EXPE - Earnings call transcript Q1 2019

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Operator

Good day, and welcome to the Expedia Group Q1 2019 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Michael Senno, vice president of investor relations. Please go ahead, sir.

Michael Senno

Good afternoon, and welcome to Expedia Group's financial results conference call for the first quarter ended March 31, 2019. joined CEO call Pickerill, and be Okerstrom, by our to Group's Expedia president; pleased on today the Mark CFO. I'm and Alan management's May discussion, as following including to questions, The responses of XXXX X, reflects today, only. your views to We or information. revise update do any this undertake not obligation

today's typically we confident As always, forward-looking to believe, our statements. the Company's Please we optimistic materially or forward-looking, differ we or the statements words similar such refer from today's call results made actual about anticipate, release some by on as that, filings statements. for of these to SEC cause are factors the and preceded earnings we expect, are could which with information

predict on and outcome include, restructuring certain of ultimate significant investment to discussed expenses. the expense. for today's today reconciliation guidance all acquisition-related selling unreasonable visit will posted this content, comparisons all exchange, and against our important the our to our which Unless not but find are is closest including corresponding XXXX. be Investor encourage and release, and the to not expense results Company's excludes in expense, will depreciation items are on of to of of content reconciliations the is revenue, measures efforts. release. You earnings and limited without website spending on website measures you unable cost the I technology expense stated, compensation non-GAAP provided These stock-based at Relations for IR and of because And periodically to, period and EBITDA comparable administrative ir.expediagroup.com, most GAAP to earnings call otherwise A we adjusted general measure items foreign marketing and returns other GAAP comparable references

excluded period. have for are non-GAAP on on factors depend various material items are our a results the and As such, guidance could guidance uncertain, that impact from the GAAP

the renamed to we note this Vrbo. please starting that HomeAway In reporting quarter, have addition, segment

do April an XX, regard Group deal, you into to Expedia refer made any Expedia to with on to to to the the call with a Holdings to not that, turn to entered call. transaction, questions in in definitive remains all-stock plan filings. Liberty and the on subject Form agreement Mark. related filing Expedia S-X we Please With over we this today's the take And by Note, Finally, which stockholders. the acquire yesterday. Liberty the information topic the approval me S-X let SEC to X-K refer

Mark Okerstrom

in of come with to robust Michael. XXXX and momentum. profit solid strong gate pleased Thanks, We're growth the out

Now into our the we second global transformation, and year customer-centric, collaborating being more strategic than as themes, against teams innovation pace up the execution. and are speeding across on of Group and aligned key basis being ever of locally relevant our Expedia a more execute

saw in With adjusted Easter the momentum the these built saw healthy than impact, was QX. our themes OTA and, we growth serving bit QX strategic foundation, room we operating through faster as a QX a core night core for continuation in segment. OTA was the of XXXX

efforts, remain add our of supply up long a to investments a supported We excellent at and inventory customer and have geographic growth to Focused acquisition place can partner-centric data-driven and a prices and is time formula our share playbook a disciplined for pleased innovation, that broad assortment balanced part relevant expansion by with key in we deliver We sustained marketing improving. content, continuously believe gains locally execution user come. playbook. and rapid

over our the in quarter XXXX. new We first potential and of core of Our core in new with listings acquisition X.X track OTA we on progress are continued inventory on elevated as healthy Vrbo including continue unlocking we integrated number alternative million of to lodging pace property make to platform, properties brands. a ended XXX,XXX the QX on accommodations our add approximately properties our

With of for awareness you a and our Vrbo the U.S. positioning majority refreshed of our Group's intend primary Vrbo and the will brand high phases. global in accounts Expedia international we consumer brand loyalty, space. accommodation we for business be likely alternative have strongest the noticed, brand groundwork alternative this We in now and laying As quarters to expand shift. brand accommodation Vrbo. spent several Vrbo last markets to the is

platforms of near-term bulk contributed on the brand deceleration and bookings in and we us the trends, Vrbo accommodations our gross consolidating pressure our SEO Although potential in alternative Despite to the of in in are coming increased to on allow will streamlining globally which Vrbo's growth. confident the world-class slowdown, direction, we our has has e-commerce near-term brands put seen our platform efforts operating years. behind this unified, a maximize have

we Boards, In Trip customer-centric family groups. including addition refreshed to several a the and brand, in tool product features, launched new traveling friends collaboration for

to app our positioning of experience. we customer We healthy deliver growth This efforts revenue although these alternative lot strengthening negative that in encouraging driving in international Egencia increase features the a given still acquisition to quarter, room come. impact in competitive but product enhance a have and We new to do, double-digit supply changes branding room attach significant leader growth experience from on the solid can and And growth the in are gross rate. for bookings long had enhancements and term. that posted all FX optimistic an work hotel Egencia's our Egencia's reflects also strong our are many the at aimed accommodations overall and mobile over product remain global re-launched are we benefits mix. first night pronounced years a night

give at marketing quarter. that profits gain optimization with customer delivering Trivago Egencia, the continue will innovation to share us on well to third a we strong combined market. confidence for their Continued pipeline, the travel in efforts, corporate consecutive execute robust continues

and channels, expect year's team's to to the QX As pleased in discussed of The deliver the return large into happy is their marketing us growth ahead results in, last and approaching its back potential XXXX. on making half opportunity marketplace revenue lean themes. call of its our plan fully and to and changes Trivago the on they them as we the back year and lap with yesterday, stabilization our expectations to enormous. progress strategic with against our in profit we're key with All we're certain

turn While and we carrying XXXX have work excellent of ahead, With to momentum, to it intend lot we move that, we're over still we a build Alan. as which through on beyond. I'll operating

