EXPE - Earnings call transcript Q2 2022

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Operator

Good day, everyone and welcome to the Expedia Group Q2 2022 Financial Results Teleconference. My name is Brika and I will be your operator for today’s call. [Operator Instructions] For opening remarks, I will turn the call over to SVP Corporate Development, Strategy and Investor Relations, Harshit Vaish. Please go ahead.

Harshit Vaish

Good afternoon and welcome to Expedia Group’s earnings call for the first quarter of 2022 that ended June 30. be Kern; the Hart. and to our today pleased Peter CEO, our am joined call on by I CFO, Eric following X, to as responses discussion, reflects The view management’s your of only. XXXX questions, August today, including We revise information. do or this not obligation update any undertake to

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

the for in any compensation. the information. And that, discussed to most you IR comparable find important the will call at Unless to Peter. Relations stock-based exclude other expense You GAAP our over posted on stated, release, to today which website otherwise company’s And is me Investor encourage ir.expediagroup.com. to turn website reconciliation our of visit I measures let earnings measures consistently with reference non-GAAP

Peter Kern

Thanks, afternoon joining today. thank everyone you Harshit, us for and good and

additional that and area showing consumer results lodging adjusted parts revenue even this summer demand cracks. saying in other domestic free we for current travel strengthen results billion backdrop the spending strong flight quarter with by very world. $X despite around down capacity ever strong begin redemption to close on our still and second capacities to are an the capacity of cash posted our of and any we've highest were XXXX products while our liquidity quarter financial markets roughly particular continue in have all a bookings We the as further top travel flight air long-haul encouraged these me Let the levels, of a Of disruptions We economy debt. note, that and limitations a EBITDA with of with this the remains highest and early margins. travel seem expanding in seen delivered be flow We've pleased international on strong quarter and macroeconomic recovery recovered XX%. the we seen back the continued the lagging for to and and is our

always be While look we to of forward and capacities don't when relative strength long-haul appear abating these has these do disruptions been shortages ours. to return as soon, a this

topic moving my to day. Now on main of the

temporary to understand as spent a and to BXC we us explain about lot partners travel For our help going of better our transformation to provide of the service this the give mix tactics, business. will more technology put into BXB our technical last digested right you if consumers. we BXC and we to talking room in pursuit data whether became the businesses and in time how evolve attracting QX in a begin pursuing our took it results, as investors that all strategy needed to clarify strategy incremental has has driving But recovered. what night interest And share, or our of understanding In travel and think been is Today, important you And of sizes. were our our our depth, enhance greater strategy, in of out it lot very of just metrics of as to BXB there's few a directly clear to we consumer the answer we of we measuring and time forward. in quarters, I changed transformation platform last hope how quarter, that strategy. both to particular, shifts market, success the are as as we our shift, and more a this something attention a our

the believe that I well number are have decent recovery shedding a backdrop, acquainted now volume. the down how geo business of And businesses, cover years, I understanding certain results. over of with you we've thereby QX also domestic or divested all competitors think the example for fact can were last share EMEA versus two you buying effect volume mix and in long-haul mix robust for the the noncore of some adding shut a As with whereas by international or

give on our of on future marketing, no on tuning being narrowly where why I'd matter So from brands. consumer to our issues. like impacting focused few short-term how our we consumers spent we virtually long-term and have high-lifetime value and industry best so money have performance highest of and future available transactionally facts cost traffic been value a consumer these customers. valuable direct spending be today, perspective types that of all This evolving drive the more To the the means you these I'm you and going give about more share focused, we on the build relationships performance business. arbitrage have OTA to loyal and intermediaries, not we maximum more to strategy consumers, biggest focus more think our all and To largely focus channels in we time, will approach for of instead is the chased with on pockets it's our shape products a where longer-lasting to clear, long-term our marketing

and versus two gross per who repeat users. production X.Xx we of the the profit profit brands, XX repeat customer and the Similarly, any you over the get the the Expedia book combine per per X.Xx over to Hotels.com non-app months bookings bookings X.Xx and compared twice business members gross drove our highest last users Over the drove of app the nonmembers. per customer also gross when bookings and Xx And and approximately members as course customer loyalty customer, in the customers. have app, through loyalty twice gross the

getting is our and on them these platform entire are turning we to the Given I'm users. loyalty funnel focused highlight on customers overarching And with will accelerate better pleased in as right traction. then both strong that and and loyalty better members with program. features personalization while core deliver drivers we app our already into one the seeing company

next gross to alone new in which 'XX our driver we flights surprisingly QX, able And with downloads of our app price XX% continues including bookings products product really and more With value huge side that loyalty frequency been of QX, with to of almost Not beginning. much for our customers. of traffic and engagement business and 'XX QX just the all us the numbers rollout the is new direct features came being example tracking in improving we drive compared it's directly. with to the to a consumers. XX% direct engagement BXC of be that does our from for XXXX. generated grow members app the X/X our customers lifetime has this not in to Similarly grew in through For therefore, will year, come instantly loyalty important to travel XXXX. QX, That said travel remember app on also versus QX because most grew the

building customers buying transactions their important twitch drivers confident up ground velocity, and have is Google any we quarters, our drive and success future disclosures base not and continue In will as update to core to understand in on through channels. and help lifetime ability meta as you the of other that future you our additional our progress. coming may measure these are we provide it been While of gaining high value quick

