings' from please Securities to Commission. of results Holdings' forward-looking Exchange earnings list the and recent refer differ at filings well to those the Holdings' press a release, that the as Booking could actual statements, end as For of statement Booking Booking most harbor described the in with result statements, of no undertakes information, Unless required whether to publicly otherwise. as any Booking a or by events obligation forward-looking new update future Holdings law, A an copy Investors www.bookingholdings.com. supplement in of together Booking website, Holdings' earnings For accompanying is press release the section with Holdings' statistical of Booking financial and available And Glenn now for introduce David speakers Holdings this Fogel I'd afternoon, like Goulden. to Booking and Go ahead, gentlemen.

Glenn Fogel

conference Thank Goulden. you. includes cancellations, the nights, call. year-over-year. CFO, by the felt this We second room of And of David our afternoon quarter, welcome joined to COVID-XX quarter which full impact second I'm impact the reported during XX% with Booking declining Holdings'

nights, declined excluding March and loss cancellations, rate overall which year, of this our in witnessed book revenue The significantly declined we EBITDA environment, we of combined adjusted last Revenue pre-COVID and Newly with cancellation an demand quarter. the the quarter. weak April, the high room XX% impacted in versus bookings, XX% of travel and EBITDA impact recorded million. $XXX

newly room is we nights by virus In declined have though, booking with April, April of there still trends XX% much steadily trends, loss many slightly July, We month or newly year-over-year travel are with booked course, about domestic growth July, rates. positive more book witnessed that domestic XXXX. year-over-year. international in After since booked the limited overall in year-over-year The we were EBITDA countries primarily impact negative in nights, trends seeing time room growth improved driven quarterly first negative improvement. reached from year-over-year. a room have XX% declining The the produced have room improved over greatest night that newly nights

is domestically. benefiting travel, consumers In obvious addition, travel it and international an who is prohibitions forces holiday from our domestic want to a restrictions business on point that which

all contribution had improved showed trends. through the and improvement domestic global highest States the the Europe of almost United to While booking the our markets quarter,

a high of been made again. flexible new of As in bookings future. may our And reminder, may policies cancellations very new COVID-XX as be see, a percentage and we have the with cancellation and canceled outbreaks increase

of months we regions, are how some pleased to recovery tell signs we travel, impossible infection rates. infection emphasize domestic to having the in While will lowered coming significantly very continue after to of Unfortunately, want unfold. dealing with many in it their new is outbreaks see And to that rates. areas have are high world they the

improvement weeks, after countries. in steady of result, are worsen these a rates growth relatively we geographies, period recent in a seeing As many in some

believe need the treatment, to in at continue we distribute and to will a to order which recover levels, take to that globally needed. or effective to produce scale We time have vaccine pre-COVID will

on We somewhere to people's this front. believe where on we our share travel, choosing are to before In growth to were to after due The desire those improve booking be rules economies travel, providing of we volumes. urban situation. pleased desire countries witnessed this are relaxed quarters in and our recently is initial increased years demand line travel go lockdown reopening of trends areas But we returns In this not are we has burst pre-COVID regions It market a and progress read more it travel being shelter-in-place booking and home, people's of safe. interested also in news reopened, phase, domestic it are bookers Throughout and initial have in platform believe customer quickly. than have emerge. less bookings seen meaningfully deep pre-COVID. We to stay that seeing demonstrates about to new and of part these to pent-up quarter. patterns closer will types with the this to

the our booking of the than potential that QX, see Booking.com, more other XX% alternative We've quarter. also currently environment customers we accommodations with in in about flexible policies stays with an represented due the of booking interaction We accommodations bookings have travelers often are face. the which increase all alternative In past, to benefit all seen uncertain cancellation in new more reduced travel travelers.

to diversification patterns of teams, capable to accommodation well-positioned policy cancellation footprint, due Our capture travel is marketing and extensive these global very platform rate our and demand choice types.

this We to supply new in both demand operate travel our marketplace our benefit to have and efficiently partners more customers. environment adapted

working demand. partners, platform can are our so closely our capture We growing travel effectively more with the on they supply to market

working as help seek wise it the As platform more partners patterns, nature best to this capture our our are to new and them assistance domestic respond to offering demand information, to we these and will demand that of and demand. provide intra-regional on the better programs the

effectively We showcase protocols also to their and they communicate taken health are properties. their increase helping steps at that have safety our and the own partners more

in understand, know are we Something to travelers decisions. keen make order booking to informed

capabilities for payments partners, key Developing supply initiative our platform extend and us we year. bookers. benefits our valuable of to supply continue it our remains for more has merchant partners this both a and Finally, to

earnings company of our the a plans on help times. As to we we discussed navigate articulated these series challenging through call, QX

First included employees was initial our stabilizing increasing the on phase position. cash the which our business the in and focused stages of supporting crisis,

allowed us extend demand pandemic on crisis it positioning the from that demand us position The footing phase is in travel for to phase the final in have business optimizing focused emerge the focused we to our second actions next the working the can over from lay completed groundwork optimization set capture decrease phase up of to that strong on years. position. the phase. develops, are We a now the important travel few a on and expected so emerge leadership These was business strength. stabilization our The through will as and

During reducing The actions July. in in including the These and including restructuring our structure next we it at Agoda the cost the optimization to the quarter approximately headcount with and the quarters. develop quarter, brands, employees. OpenTable some over to took effect relates some by this and and Priceline charge phase, KAYAK, expected rightsizing assessed OpenTable align at furloughed second XX% Agora. We plans completed only work a in our across few KAYAK, market activities these completed total demand in recently we had of second