Alan Pickerill

Thank you, Mark.

adjusted XX% path good puts a year. early the us growth Our in on EBITDA in

X%. points each, to of Excluding FX close and grew bookings basis gross negative XX% to revenue XXX increased

Easter negatively impacted and the in the expected, revenue quarter. trivago As shift trends at

drove to the We declines, total remain growth year. in and room X% QX we accelerate nights as expect QX lodging healthy while in revenue FX move in Stayed resulting ADR through grew growth, X%. delivered revenue noted, our EBITDA solid Mark adjusted OTA our we seasonality. trends notable of growth usual segment, core in In night first-quarter also to given room addition healthy especially the

Our our in increased from on strong balanced direct is bottom-line contributing benefit is top to in core channels, strong marketing, XXXX. approach track past and solid to performance along OTA trends X%. Vrbo year with the another proprietary bookings year, and business for the our over

related SEO from were QX. the streamlining marketing the alternative contributed mentioned, and comps accommodation Mark That, deceleration drivers brand continued our in along As primary of brand headwinds. platform channels, making tough primary to to consolidation the Vrbo with global performance

We to through in elevated we lap comps. as near expect these gross and growth persist performance trends changes bookings the the the term slower marketing work

XX% Vrbo's bookings have approximately our We do and the transaction in need gross new to and Revenue platform what grew we XX% up SEO trends profile down good expect XX%. later visibility year. improve on subscription on to revenue this with optimize revenue Vrbo quarter our at to

to revenue and currency for XXX media seasonally marketing plan per given investments was of was Vrbo decline the Air foreign negative to in growth As decreased our XXXX QX QX. term. points than at behind Strong as trivago. XX%, tickets X% $XX from up X% sold brand ticket. the top-line approximately offset Total we XX% and the globally partly X% the expected, business a by long by solutions in including in adjusted more with higher increasing impact. position light offset strong declines media in drive came quarter, EBITDA negative over basis revenue invest advertising at growth revenue in the million a business We

at decline in partnerships The volume solid and shift per Solutions revenue in Partner a fees Expedia of other New performance relates revenue. the increases. to the strong Brand negative and product to reclassification drove impact, ticket Expedia a of certain mix currency foreign

overhead we side, on expense and saw the executed managing FX. modest benefit in costs from a well On QX

to order revenue, anticipate strategically of attractive fixed expense levels execute While be leverage revenue driving investing as forward, solid on going the is formula, faster our same these do than to and above Solutions Expedia growth. profit to expenses year. year costs we marketing grew accelerate adjusted in will in on we expect for Cost the last growth expense progress expectation our Partner We the to majority our as the and at and Increased higher comps year migration. service full given through continued cloud cloud we on accounted the the customer forecast increase. of growth for move costs deliver

expenses is for contributed and direct a unchanged. estimate selling leverage cloud drove trivago costs. also total X% marketing in full-year around and million indirect selling to decline increased Our the quarter. marketing in Total the and spend $XXX in just in

brands. Vrbo over grew Indirect and and content higher brand increased costs selling last were and marketing marketing and comping currency to supply Technology acquisition expenses, foreign X%, selling OTA investments. investments from direct in a benefit trivago, Excluding reflecting Core at trivago, excluding XX% X%. year's down and our due spending

General next pick the cloud We anticipate we overall we were continue enhancements. the down and full administrative product to up X%, platform in trivago. expect and excluding few and costs growth content as technology year growth accelerates invest and and expense X% quarters deleverage cost over for declined to and

nonrecurring efficiency. that managing general a and from we noting tightly worth It's are benefited expenses administrative year-over-year nice comparisons. couple also of operational We our impacted items seeing that and

cloud noted such investments, and to closely expense We we forward approach leverage taking this was and the I expect is and disciplined that on year the costs. few higher on in fixed growth flat spend but general lines. tech remain administrative expenses, In QX, content to managing few administrative and product and marketing, next on XXXX. overhead next Collectively, reflecting platform growth we track and the intend in few of sure business. selling a quarters and we as and scale result and remain make our expense general, a leverage on factors deliver we going deliver in essentially disciplined solid the overhead comprised these which modest focus more overhead general do overhead indirect in are to costs will to quarters as

as our good start XX% aligns that reduce overtime. outcome adjusted strong attractive income it's XXXX in We which, while share and year, over continue of shares our year with to QX a in increased though share Depreciation EBITDA the in to EBITDA down year. reducing announce Expedia our Last led our us by see down in an to were year. corporate statement. adjusted to expect expense growth, we're Those full Overall, improvement EPS. acquire to was our XX% Liberty off efficient count and to deal X% addition adjusted X.X Moving the simplifying month, along still the factors, of Holdings the governance, count XX% will for a million early and growth we structure this enable expense pleased interest to goal with to

marketing of investments approach same top initiatives we combination sustainable drive improving that Operator, bottom a deliver growth. that And our ready our for leave progressing trends, that future. to revenue well-positioned a first and will formula question. on the are fixed strategic to to executing efficient key line expect and strategic into us cost we're growth confident We disciplined while