Booking.com, its business Booking.com to employee local consulting process operate. savings the will have countries We where over we and modest councils reductions in further With with be we $XX our year, works costs expected loss. intentions over and expect of of in representatives news appropriate finalize reductions level annual that these more working have our through While plans hope net the of this restructuring months. we respect savings. of coming to cost other million the personnel is cost light will cost for in developed and of produce personnel to labor regulations and the the definitive

actions. XX% about these of We up by that be to Booking.com's workforce expect impacted could global

family reductions that Works these and $XXX volumes at closely and to may whether the tied months friends, employees on these organizations, savings million. and places by our or we update with fundamental could associated It expected coming hope produce from $XXX estimate This when and the between estimate Booking.com restructuring we to the million is personnel will are. in cost annual these explore preliminary travel to change the functions all you we subject the about to see We our cost who Dutch reductions have our employee impacted learned expect other costs XXXX. be end could how Council, travel consultation or to conclusion, transaction to is of this not travel, business to make cultures, most. with important its we announcements In that reductions. representatives most to is we time, to lives, will new At

I difficult want This but and like times. that know David confidence Campaign, decisions. been and our the capabilities challenging make fully we've more visit, to very believe demand will This now reiterates proud our entire We will quarter call I to over accommodations and had which they employees forward energy Wish these would remains campaign to or Goulden. have it CFO, Our trying from will recover, insights passion has desire great some millions years of our for themselves turn team take that drew cannot we endure a during always I affirm travel be our has travel. handled on the for how travel. customers in the and to List innate

David Goulden

saw the are to July. non-GAAP our operating review some and Thank and found second release. the reconciliation through afternoon. and into unless quarter GAAP regarding our in on Information relative prior for you, to earnings I'll period, we provide rates growth can color of quarter Glenn, comparable otherwise good indicated. results year the be trends the All

in of quarter. we early to newly quarter, nights we discussed decline room earnings about May, the results saw including the our Now booked year-over-year in for on last in our In April. a XX% trends in call second the

a as in by room ultimately in in to night booked As April steadily across North improved newly levels increasing of May point impact excludes for June, the a night driven and improvement newly nights the QX Domestic cancellations. booked travel. be declines reminder, room Europe, low of proved America, declines room Asia. and both saw steady domestic we

and we less improvements However, in declines America, domestic the in Middle East, South saw Africa.

about booked in about Newly declined of exited XX% the the month the full we down June. nights quarter as room for quarter XX%

cancellations, receive by the and include room as XXX% made work April in XX% Our the an rate the room which bookings. improvement for new way cancellation QX cancellations nights, cancellations bookings full over since June from the for saw decline to continued COVID-XX. April decreased the more XX% when through in in quarter. prior we nights declined Reported of improving impact a about reported We than we

about outbreak levels QX, could accommodations rates, distorted or of travel percentage flexible year-over-year significantly see new the especially this constant than getting our currency cancellations bookings the in greater improving the of decreasing now is a Although reverse impositions in the Note XX% of rates on pre-COVID the closer declined are considering due high recent very daily level to made average for room cancellation of ADRs. the of virus we're bookings easily XX% cancellation restrictions, Gross with in nights basis. we if which decline high being that trend to that policies. quarter continued to reported

helped of the QX of due expected loss of the in the in declined substantially of the mix offset ratio $XXX increasing to like fact percentage quarter. a bookings in contributed substantial of second and we quarter excluding the cancellations, lodging This percentage point a bookings markets industry that adjusted received comparison, negatively the an our ratio year-over-year of of the revenue And The booked in also in a than quarter revenue million the quarter increased occur the The revenue year-over-year. $XXX Consolidated substantial in impact bookings pressure Western of couple of by was ADR by an QX. declines. quarters. only created the cancellations points U.S. pressure gross of and of as reduction for also the As newly some the and QX. EBITDA Europe later of in gross quarter. ADRs, a in the increased at was cancellations the less check-ins to XX% for the bookings are Revenue to in offset in dynamic largely reported room percentage the were broader revenue nights ADR gross million impacted the quarter high decreased as substantially

lines revenue made loss we While QX. variable an expense in significant adjusted of reduction $XXX our contributed to million reductions in EBITDA in

expense significant sales made variable our like decreased marketing, we in While QX. and other, expenses our more lines reductions lesser fixed extent to a in

with optimize we've align mentioned, demand actions reduce the the across environment. cost our we as expenses structure As and we new operating taken quarter to

saw the and in benefit XXXX. cost not which were the reduction restructuring be variable QX modest in item, is realized the demand significant Marketing in year-over-year XX% these net However, channels. we reductions decreased expense to fully charges and cost expense, are a expected highly as actions paid a of in

in the brand substantially marketing we diminished response addition, In travel to environment. our spend demand reduced

and -- and decreased customer were in as outsourced well quarter. in XX% in will through service remain reduction June. Sales our the credit of less losses up to levels XXXX other of processing May expenses in remainder with the expenses support as expenses the cancellations expect move marketing due for associated year-over-year the Bad significantly about debt primarily costs as reduced other year. we quarter We year-over-year lower below payment and level needed XX% transactions a and

saw a we recognized QX what small increase we in However, than in QX. provisions far in

sales in and the will down of XXXX. be second continue expect We to half expansion other year-on-year

of government a the and aid Personnel primarily extent future quarters. aid government primarily in by the benefits $XXX level million personnel However, see anticipate a year-over-year do not expenses non-GAAP decreased volume of XX% the business. be material we due Currently, to in impacted in packages, decline basis, Netherlands the to on expenses from from benefit the further we U.K. will

than the in as We decline expect benefit will personnel the no government second expenses we saw less from aid. half in of see longer XXXX QX we'll

produce made at annualized starting in QX of to and XXXX. we early Agoda, half the expect $XX reductions second million savings plus We reductions personnel the in QX made in Priceline the KAYAK over of of personnel OpenTable, cost we

Glenn run majority until mentioned, employee the for $XXX and between potential expect developed we at process could and of XXXX. in to and appropriate further And estimate will few reduction because million. the other potential of we representatives We million savings these levels produce personnel have Booking.com the have $XXX over annual these cost organizations. As intentions we works of next the rate realized months, booking.com councils, with the personnel not of Booking.com our reductions savings go that be are the processes through reviewing of

working spend any T&E estimated these due and as achieving as savings mentioned, cost G&A file X-K. they're amendments which available, expenses expenses we'll year-over-year, on reduced of largely driven other you at soon discretionary as we'll expenses employees the to personnel-related such lower Glenn office XX% required update decreased our to time as as As by remotely. well

back in year. expect to the year-over-year be will that of continue half G&A We down the meaningfully

saw technology However, the level the outsourced X% cloud in quarter. to less due be decline second of may Information what decreased lower than and center year-over-year we data expenses costs.

remain flat prior roughly We versus year year. expect will half IT back expenses the the the the of in

recorded GAAP The separately relates are non-GAAP Finally, operating restructuring the of gain million included we've benefited in to income gains our of only charges an We FX broken On Agoda. expenses restructuring in at these the million second in activities losses be by in net basis, was results. we million in We recorded remeasurement $XXX offset on restructuring the charge to loss of KAYAK, our our $XX non-GAAP operating quarter gain $XX our to in related of in methane. out our from million excluded the on $XXX investments, QX. as a results. charges the I from OpenTable we P&L. and $XXX losses eurobonds. an remeasurement investments This rightsizing these quarter note GAAP incurred pretax primarily and million partially equity

Now liquidity on position. and cash to our

a in $X.X note billion, due ending $XX.X cash March we investment convertible early increased balance end billion bond the offering $X.X primarily billion to from and completed to QX Our April. balance of

the QX million compared quarter was that deferred prepayment The of cash by QX liability benefited of in reduction accounts long-term to a in flow in April. These balances in gain capital subsequently June. of quarter. in was investment equity on in in by free to the about to current $X.X our partially driven notes taxes in reduction The a small of cash balance small quarter. working were relative million cash mostly $XXX in QX balances cash to were from and flow the and QX previously million offset were Netherlands in the relative $XX investments QX at investment quarter $XXX in of reduction our positive convertible million bookings operating in a $XXX million balance in We positive and receivable $XXX from our largely Our cash mentioned. about offset cash I in in refunded had use QX. of source Change $XXX the merchant million other the our increases billion settlements one by improvement the

-- crisis. focus improvements to the continue the to immediate level We'll of a the on position immediate to focus our liquidity Our of shock the improved on the created we liquidity a crisis. is continue strong pandemic. efforts result stabilize the for business COVID for position position our took high uncertainty shock of liquidity We'll by the strong of given

last visibility better bolster our of efforts a halted approaches to repurchases a of with our As have and clients to consistent we've and of timing not recovery. into and these part liquidity stock will shape quarter, initiate our

our with get with last top not thoughts provide to some Consistent trends. instead but you quarter. approach of results, will provide the I'll we'll sense on which preliminary full help for recent Now color better our on a quarter, quarterly July third guidance, our you line

As Glenn were mentioned, XX% July our nights in room newly down booked about year-over-year.

September. these new year-over-year made continue of the may newly The the the Of travel cancellation in with may rate percentage about new level levels. high is our results upon in a worse decline bookings the be decline cancellation third very depending as was in be remained XX%, nights July booked which room especially flexible of cancellations prior demand we night as future, vary the room to from Bookings bookings month reported experienced counseled quarter and for July's course, in full in August than above policies. and

we as We EBITDA nights we third pressure we adjusted more core July, well positive decrease expect will result seeing currency for seasonally far based in see by meaningful of declines than so continued gross outbreaks or points in the the fact or restrictions will third bookings. the we're And increased expect shelter the our reported will that travel local in quarter. not We assumption the through given several quarter. in increase a travel our what in year-over-year in This strongest quarter in as be in do ADRS. see quarter be to or room currently quarter, expectation revenue negative is a QX due business line decline is consumer expect our on as bookings willingness on rules place in percentage the the with gross roughly trends to

domestic July, we we night an continue we've into noted, room newly trends in As by seen as our -- to noticed driven improvement largely book travel.

Our newly time newly July slightly COVID in during Domestic first our both which over July, the about was year-over-year nights the XX% booked room nights the of nights pandemic. and domestic in of for month increased room booked represented QX XX%. up versus significantly XXXX, room

alternative room is nicely room down nights its booked year-over-year core accommodation slightly. domestic, increased newly accommodation Booking.com Our nights newly July. And booked in domestic were

to continue booking other changes Booking.com's We monitor customer behavior. in

continue seen the gain April particularly our through the July. levels We length return prior the And in into channel. April. year booking to improvement contributors window May. night we versus see coming June trends our in prior XX% continue bookings, after app, a On share largest quarter have second Mobile newly to United the of the States since to for us of in begin expanding year to both direct and to booked Europe the through nights in have the room newly been greater finally, the room and than regional basis,

also Australia, that outbreaks increasing Glenn new some in in including the COVID-XX booking that be witnessed days early as Spain, a many seen a U.S. mentioned, for and to We've in places weeks, or still Vietnam, Japan, in Taiwan recovery these several cancellation of of have the plateauing the in will of of These come. However, fragile trends time very seen we're deterioration Belgium, past we've cases, are reminder increase a trends recent places. uneven an likely rates associated

with that involved has market actions that of this decisions emphasized, some and us Glenn challenging been expected our As demand. quarter number business a ultimately very help difficult level a has will other of optimize

global of well to and the extend travel questions. crisis take actions, With that the We marketplace. come out positioned be we'll our role through have confidence now that, leadership these in your we'll

Operator

the line your And comes Cowen. Kopelman question of first with Instructions] from Kevin [Operator

Kevin Kopelman

drivers update based what those the of from Great. and you're data you numbers? Could the all about Thanks market share And market a details on taking if seeing lot. on talk are July so, what July. you're there? Thanks. in the terms key share, I your appreciate whether