Operator

Our instructions] comes America Post first of Justin Lynch. with Merrill question Bank [Operator from

Justin Post

two. ask I'll

X% rates think growth do a you like Or hotel but with looks take out they doing revenue back do about ex secondly, of X% room that's with category questions First, stable part you any hotel is Do category? lot your and expect about it that? the decelerated of Vrbo and you And FX, at company-specific issues? the And your has you you're the then in some half? take were talk bigger there decelerating, It night of think the in rates could it? how really impact growth deals. really on

Mark Okerstrom

Vrbo, to yes, listen, company-specific deceleration, respect V-R-B-O, factors. largely with Vrbo's it's think Listen, I not

of more place the the was what's just re-platforming the the causing And at actually combination If you a are Vrbo is as a our doing, take comps. growing in focusing look which as well brand been been where is deceleration brand up double difficult U.S., the really, the digits that we doing, streamlining nicely and effort, we've healthily. business we've

and we remain move is has become course the rates, SEO going we direction on the very partners the might I that of respect and we opportunity, that years. large start pulling the underlying And clear back replatforming from That investing our rates listen, our the quarters years resetting would moderated respect the we see a just to fundamentals constructive particularly one until we trends these these just can in is, the much some moves that for to With in strong. urban were really opportunity, part we think of the of over aggressively of to be right to, done overall on of the So the with some take that the with more dialogue business last growth the get chain more until number couple though international XXXX we compensation moving been of significantly year. of say global have global fact, our hotel just rates. case. chains, here

to one this products, lot recognized have biggest create, travel lot Expedia bring, the role all to we and of platforms, play here And unique thing kind Internet but is of a turns value and in out think of here of to which customer this and ones, of services too. who also partners all It unique that incredible and value marketplaces is ecosystem. that we're have I stay we global we our stay. Group a deliver big they have the to a

pleased in dialogue actually expand do create do of pie? sources the so how participate versus and pie value And from how has toward shifted do us and away we redivide the to has both you we with we of new How global We're this that actually in Marriott that chains. us? way a virtually accretive the pleased way is both made. with very super that our the We're arrangement we that of gone that all with

hopeful this of partnerships I of categories. that I'm come global sign all is across across think they are, a all And too. our to things product of our

Operator

next RBC. Mahaney comes Mark question with from Our

Mark Mahaney

last the One, the over usual one know you OK. out concern little Two of just geographic some called about Europe, questions. regions. a U.K. I -- bit quarter in especially

also revenue the talked update of improvements please? And an the there, half us then give Just you in about back year.

always going. stuff You know that gets me

as the about You revenue timing comp there -- back is or growth those out. should of through half to the that than QX? issue related year? Easter the lay just talked more go Are of improve Just in why other we reasons accelerate the

Mark Okerstrom

for first outbound call second theme did and that some out take something we were travel. On then take we the the and was I'll QX travel will in call was Sure. weakness a Europe, Alan really one. U.K. on our inbound seeing That U.K. that quarter. one

as read And better a been here into the June I say, factor generally we're translate extended Easter and how good. things to us. looks the the trends, it would was to in and generally it it time, so out, in as there get reports in anecdotally, looks time tell rest quarter. Certainly, timing. so going of stable good Europe, but from are, I we With far, respect we're generally, as economic was to the good. puts think season, date are and better There's to I move looking May unfolded, always takes U.K. activity high but the will out, Brexit really think hopeful to that hard April it the but of into with a has

Alan Pickerill

be we as back in the first Obviously, to on believe the only things becomes very year. headwind the revenue as a in and first foreign is the through half of there's to said Yes. be as impact of more footing we trivago, of reasons the include Easter terms and revenue trends year. are the on they the that think and a of That about in half they'll of applicable year, QX couple And of the normalized less their move the to Mark, case, those back currency. phenomenon. a half, half

some impact revenue expect our we and to see growth. so And even easing on obviously

business is that continue quite impact We're the we're pleased to with on to about that well. I'd do inventory we other core is relevant. do as a going and that there. The trajectory say performing OTA thing lot around sure adding the of to optimistic that's just business continue making We the we're locally well. work have think and And

factors. are mean, I some So think of the those I

Operator

question comes Our Sheridan UBS. with from next Eric

Eric Sheridan

underlying in facing we so think like your better growing year will of recovering under we on pushed have a improvements? what terms out is a Justin's through headwinds through business, or think the the you to we're the back until following investments business brand your it end. we When 'XX yield you're unifying sort relatively hide seeing rebranding stay And trying and are starting then about what you of it headwinds you of sounds the market And Vrbo. ex comp is going in getting Maybe with in 'XX see up starting the think marketing and to should of those now, out? and to investors now to just on headwinds a very platform or Or of you return some the sense against this expectation the you're business those do When those are a investments? moderate now? secondarily, track made the now about that couple, the one and mask strip see how