Glenn Fogel

I Hi, probably saw our is Kevin. around share what's July. you in think what to David a go what what Obviously, where are up we our we think to It's what very is, said you with or pleased What think of competitors good are. say don't will Glenn. trying I No, down. increased having we use every have and in if at idea we very that places David this that keep that complete up important listed have mind that went was countries place that very, entire not and a and a is volatile we increases seen have we that everybody, recovery are list. in very out COVID. listed single That the the seen suddenly We'd outbreaks. they time

careful I So said, with be about have were yes, we But David future. saw just again, in to July. caution, the what pleased would we we what

Kevin Kopelman

then on And question cost one I could if other cuts. Thanks. the ask

$XXX that taken mentioned if cut the million savings? the actions personnel that for a you to what you've number good to all across company like million You of included overall number in look kind back? is would cost Or $XXX

Glenn Fogel

about. two gave points Kevin, We Booking.com. brand the numbers. then savings $XX gave million for to $XXX apart Booking.com $XXX million upon you that you based Yes. from we And of the annualized talked the potential we million process for all

the would impact those directly So line. personnel

costs cost. come we'll those available. obviously, it the expenses areas. to our with all our less we've well, be there be expenses people, we as the in going many employ work through those details other is but are we what those going of to change work them out. biggest plans exactly in other some So down, our focused are haven't personnel less the make with We we will But mentioned to areas broken is through upon be as employee-related But -- are business, first. And really to

Kevin Kopelman

Glenn. Thanks, David. Thanks,

Operator

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

Chris Kuntarich

about performance was quarter is curious or Can Just you talk just on new in whether guys accommodation the alternative for yes, July? business Chris in This your And distribution testing the first you Lloyd. in growing. in of not the if channels quarter. that

David Goulden

past. I in remarks, the one of gave as go in that that because change Chris, said, opening good course, that something I number -- is me think, big number the people's my And concern a had and of But an a I So sense think compared increase. a it's large we things seen have and a that the about to we all, pleased. of in what demand QX, let we're And that a hotel what's going group to we is being on. and XX% in It's lobby.

I to Or want I'll thing in in we to We is build a this the for think this to to this COVID have really the about Is how what our that something to is that's about accommodations. continue. say, we we future. is think thing want one do long-term in that we we And going past thing? or about momentary one talked continue that think the not? say alternative continue

property, an were Now the single types continue build are and type home we and in we want we in that. continue of we of certain like the build want the to example, talked we that continue for out also that. alternate and certain to particularly recognize types, U.S., awareness that. for And that combinations, we perhaps us talked terms we we thought under-indexing we thought was property, to probably short thing geographies to about all to in upon improve to it important And also --

that terms all going world. channel single look And every we very going saw, do something with use great in So out am important. a also think I great unique of are we are of get certainly fact they pleased, the I that to we're a consumers course, a to that to that the And is that's like and going numbers the us I that throughout we types given have great get we that can of forward. we is provide the the to that's think, opportunity deal. are product, to to able marketing that. perhaps the I us, information to something but we all And combinations can

Chris Kuntarich

just Got squeeze there I it. And here. could if in quick a follow-up

you had marketing of Just channels? Trivago. Could I thinking you talk was are in were you if ROIs gained you channels guys it curious, in marketing what looked any performance here. was similar a like lot Yes, share seeing other guys results. just about about the there seeing

Glenn Fogel

think, I'll at myself traffic always price. looking right for Well, I look, high-quality saying, the we're confine

well, way run we're to they high-quality, say, our business. us I I when no later the And of previous of want to always we've Now and to directly. probability convert do continue come to what done our back that. one to low cancellation, wanted to that's going that's And from change

Chris Kuntarich

Got Thanks. it.

Operator

Morgan comes question with of Brian Nowak the from next Stanley. And line your

Alex Wang

for is This on Hi. Wang Alex Brian.

the talk go-to-market the or just in the like to improving about in in you destination, strategy, you're areas can opportunities on new focused U.S.? question, us U.S. growth First to the particularly

Glenn Fogel

again, Alex, saying? you're is -- you're our asking U.S., what the just you’re you general, go-to-market saying -- our in say in so --

Alex Wang

that's Yes, right.

yes, and of to in then opportunities and the of ability sort growth maybe, then So, like improve sort in brand the market strategy? the the any go-to-market U.S. difference

Glenn Fogel

Yes.

Okay.

think U.S. So, clearly more under going think a we're is the for great opportunity we to with index, got we offer think in We We past and have proposition partners. saying, I’ll we've we this the said now. great trip, so accommodations. connected to repeat I an we're of all consumers. building types what And with our value was us. a incredible just

message, are lot more, money spending it, know brand they can't now. traveling in travel a don't be are absolutely not people right And -- long-term a if listening or are we are we excited pushing you not are is about ready But Yes, certainly of April. what people want So to now. were not hearing is doing travel. of to out to because they the what little than situation the Liz they future right bit a all

to So we that. be want careful about

we're have So to to I wait. think going

have a environment, it. that people more going to so -- spending listen to And to before ready where message, people we money on we're are healthier start

Alex Wang

follow Got And just on. it. as a

sort of, With stated at think, of that compared higher sort were priorities given, now here. does or company the change this to the areas beyond then, And I Particularly, the has they into reduced Booking.com, past. -- in your how been Booking.com headcount looking give level, more investment you're reported can run where just pretty color lean you pre-COVID? around of hotels

Glenn Fogel

employees, employee have So have we made our these organizations. very conversations our with council, works discussions And with. to our clear in everyone our

the making, in trend, a I the everybody. I in things we competitive believe to know, around volumes in in you the us how different because I'd if invest should that our -- we're volume-related We regulations are the going wage give positions, be connected trying are ones. the saying, made to much the I thing, we I think, wrong to As investments the clear of was conversation world And on very down. clear I it would areas. higher believe future way the of over Those is will long-term doing that the made it very have. potential stop terms advantage And there be are those

we stop right hurt to they're now. think is for run. our me, being not our yes, this. mean the financials this And, I time in should investing does terrible That, a yes, long are future. important And by

Alex Wang

Glenn. Thanks, Great.

Operator

of Sheridan Eric comes with UBS. next the from line Your question

Eric Sheridan

can. you doing alternative lower Maybe terms moving supply might curious against anything the you much return said, know, are of maybe side sense any you can to Thanks That's that towards the see need that back if of to of us returning of the or in. need come the one. would be looking demand? in investing doing a so strategy a on you for the you from on business, so policy, be I the to the environment question. to shift number capital? on period environment the what yourself might what little And on accommodations you're of to have back demand Appreciate during of a degree bring buyback, Glenn, capital to As should Thanks then terms taking for what mix like? of Like supply partnering there you bit environment Is supply in changing color. see what trying you're some much find give on better book. it. to to some I people the in for we look the in on outside before two,

Glenn Fogel

and Sure. point, I'll potential general. Dave talk let in our one capital return balance I'll some the take at sheet first about

terms of would it's and much goes the with looking for that, that supply we the and we've talked are way looking seeing, past. thought it what been is supply in away pretty we've demand, and what relations. in happen be they Would they're what's past lean conversations? conversation to a And us? they happen do any demand to when weren't they great is to is, if open going they to thing be perhaps can one Would do? there a willing was the will in deal more in more So they What about recession, to they open

teams can in with out business. they the they're for alternative hotel our the me. and there on to our anybody in Right it tans properties accommodations, and So looking or are need be now, supply or you demand, talking supply who big whether is side

I our with progress with and this sided teams the number I provide we in we ways doing think right as different good because win-win that we And we making got our look, do two show marketplace. now hopefully to partners ways conversations have try may that have that's creative help are some with them We But the it. both something past. sides. up in very to to in we're future, for a continue now we we're We're what relationship and So coming having for this of develop be think will their not long-term better that good some that will had everybody.

David Goulden

on a the what side, Yes. And buyback said. to just I bit elaborate upon Eric, little

the timing shape not so recovery. and of So, a visibility into and I have said, we initiate certainly we better would

like. We the predicting do and And certainty what having future like. is what now. to So, Nobody looks look best mean to the happen the going we a when as what shape V-shaped recovery it's that? going recovery by mean to is of

impact how figure we're at we at, people vaccine think looking now. out not of of travel looking to Until course, people's to I COVID money, then, are about uncertainty would that what go spend impact right that And so economic what's prices and what does and period the into that's some is ability but more happening the of comfort. with and things people's these all it.

the look But if confidence into consider, be the we we more it an returns, environment, much to and the me to environment will which visibility of characterize reinitiating would where So, a you milestone there's not capital future. shape ask have for. single

Eric Sheridan

you. Thank Great.

Operator

the And your Naved comes from with question next of line SunTrust. Khan

Naved Khan

it shed Thanks mix does How some think talked paid lot. I you historically, versus XX% about you bookings, an you already of you does of talked you would follow-up. And market. Yes. how go-forward basis? crossed maybe shift? about light do directors it I historically, think look Glenn, occur a the temporary directors on of direct a level maybe Or how think today? on that look elevated think think And direct Maybe, today? had then a can do And continue that you to have that can as bookings a

Glenn Fogel

Sure.

to are let's And up thought we direct first say they believe I'll this said But him be to say is give once how we the they we are somewhere is And color David, where the to I we come always. it. let great system to is don't than me us. to somewhere about about customers to we us they want to provide going it learn types our makes where will we've of, value and I'm They learn think that in the so will directly. to this that not building different want to back friction about So important say, you else. else. going think really continue back lower sure, about they customers, through to want great by, connected come travel. it don't booking and do all once such type want is ways future They now. the important our if this, such That value us directly. more trip

David Goulden

the good as think, a driving as them indicators. customers with I But to important travel, place that go not think also quarter, an on really being very said, last over And our call are direct. XX% as be important like is are there as the our is as are we remarks we mentioned that we well, from things I is continue bit my to point some see that little Genius but mentioned earlier during And a Glenn, customers we in an increasingly, it's increasing that, you see our because I important the well. which contribution travel well. also briefly because we mentioned stickiest percentage which app continue to quarter touch we of with things book we see, mix as well. only interact kind way us last this experience, that

with on where the said correlate to trip, you're but mix verticals. few times, So just a ability these and bookings you're not the booking multi booking create, of chip, are positive us to just has things connected long-term higher then this going direct Glenn really as and a

providing with different things learning, data, interacting us future, cetera, which we're is very obviously AI, trip, customer the et big the dynamic in a support, like cetera. et machine environment powered during by You're

we think these direction. important moving that are right So, we're signs in the

Naved Khan

you clarify domestic. had a looking treat single it follow-up does treat really country that mix to Or And us, just the gave are Great. How entity? you EU as Glenn, is levels? the at XX% I the -- domestic

Glenn Fogel

Intra domestic went It's do at an to look France, tourist not our domestic. that's we a you're country and Italian region, But if We -- you sometime regional. a travel.