Mark Okerstrom

sure. Yes,

transactional business in as for the being really a the quarter, great the business. pleased to to in very performance our One the first business made That real being we a we build marketing a was as big there. listings went but we best-in-class buckets. really from 'XX results lap we and created two that that investments were us capabilities marketing up primary into opportunity efforts the seen, largely really to think with we've ramping transition I push 'XX We're there. started

And still so a but was is growth. that growth, of on moderating a source it factor

primary that generally. really, goodness both to underlying made also the de-prioritize Vrbo and here the results globally, started research investments as one that in HomeAway whole place VRBO side to And We see that the, some essentially in brand. one again, particularly running we version. with a think time, And earlier television of really for on in that story the at can investments, marketing returns same branding the with to growth. investments brand the now investments. global us that consumer were really rationale side, campaign the mentioned saw Vrbo we've platforms And division experience the bunch brand. fact, along the the partner brand, also our concentrate that, we've consumer are we And I we saw consolidate multiples and but improvements some the with Vrbo solid those just brands, brand core of brand, with are we one to that's brand. strength the drove strong HomeAway, performed on choosing other of Vrbo the seeing you us those Vrbo that in the performance The to And was for were is Vrbo brand. the I just double-digit some masking that the of the the done the certain pick Vrbo and creative, consumer testament that and things And a with against

is is state terms growing of this the category. business, popular overall the this definitely a I highly industry. faster than think steady in what It's for

little rates at here, should It of Vrbo, it that grow if also may to takes of able gross as time a a opportunity Vrbo gross that now. is that look I category steady see, the think while our for as more the only bookings, at to bookings, other again, move Vrbo but should on little it this we at bit against state We come. to real right to a think factors, at and I we the brand inventory I Vrbo, here, brand that but growth a and the multiples a again, year, be we us trends able we multiples of the on certainly take because OTA move attractive while think attractive of be through -- grow the get us remains think, to clear is a long category, core these very this for very brands. we not think, a

Operator

SunTrust. Khan comes next with question Our Naved from

Naved Khan

consumer coming Just you Vrbo I under as on might directly Vrbo guess, you that, and couple. loyalty, just HomeAway those with sort think Vrbo? of and in and who now a you're the do address how gap between core HomeAway just side, have then secondarily, the one to consolidated out, and two per I should years? the bigger lead to Vrbo been maybe this revenue next a on with how fashion guess, about OTA, over And versus we night the retention ADR

Mark Okerstrom

Naved, to on not down but question, now lot marketing focus innovative to Vrbo. the on right our efforts a rather retention HomeAway, other our of is intention and just shut customer

gradually them customers, whether not but it's move or ways at respect to incent start them HomeAway of look is the on international many, other as bulk the margin, of to we to to and brand course, over. the that HomeAway that way but the then, with brands can markets, in some in get we introduce Vrbo where of we regional from into globally. to brand, really which customers the we'll probably U.S. that So here of brand Vrbo there against expectation nonthreatening are enjoy is And take potentially the will the customers of a in brand, continue loyal Vrbo this, the and new will the certainly

Alan Pickerill

loyalty the costs difference rest we've think night room as Yes. a business, there are, I a faster night is channel will are the our one. Naved, revenue. long room before, loyalty per between And net And be revenue factors loyalty is ADRs that revenue of read per are ongoing. things as versus contra flow, as recorded than and ADRs, because growing on the Again, the those discussed is we it around that to come but in things tend There in FX in, there if and there's time, other too, would about weather. ebb refunds over flow out don't ebb are particularly and customer that the factors time. component wash. over as that a inclement too much

I In rates we we global terms mention be only of terms core providing is our contracted the to where for in chain, the margins, being the that and of think I'd just things we're charged. like margins, value that we are feel are need

point could quarters, be we our We business, some these global are range. expect there about ways we're little impact nothing can growing It's around to in how the over the rest gap have constructive, edges. the with there's mix about bit changes of changed too, be that, partners where they In try in to time. could as about narrower economics particular for with We've are than there as gap partners. that chain Mark and significantly should to a basis it. thinking that couple in really that an XXX been factors a for last countries the but our value than of think If but that different generally again, the but well, are earlier, rates XXX our talked in contracted our we big mentioned add there, and look don't