Naved Khan

you. Thank it. Got

Glenn Fogel

David, I'm confirm. looking to just at

Operator

Mathivanan comes from question Barclays. next with your Deepak And the line of

Deepak Mathivanan

the us the less a consumer new But markets. can from on from lower pressure are help domestic quantify in you on bookings or what ADRs, that of shift either towards are equal and other fewer mix And there any obviously, various Thank basis David, comparable XX variables Great. keep during the new room down bookings dollar metric staying will nights for on the you. July? the trends room the then nights below nights? the bookings the month comparable growth is spending

David Goulden

part, -- Deepak, to the ask second answer you I'm let the ask me clarify to part. first going

this So shift, domestic. yes, I there's with obviously, off couple parts quarter. a though booked a only obviously mix actually, of for newly nights, And there's ADRs within in that points, as total, room many the ADRs even mentioned, moving too

historically, meaningfully and could people our are booking, country-by-country Europe, ADR and substituting on a domestic of is ADRs number going been ADRs travel ADRs can that in into extent actually see that we typically we case, some And some substituting resulted a a be international basis would a the some some what higher to domestic, countries longer on. booking is for in saw the up What be stay. in So an see helping we our of that potentially quarter. things because quite have core in of in obviously, because those higher international

just So related ADR essentially total said, the pressures part marketplace. second just down I despite please? repeat question, as like-for-like, that, ADR missed the mix Deepak, And on of in the quarter certainly could the within in are that the there's your And of that know going we fact points a flat, things number whole a in environment. couple of there I you

Deepak Mathivanan

ask, I the -- No, about going Yes. and fairly was we Is bookings your that point, XX room dollar just view should think how to we close? to on should as basis? night an that down and equal

David Goulden

terms -- took there's we of still ADR no, No, well, be to on -- no, that. going an well, pressure in

they the last rates running points higher So basis, gross on a then nights of we're room more what few we bookings year. than XX in terms down XX And down newly basis, reported a July booked cancellation and little said down were in than a that a revenue. in was on

Deepak Mathivanan

Thanks, it. Got helpful. That's David. very Great.

Operator

with the line JPMorgan. Almond next comes of Doug question from Your

Unidentified Analyst

the for taking is This questions. Dave Thanks. you for Thank on Doug.

on related, you look for returning? to? to you be despite margins early cost in And recovery? about you levels? pre-COVID expect side, shares how would volume of because when with First that for being And traveling, will with traveling higher the cost are just meaningfully the And gain one, the we traveling could do still And example, think you then to should costs them is it to profile LCVS? avid they're people talk these consider to travelers fixed could who the that comments tie Or think different important just all come is happening? return volume you about are who savings secondly, they your people given David, back volumes more to have

David Goulden

second. you don't the take Why and the I'll take one, first

Glenn Fogel

Yes.

terms terms of have recently profile, of of So write-down. looked the in sort in not in segmentation I customer any

I can't in So next it is terms week, to say they're if would what did me to travel, speak travel, the different But of it I would specifically terms it profiles. they're will show now it that was not deep not and traveling and in pre-COVID. voluntarily, that want still People I people surprise the do the on but how is shape of have -- traveling. sometimes change still debt sometimes it where

except Europe, home let's you can't internationally to drive critical because to because at wanting think happening, travel different to is what about a of concerned So, of from there, for very of business terms travel close that And I travel. example, But much those in and as U.S. much I very, getting talk anything, people mentioned, in want about, traveling of that on I for that very actual types one is first, seen plane. the I've because people be they is can, customers people within are to think it, terms thing to able to don't we've seen the say, domestically.

businesses high much does been significantly Well, that has that all Now hints know work leisure properties, we help things. travel And is fill the have course, do? that ADR that us helping no we oriented example, from because company. revenue. in of certain certain leisure been a stopped? always we distributor business have those get customers more And that, curtailed to to are what able supply chain, high-end or in a we of terms And that for longer like

Now go? long-term a trend. is how this long This will

us, may in be long-term. this to be and that to the think could us I helpful helpful

be need, able a is will leisure shift time, supply the business and we're we because long them to As continues partners heads which with better from provide to they in a beds. for what our with position

David Goulden

cost the side on things. And Yes. of

look yes, functions. business, We through will of So many over drive that continue in other said through efficiency the areas. our over the in Obviously, come we to will time, -- areas to automation be back. will, volume-related of reductions personnel those time majority those and

get to years. but to come the don't back said, about for of expectation return, pre-COVID job they quarters necessarily longer-term when is back. is they volume we for our have not about as as So will terms in come levels, we And which

the recovers. pre-COVID. business equal, it a expect in did to expect attractive the business We have we long-term. very things being in All have Obviously, margins fully demand look different than future the to margins little industry-leading when the a will

and more air new we're business our also margin which dilutive be trip accommodations. selling example, building and in to but to out the strategy important like For will rate, will connected our be products

puts we takes, have industry-leading longer to margins term. expect there'll in So and but the be

Unidentified Analyst

you Thank Great. both.

Operator

question from line your Ju Stephen comes of with next Suisse. And the Credit

Stephen Ju

you. Thank Okay.

following to the geographical planning And personnel the business opportunity? And any to you of to across about I way, reductions exits in your regions? Glenn, after evenly ask the up of just I distributed plans So whole? the the focused your nature go roundabout trying trips. guess, outbound as going Or a I'm are on connected is also guess be, China a

You distribute recently believe with their signed to agreement content. I Kiwi, an

will integration Thanks. you presented? are how be where in And process? this the So

Glenn Fogel

Yes.

So two separate questions.

key employee terms organizations, and of, And related. lot cetera, going this is we Booking.com. et with site councils, of conversations works our how a important is we're through having this in So volume partners, mentioned the again, thing our having

happen. the obviously the higher -- world, a services it's can to us where the weighted most want as that. believe We areas important with leader to strategy going I volume just certainly you are effective So up the we end That's think travel to having to to provide coming that way purposely it's is the in world, able impact. a going we be are maintain throughout not for change. don't

talking you're of our think terms what about regular amusement, In that's I correct? Kiwi,

Stephen Ju

Yes.

Glenn Fogel

Right.

is of part connected faster up to the about. and So better. theory think and an different the And attractions we've strategy that our we get customers of can available attractions trip our types running talked we important and

decide out, They can the so is somebody, We or partner. where number had we certain do now we However, to And somebody are a a we that we in believe continue we you're David provide you're they value. partner is a ourselves, of want cities, just with to this touch is, provide to And it up, great go proposition. live we up. join that [indiscernible] and to will that get whatever buy connection stuff we of the to more to build are in mentioned, that traveling, out. an things somebody when one really And app help use that one we going go value. that that the location and app. And be I able, When able attraction. use people is

be that's that a I price think we'll value, differential. able convenience, and a

us I the think course. first, give competitive of supply advantage, will to going again, that, a have we're but

Stephen Ju

you. Thank

Operator

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

Justin Post

thinking Thanks feet. I but if as to recovery Great. hotel on been just taking for their asked, they get industry apologize, already and back about it's try my hotel question.

discounts How really, Google to out bit you capacity there? there XXXX or competitors? or and your an advantage, maybe to their don't And help be out maybe really is find leisure rooms, great little to place think really are hotels promotions do And or filling and to air booking, are about going going advantages going the fill to about airlines how you. I -- as hotels more on as to capacity? have versus First, but booking about even secondly, to you inventory? go could a want travel? a -- they on dependent less XXXX, offering take the deals -- be Or Thank start of thinking find what then building go-to-market a say

Glenn Fogel

Yes.

two separate things. So

of lot about profits that when of of the And I long-term that's change if lot and a of a in impact plane. thing first airlines, not not course, potential about their up the business of there, is front make everybody that's was the happen. which the the financial So airlines travel, going just structures in talking to would,

Overall, On successful been very expensive the first-class change us to become a places leisure-oriented in we product. does in Ryanair long-term, a generates without I that we'll believe a that or class like more high, leisure, other this Southwest, very hand, that business has favorable know it more terms extremely company. tilts are extremely and could of important because essential though, having be

If dependent In to direct on same terms because the of are don't to get hotels, it's going they of of that not going continue be -- or high so some ADR of be person get way it's come they me. like you going even business it. to the going our anything will little and it's I back I to with harder for cover, Google as a bit traveler. can cost-effective, for said, -- partners And they some hotels who type are to them, thing mentioned more they're looking And to very going us. business that do will someone that or to do a

easier that have service don't things the They that. -- in They try effective, we of do. fraction we cost those the established a our bring for don't of we cannot the sophisticated operate the in number actually the languages years, them cause list learning. over They so them have even have around all world, and cost they to more that anywhere will and the in They something I machine capabilities to Now don't do around is world. do languages. we the most demand it the do, to of is way that get can the near customer that many hotels an don't do

go advantageous as don't to in to the platform there's financially channel even world to to not use I'm So about well But there demand coming it's benefit us them that do concerned of do No, too. hotels well, for the if they're that demand. get And so just not for travel, want hotel no is And the marginal work us in world that. discussing, to nowadays. into to one the to more with I got another a biggest that.

Justin Post

Thank you, Glenn.

Operator

next Mark comes line Mahaney with your the of And RBC. question from

Mark Mahaney

more interesting Expedia Two the the just you spend you in dramatic in any American Thanks. question making Does about out? market? travel marketing that booking decline impossible system ask -- seen have to evidence from I by Glenn, year, seen to out this of was demand, there cut just then have North call for a been COVID -- long-term would have think want And Okay. you dynamics? please. the building back questions, impact performance if kind Or any that hadn't really in an is I lodging that have operating overall worldwide.

years, if that that's operating about had think part and we're strategy much development, been your it you. are of could I I talk was on and website to building this three or an -- of you how two COVID lodging right, possibly payments, pushed how back I out for globally? if If etcetera. system think because interpreted thoughts we I like your Thank can towards crisis and look -- far you

Glenn Fogel

HI, Mark.

doing. Expedia about they're much comment can't what or I So

cancellations strategy in terms about really not government you obviously more high-quality now And we can't trying they're are is us talk to on We're the just past of it. I We're out we're sure in terms looking use doing. miles doing we've do etcetera. same in are way had. so is for see of affected Google a do done to foolish, what what numbers, it traffic. We're it always puts more valuable the the it's harder strategy by that It's not doing. thing. we've trying difficult the changes. but with Expedia I'm to So not because It's We're anything now as pleased

that PMs of the and operating trying it That's getting In for building things value we're really hotels the very them. integrated is doing to terms out build of in with great terms makes system, for What our we do system not want so a hotels. going we're out an benefit of to that they're operating not idea. provide a so

doing mentioned build of though, as forward. are of trip. been websites is being building you issue working pushed not That's connected we is What hotels. significantly. example, them for for was -- out some that our pulled with So back we That longer the

certainly, hotel. way who with from can come way with us with For them working a perhaps, example, get to go have our to for the first there we in a have and let's transportation their to ground a with we also book, customers Well, work they a that don't them. customers way but

is enable So, some forbid, if a transportation customer booked that still to create other not something of be distributor, part ground them and would also We getting such. correct. can with to that that

that's think the I more So orientation.

you it situations the about not still Now stopping forward investing, been is the will make And still that months have how connected months about asked of create of -- by down I the think that point that advantage talk been that back? of road. so did work course, pushed Yes, things back. down much back. have be these the pushed has we can We're number trip, our But kinds reduction, about far pushed you always the of with number competitive this that We're because we're was to pushing investing. workforce stuff. it we've been I on demand and

Mark Mahaney

Okay. Glenn. Thanks lot, a

Operator

comes question line the from of next with your And Powell Daniel Goldman Sachs.

Daniel Powell

taking for I may. Two, questions. the thanks Great, if

this proportion not might you and that during a and perspective? higher more to you number from a period and above constrained that be for from marketing where reasons and takes first, the I might still to you moving describe the some could suppliers back bookings it puts perspective competitors and scale the was be guess, come I of XX%. want direct On said

Glenn Fogel

Yes.