Mark Okerstrom

feel have to to couple thing I getting -- on when tools to higher we're aid they of programs in our do where just we that our it. our do shows of great ad which One is and and And and about program The to incremental course, And but more be to traction is as good want is spot. up various see I to it, you order in get partners. we have increased essential traction. only happy want see sort strong we're we will get a that in We're we trajectory. media more could we're where that volume But Accelerator also that. which think, in takes, TravelAds add revenue. is that we terms is partners our that of our something our product, that the the and tools getting providing would also good where getting sophisticated in Yes. aid think I There think drive placements in advertising margin up And show puts monetization said, partners in seeing overall can Alan significantly media, our get to they a traction. essentially other are

Operator

question comes Jefferies. Thill with from next Our Brent

Brent Thill

in you I'm didn't give you a a expenses. just greatest more efficiency kind saw in seeing just if fourth disciplined expected? where for it decelerate from And Alan, a year. this where follow-up approach last you're have you could on Or mentioned the was Mark, on Mahaney's curious the you just had quarter? I'm trajectory from us your of Europe question perspective. on sense Europe. of maybe that year In the what that curious, quarter, Europe is worse the what than did you

Alan Pickerill

Yes, Brent.

we careful we is growth just see think we prepared focused are of the fact, hiring, areas on see sure that to purposeful to efficiencies the some there where the time, in same year. looking a and -- benefit well. Company saw be why very say I to to I that one on value-add for Expedia people something and of year are of where starting lot strategic looking and question, late the trying One that QX was and most of as we we're for the don't as things last make on Group strategic sure expect and of costs aware, started do, well. things of as of And and our At are think So on the the business. we're level a the across can first to about get to we I opportunities kind I'm teams, hiring full better across is and a call overhead the was some really you're think This out. starting the I well we leverage are and some there's assets we're the focusing technology we're couple same we're benefit now. remarks that in that's

We that we investments have some are making.

We are doing some hiring.

don't do but so move on costs and rest of the year, fixed same get to to in as forward. overhead leverage levels we And expect expect the we those see

Mark Okerstrom

with probably I'd of grew business. Europe, with rest line Europe markets broadly did our say as with see on markets most an in the exemption. U.K. growth overall of was in the the of We in nice line domestic And broadly major the the expectations,

that and, the out. from thing in stable with one tell. said broadly, like would broadly earlier, be it was can would we call So I I expectations our what line But

Operator

next question with Kevin Cowen Company. Our Kopelman and comes from

Kevin Kopelman

question wanted ask supplier air I the side. about to and rates on your relationships So take another

can negotiations going you more how your how generally and approaching United impact partners? with there, what's with your and to you're air talk do And those about Airlines you metrics dispute So on expect and financials? your

Mark Okerstrom

Sure.

for big really side that a add including we've basis, constructive business, the that become only significantly very years. And unlike card of value are and business, evolved couple very more are are, we bring visitors showcase of channel the over it's been, I in carriers, one And where same at huge majority with we on fraud showcase areas the partners. started at and our are billions credit the ticketing we the and in have sense cities. automation the the working the become a course the So places United. and value. of you they global look -- we it fact, lodging at look to we're cases, of to, the ones, of U.S. hundreds fraud millions that of billions that has service to listen, if you got not five in to a together, has if side, tale of we've driving over distribution think, brands many than an is and with we become you probably a the together work of strategic protection, customers cast us Honestly, for On traditional all but it's on the dollars we larger last and of fraud revenue consumer give bring, issue. time our partners much breadth products competitors can doing that audiences billions really as of issue, as things, more major to significantly different of got cost-efficient two has as last billions where them of carriers that the the customer can some Not that on recognizing work our of value ever we've air increasingly years the covering lower that partners, and our an

more we're service, can that, dollars carrier. that And for partners. of customer to For add millions that not tens, than if covering up our per

we strategic where Group, ways front our or our conjunction We has about specific thinking we're the American across where basic showcase team. kind economy higher Airlines on unique more. or American around reduce differentiators again, upselling also of help ways with, We've working them into from MeSo classes. is bear. of in Air -- like fare have with to beginning service economy there on Solutions Media things. to costs. platform Canada our And things up Airlines using got each We're really be great partners on of you to is But done also are that some actually partners the our customer can their target creative again, carriers if to just bring incredible this advertising look working customers, Expedia this

of likes Solutions Egencia websites, them including the Our com area of with our value drives hotel the portion if Expedia most That's creation. largest business And carriers' really dot travel world, has packaging business fourth and with the technology. Partner providing been preferred preferred program. major relationships a part of not the many, got business some Delta, of corporate creative in a doing things targeting meetings, of around status matching, business, who's being super

transitioned items, more versus data some thing down new honestly, really them The to platform with airline our peers company, into partners customer on over of a as to to or we experience, the other ways performing to is with time all things in-flight real getting And literally our how things last we're new We've how just I check-in revenue our these service level would provide partners they're use also of their like demand enable review help they that experience, to management. we understand found and say and think, understand root of their so compare entertainment, the our with data in-flight help working partners drill forward-looking I peers. year for started started.