We're would that. we're increased a that spend a marketing. number. drive money. But we're say to the direct do going use on but not that and pleased going I'm why bookings. the it. our to like the that it's on and Certainly, brand huge We've about It seen that. higher where to increase not we I with So, have we willing to -- an steady of seen continue with like to the app hypothesize why be continue We'd are not I'll increasing try nicely. cost. We we our at money to downloads if we've be up of bit, on. were that incredible direct perhaps little amount pace efficient perhaps our it, could made point would most a bookings want

we pleased we're the for we're to want getting So, and what right the so to always with buck, we're at. make our speak, that going bang pace sure

David Goulden

about I add mean, are I'd level reduced things mixed on over down mean, on are when a talking numbers that talking much XX%. I just when basis. we're things they the right are now we're now, down volume

we're see they right out. to So many puts as We're have that plays the rapidly said, to as as so as And are in I confident think Glenn we're how and moving when volume it are and there things takes direction. moving levels wait are. they are going with

Daniel Powell

with the to things tailwinds payments there out higher their then business. for Sort accommodations strength costs? and some there that perspective, a customer and in anything the out And really look That's alternative to looking Is from relative there? be seeing are the Are shift rate? related should second you're for one, Thanks. take service we the we there of modeling helpful. of what should

Glenn Fogel

said Yes. We've alternative couple a accommodation the of about business. things

had of There reason they've touch mentioned. the historically, but which margins, operating you that know, the lot of more points, difference, just take because because doing you typically not been lower a As to automate. basically, we've rate work are

been been a profit of So, working we closing margin operating, definitely course, have And XXXX. close alternative to gap healthy have gap. that throughout and that nice

been to but not the segments, working again points, So, touch there difference, gap is between massive there some but we've mix things on. are differences. a There's two mainly due a shift

So, operating trend difference doesn't, a big that it's not in It a are total, we particularly about. concerned margins. make to the

David Goulden

And as uniquely positioned. Glenn said, we're

about to travel, certainly travel, work people all aspects of in accommodation we safe to because push as marketplace. when fluctuates, might that is position happening And things demand So, about this feeling when the believe on feel great people we're continue a are then less normalize. more towards safe alternative potentially,

Glenn Fogel

thinking bad, thing many increase, because is, I that seen style imagine deeply And this long-term And has would one before. have they it not are be, it used this accommodation, found so there's this. to about I of now like have but not we it's people

the there say, lot who means, long-term. run, toe many the would and -- there But see or people in can long just not let's side perhaps be business for the accelerated more And a sort and the supply a dipping in of, could for a their accommodation many, previously long change in demand you'll trend in be what go that though, So that out time. this, had and those of terms operating the tremendously close frictions, capital even I accommodation, was And of as it becomes be in this creating the will into help difference lower believe we've what lower and talking and so. close costs will which combination. seen professionalized, professionalized. it just margin, about type and this We'll more investment David becomes more and more the more the that already more putting

Daniel Powell

detail. the Thanks so it. much Got for

Operator

the our ISI. Lee question Evercore line comes last with And from Horowitz of

Lee Horowitz

Thanks the question. taking for Great.

Thanks you guess, looking Belgium, And Just a talked wondering plateauing a forward the perhaps being from so but Europe. that's to about think I demand shift structural David, you mostly this is COVID? times? to of a other July the area. the as some in accommodations. it any countries you or a of kind we deterioration as Spain Glenn, sign continues in if Or regions the Is for you're alternative the that one, much. talked it's I'm of could pulled perhaps like the improve? you trends stickier mention fair trend, to then, think think region fair on dig just the do didn't it pull forward that whole about at bit in across

David Goulden

the night room answer firstly. growth me trend question let question Yes,

what July and continued was improvements. Europe in saw So we

in saw June in continued into and aggregate. improvement we So July

towards are seeing in then out things we of Whereas As actually the in down in aggregate, in slowdown was in June couple U.S., July and up where in U.S. things improvement called July countries biggest was the Europe. go July basically little a the nights out of flattened a room for or newly we I bit. mentioned, to But compared end June

out where the about in July the things U.S., with and they same. still Europe June being improving flattened So were

Glenn Fogel

not vacations take say, or have to a been around a who okay, a Friday. to work off ultra so that take going I down it's go think that a to something or go increase And and other idea that you when the in helps not to that see something -- property. than weekend all people a And work, they can have remotely that want I'll something I many I'm you're long are from try don't you're extension where Friday I beach me more you a long-term accelerated, take some but and occupancy, with you couple trends recommendation at or have hotel learned on take of trend. I the to Because just work So want about whatever. combinations. accelerating that, an Lee, change, trends to really of away where say get those double -- like don't work, people if the of that going working, happening suppose, days there think it's a that. step place been like but I'm of

your You separate can a room may want work from. you do that

it's coming going accelerated are it to things think together, already. is these of all So so something -- I that

to I got for time, it's the changing resort. want alternative And continue we we think the and at well long positioned want out sheets, combinations. the the fact else continue hotel. They that we good want who very time. a our about grow too. And that They same for the feel to somebody that going are pretty people

good and about which about we're for it travel of future, not-so-distant It positive term. coming as always out So know always back, pretty we comes perhaps the it read long has, for these will. more the will me, in I think the vaccines future looking we're the we some

Lee Horowitz

Great. Thank you both.

Glenn Fogel

Thank you.

beginning have have our may customers times, absolutely some doing going home. to been crisis, I volatile. I remarks. So employees be again, to of helping incredibly And want It's you this of difficult all just near-term it our from our they concluding just these working so since helping hard The partners, give the to volatile. in thank be

make confident, be the tomorrow. actually I to that steps And today better though, I'm good said, about Please safe proposition a we're long-term and so just I putting sure together. on we we're focused value company the have am As night. taking

Operator

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

Booking (BKNG) 7 Aug 202020 Q2 Earnings call transcript