think other think create I you airline that with of United for sophisticated our of look doing space, of and more are us what about with in when our you tons all there's think players to the at all value I just opportunity carriers. So

very We've think has listen, with But end this this months we're always from type having contract U.S. the direction, economics. the We've of decides I United, our our of is a more five a market of out reason, the discussion represents been United. relationships in extent It day, with excited the our at for expiration. that about no carriers of real And go got platform. level whatever different one about carriers than revenue. to to lead X% very strong

heart look that opposed at shop when But to certain at by But focusing largely on with reasons, find not. think happens and when I both customers in discussion. created for would place want either. the think move us, end of end of they happy And they've I think value-disruptive with there will that's where their the don't their really, in we and would to on. end and day, of to we to be competitors suspect it what certainly United would I a pie got not have as United's carrier-agnostic and that Expedia both outages of lot expanding particularly bewildering just engage decided can that not very if it, completely the make economic Our be to the a And I strategic want or at outcome, have dividing I because up. I experience the we value be hearts, it we choice probably they're to up but

Operator

from with Terry Next Heath question Goldman Sachs. comes

Heath Terry

are a as they're and relates goals target within Mark, the in kind about we're to creating that many way marketing mean, in advertising. time curious, the obviously space efficiency We trying of moment talked of their ROIs the OTA to it just that the it companies I before. in

this extent and stable. with have availability. that in been numbers hotel other in us give today. been take beneficiary extent is hotel numbers clearly seen changes, stable night in or and your have share last or the seeing in back or relatively of this changes side you this buys, the and has for trivago's are a Curious agreements on not environment or certain yesterday just commission with And We retargeting Expedia's the partners. what structural negotiations, that rate prior we're curious sort having obviously this. seen for or if operating and You has your pricing you some I'm results within things buys, your of guys saw benefited you're structural profitability can whether forward. merchant that Expedia how to market the things, to and what direction completely that room growth for understand competitors going expectations have your well, have view a of piece We've of pulling around the you parity from us partners keyword just that pushing I

Mark Okerstrom

Yes.

right on wouldn't side, we I that the say are at efficiency Heath, think, I marketing now. steady state

what in from as part we of been think of we a way. this are to can with got and where more disciplined lean We to returns normalized get in year, out. a more competitor's understand levels we the the move spend we've to in, much start more back currently accuracy our approach non-incremental change back benefiting approach I what largely our our And and through will, we're marketing. some has think I step

efficient, of been basis. but more from there, base not also basis, the for core only and not generate I balanced us. think, on does even trivago revenue. start to a on headwind regular marketing it I think half but essentially all inefficient again, growth And revenue to benefit, it's I a looking has this our forward on new a think been for this start a into really So for much back quite year, some we're go-forward of pushing business, good we're because spend OTA Obviously,

it to our think partners, out. our nothing that would there's chain I as I call specifically relationships relates big with

the the new we better I value match been that theme can ultimately these get our general ways think, where for partners tailor let's find from has our us again, channels. to arrangements

looking can volume our you to ways But and our partner programs leverage like programs just on a work we're one at I like the through Let's beyond when really beyond it's we powering need to packages doing control things TravelAds find think we capabilities. approach other getting ways that together platform unique thing. it. you really And strategic are and strategic other trying It's where Accelerator, really give be unique basis. -- that, more very not flexible partner tailor around by

Operator

from Deepak Barclays. with Mathivanan question next Our comes

Deepak Mathivanan

applicable So from the your back commentary the growth, headwinds of is and And at the from smaller in ongoing scale compared issues to read we achieved but realize regarding in it benefit can this also, comps revenue first then at SEO marketing on face time? the this secondly, acceleration Alan, on as of considering And about bookings Alan. Vrbo brand of as comment investments, for the fully year? gains is the well? deceleration half, room I the what investments. penetration last doing are the Wondering you consolidation, online kind to bookability of nights

Alan Pickerill

Deepak. Yes,

the comments I is like both. issue Easter There being nights. there some to night, between connections comments things room first a half revenue room are On mean, definitely on and my are

and that and back and If virtue should have plan trivago growth to normalize that kind comps in they've to get year, a night from that from start perspective, of should they half to that of the meta back just according we of there, see half and by the to a reasonably us some we before year. on start think pulled ease and growth business. goes trivago the benefit the in room one of back the has headwind been at we've as thing I for meaningful reset talked back room generally specifically we've growth as that about the is night

have will did -- the lot of a lapped optimization XXXX. that in marketing We the we

an as have I so well. impact And think can that

and quite we're So said to with hum trends revenue room business. connection definitely happy basically be seeing there. core along. And the we'll between the the continues night before, some as I that just It

good think be that or as better as move we will we so forward. And

Mark Okerstrom

I mean, offline of course the team, online. of job years, listen, last exceptional big business an on book over has Vrbo, just the a three Deepak, getting done of the

yards reach with what think part a getting online you're I associated of those that starting now harder getting that flatter actually is of and to curve. penetration some to seeing right offline

made industry gross absolutely and that's story platform of parts these deceleration around changes lost real that really been platform to gross and, of course, we've on bookings that the that bookings and the brand happening. we've think has But and offline streamlining it has maybe again, some because online I business it of as well. other was taken

that we're think story. we're then marketing marketing really at still So the marketing with -- of I pleased been And investments, the with the terms that's the return investments. in seeing

at think cruising from we're I now altitude. X again, to that and quickly lapping XX pretty just there the something went over story is, we're

Operator

with Anthony Our Evercore. from comes next question DiClemente

Anthony DiClemente

and international. for sense How had areas to corresponding the the supply much just I'm as international supply that macro quarter I and you're saw growth question of of year the in around? upon trying how the urban to opposed get driven know environment. of trying two sort much then Vrbo and that strength the stability is that marketing and performance and outside two. by improvements the investments embarked in terms better other in acquisition is urban a compete just being my in that Europe of you property result and as or in U.S. I growing you've strength of there. a and the any other is And or the to in

is to as consumer well? drive newer on to integration listings degree goal the but thinking those so And just Vrbo? on of Or with Expedia.com wondering, those you listings about primarily what engagement -- are

Mark Okerstrom

is we've performing The very added new that nicely. inventory

more inventory actually solid is I it's of locally payments. got overall relevant that part sure performance disciplined sure adding new and getting which content making much formula, getting the local experiences, making right, just having we've selling and good, right, inventory, though is really translation marketing think user through then through,

we're starting, customer starting, of that starting still to we're efficient think it's show those we repeat more can combination of engagement better really of a here, growth. stages early I terms promise rates hopeful And going. again, So real some things and keep in all and just this

usual. have last mentioned as we we this ruled effort As really into quarter, business

going With broader the player type wave core inventory we're set engagement a where of to bringing also targeting are investing here to driving We accommodations, markets OTA XXXX one alternative goals in respect single with to to Vrbo consumer think globally really really and in of initial brands. our and I terms improve be it's markets. a our best-in-class in continuing as in then combo in Vrbo addition a that to on driving terms focused product it of expanding and of

core OTA actually demand incredible very and got have footprints. general, Our already. strengthening they've urban In international brands strong demand

importantly, and going brands building initial a big they're have urban that is new we OTA extend real we experiences, really having and focus then and into -- Vrbo their stages markets to that integration best-in-class, growth be its to back and and think does the accommodations on own. their in in the and collaboration be no a its loyalty properties, family I have both we to strong when customer the on have on international So friends, unique with user real alternative that it own boost, add the generate but are markets U.S. the unique right strong the potential truly Core in driver question that question properties no tools Vrbo here

Operator

Bank. Lloyd comes Our Walmsley from question next Deutsche with

Chris Kuntarich

on migrate from Chris for few, fee model. can. is We've This of Yes. peers seen the I traveler some a your away Lloyd. if Maybe

to kind something bit lately guys Advantage little relative of compete that product. of industry Just would then the one you seen then in in really just change a would and curious that how those for direction. and to if think maybe move hotel the would you the get some vacation Vrbo starting that And brands if we've like And disruptive that Add-On business. you would rental are how forces a inventory is rates your be of curious expect a take space. look your on lodging to And platform core like on was news

learnings could that if think an product additional was the rental other about early potential there some out a just maybe have it's on like the in, and it give what currently and integration is rolling program us rolled we update about products I And of you how you into markets markets be vacation I been since guys out. should of curious it. thinking your to year

Mark Okerstrom

Sure.

position in what trying plus they what traveler to options they're doing, of fee inventory got at the do. find that traveler model And to fee between complete looking plus subscription On a Vrbo they've pay-per-booking, in menu traveler the interested fortunate can are fee, and pay-per-booking where really pure the ways match consumers the the is supplier monetization in monetization with is type, willing model.

base. something lot a So to equipped is of fact, across own Vrbo well driving fee and I these of in that handle the essentially is changes think traveler sort itself from and or is, very supply migration testing to its any

be not in players, The this them, VR hotel certainly of for we space. is space, particular including the new the have by we terms had but active Marriott -- In that. have the seen in announcement brands recent competing it's core, other

I think interesting. it's super

is of is I degree that think professionalization. some combination space alternative for right the that one

operating big at they at the hotel guest look boy, you good experience. stuff this a providing companies great If are really and really chains, and

thing can a be in and front space. of It Advantage, So for has the I other I it's of our types time. to they develop we're in help and the Add-On industry been new partners help really get get them think hopeful them generally, them while. consumers we With at to their that ones, the for all like with very this to have to here U.S. it alive we market could the right right respect as And add to type just inventory the a of professionalization good these think,

ultimately right over is consumers much second in other continually team as see really And moderately handle I We a to rolled in Buy way better everything It's far. with it Advantage evolving of it place, does have number then of been itineraries. other been the out the there world people got U.S. time. of can Add-On parts time. compelling. right. course, we're update markets. darn mean, the We in with marketing. merchandising product I and deals. international parts to once. in we product super incents we so is of We But testing. to the the one things. like easy know far proposition is significantly that One two it it And to you And But is is at super the important does striving mean, this bundled getting a continually these It the and and product value world. then, is are the We We product once getting essentially get getting of just product over other where change resonate of combination It can everything, over the a add experiment what and piece, continues is We're course, the U.S. and has better. pretty that cancel. as it's here just things successful in But that's -- for and successful we the compelling to market they've everything super the like go time.

Operator

Brian next from Morgan question Our comes with Nowak Stanley.

Brian Nowak

have I two.

seeing very where you're I of could merits loyalty over for KPIs new years the are talk us of markets? potentially are way to to Mark, in You stickier then, talk some kind off. us analytical. the so you supply investments the paying your in program the last investing of sort importance watching you've you base? of customer data-driven sort of the sort build that of through guys get in the sort added about and can of you that a the just rolled of main What are you think you've loyalty, watching the couple investors And about inventory markets a would an these what very in you company, guess, new and understanding out

Mark Okerstrom

Sure.

And company, me core data-driven of a look the locally some a piece we're at customer being to in locally imagine, of just but do can relevant you ton here of let at as success, we be give Really, a terms is of So is centricity. you relevant. what KPIs just highlights. trying

Are of the learning call metrics right, also go. but shifting look say how you us that into So is Well, everything, of you We rates do to go. access taking looking understand, relevant? marketing a efficiencies. products from this doing is locally the we all absolutely optimization of give to just at as in terms with are those repeat are I try So generally sticky take don't some at we real as we our nights? new a markets, inventory We're are -- baking inventory that? partners? we're are way We're We're tell partners them? actually being everything a room what taking measure us new We're at among room and creating more right out. in the does customer importantly, becoming Or at just for are And more speaking, we a that room add keywords, from can a we more to adding for to night we're acquisition we in we metrics And are moving as hey, look we're customers business them? we competitiveness, essentially that, incremental bookings constant placements. as driving destinations new effort. And this direction. and to with saying, right night importantly, a it look growth. look these metasearch get would usual, the would taking relevant taking domestic at the driving I new more at look share add, growth we

the believe customer-centric of that importance listen, story. that is a building product program core focused our and that loyalty we loyalty building focus. of and we're incredible in product, just terms that, best In that on one I'll an base, dead locally the fact additive that that do strong stay the are program the XX providing free stickier programs, is say the customer Hotels.com a product. relevant a super we is nights, loyalty get to But And believers

and the better getting retention customer at are up when status bit that of that real similar into the a focused differentiated them. just it product and over just better extra that They're a you bit Hotels.com little show time. amenities again, Orbitz caret thing that a with better believe and turn great also a to product, And treatment, have, the the all program, bit and product wallet great a on little different, little properties a tiers adds the but better does having addition is up In maybe real can Brand building a make customer I loyalty program, stories. for very a for more better share differentiator bit things Expedia, the ultimately value that of think Expedia we moving

Operator

final Ju with Our will Credit question Suisse. come Stephen from

Stephen Ju

in little from I for the HomeAway out bit to So SEO dig the brand headwinds consolidation. more you on wanted called a

Our navigate recollection issue from was back company slowly. this when was independent to an that they HomeAway an was had that

the so you at you're rapid sites just I into Vrbo? you have you headwinds put comp mainly one of the at pace point guess, time are a some Or these? to consolidating So consolidation are in, calling out, brand have more a

Alan Pickerill

Stephen. Sure,

and is Vrbo of more ads products. in from taking been and it and that. them. paid headwinds cases, a this. Vrbo with moving traditionally Internet would and for I we they've quite places In where essentially bigger course, has time. dependent we've as have on to And all those of paid So HomeAway platforms, ultimately it resulted the like absolutely for consolidated every hotel for we on changed long are can Google and has brands structure been top say actually during headwinds there recapture linking the What that the player had been brands though, free story in And moving they're have a qualified in done of internationally to SEO essentially of some SEO.

But are moving structures, place. comp things marching will good metrics and large, the with in have great Vrbo, up. got be playbooks to it for of I and think past teams building we're the Vrbo over great we're that customer even have signs this. them where, building We're there in brands, player. much and brands lap relationships right past the direction. long are Vrbo primary and with just seeing we'll seeing And brands, these changed example, runway in us going it focused and that a on has some time. platform issues internationally. something move backing as ahead move Vrbo we're of some And will a these it growing of Again, We're and great to optimistic transitional of by and these has long-term regional got We're we're SEO. like some very we're it brand as

Operator

I like remarks. to Mr. back And the to Okerstrom closing time, at Mark turn conference for would this

Mark Okerstrom

next work Group Great. the of quarter. all employees of so can you to impressed listening about past for I Well, And your I we'll this speaking look especially seeing world with -- the it what big the around with excited incredibly hard all happening the you I'm want operator. just work to across to a I'm just forward to around and quarter. that's turn that, today. I'm collaboration the back achieve thank Expedia the all thanks for Company. the we together. progress of to

Operator

this Thank today's you. Ladies and gentleman concludes presentation.

disconnect. may You now

Expedia (EXPE) 2 May 192019 Q1 Earnings call transcript