And Ultimately historical you need while picture. This example, derive spending marketing against clear efficient disclosure For an gross complete are you have disclosure starting nights currently from help the today profit be a is not booked should only give our should basis room profit, room also below less to we But of are look better levels. the to to on trajectory, is of sense understand night a we spend. even that understand added still booked may the it better basis. our we we booked what incremental you on a not we compared spending but market.

We allocating but the early strongly days creative know of customers we this category and money seek. best a of It we lifetime the opportunity. of that have and consumers the believe to direct kind in have more in done even great acquire plot veins for channels and is traffic this app we while these high drive value to

more been benefits at end make migrated perfection. going the who short-term term. technical long-term on speed Now now news what Transitions no volume stack. Expedia through the significant as is to to front migration anyone the brands their right over to over also can short-term massive massive. impact The just transition and forget quarters is characteristics perfect And short long-term the many and fully transition this migrations a choices for while disrupt of conversion stack. choices we is come. certain entail we've stack our the the is the to of been And in all engineers because clear platform. example two were turn to are long-term are costs generally a by nearly making optimize attention the we make volume Hotels.com had the trade-offs. this We growth. have can single day the two excited we being which like progress always we versus still every been up Hotels.com with move as some largest of one across transformation and right exception. our the day the freeing our from same acceleration is every we've This be accelerated that frankly able optimizing patterns to last to good The prioritize example customer We onto full of But modest we trade disruption now to really of OTA to

by customer product an and been engendered industry of has loyalty issue intend been mean We serves and we of Traffic of set dynamic over services, money of options. and that retention. searches to less customers technical has literally short-term moment for we grabs of engaging willing drive at we traveling growth. searching our public and know business. significant our will we summary, we are know the and improvement in general, in our both Because best membership know position. massively around for that we time the a them wild. in again much improving portion The It's year in once every customers over large ultimately, and never and We given in we up up the travel And a travel. for to apps unprofitable spend billions more always loyalty. change chasing and question our longer-term programs of worthy rarely a volume sustainable all know true providing So for give our is in to any and are are

will share Of course, we where to makes at opportunity bringing the the sense it kind traffic value. and in the grab meantime, are back for look right of right we every where

I As assure some be you can we may are fixated of on as more share, so. you

Our better base way. geared a highly are has right to we value build our promotional customers of share and And we high we that and determined more efficiently we able but far than to been the as in build competition lifetime we customers, very buy to have. believe be performance profitably business and and marketing, our fully will more revenue ever quickly grow

by to end theme. our reverting me core Let

building business all all ultimately, an better to what advancements our of and service the be customer-oriented and the in understanding And benefit believe the and rate. BXB these product to which at accelerated of will We capabilities, of grow are stickiest products things business, also, a we our continues personalization industry. in customers, place better and best evolving

travel to new Bilt, partnered of some partners. proudly provider suppliers rewards as become program power our while exclusive product We consumers. variety year, we demand travel into to partners, Avios, pools expanded ever new the advertisers last what Late we with To the advertise car benefit travel expanding under to platform Airlines are we power Delta emerging we of our supply and we powered has the to externalization, wit continue airlines also expand and Just this program which flag. a Open looking new with externalized time our their the for to for first to travel loyalty also partner. quarter, ads And for power suite. which consumers. all find and reach are we partners, to we allows already our value captive this With quarter power wins. rental seen We've now capabilities externalize of platform our the renters hotel, we to to travel for have along hotel our ways for portal. to had classic we've World now we have scope And offering that we significant we this of continue for the IAG and the add old

This travel added template quarter alone multiple as partners. we to

We see continued will our lineup the industry. potential and power a service our the to as ambition continue product enormous for growth travel whole to help of fuel

in quarter Eric while than app continuing industry. And loyalty who We're customers and that, record our huge with financial So are before we partners, grateful our I'll members change a pass for financials. customers added and and us all closing, to on had to technical progress on the our helping transformation. more to ever employees, it our make we

Eric Hart

Peter. Thanks

generate. with results to the The second was the strong continues fronts, quarter pleased multiple I am business that financial on and

let XXXX, I'll last rates and like-for-like Egencia’s car. dive that stopped that our Chase and business, will the reported into and consists adjustment. growth numbers, remains of But our through as and as our that provide relationship preface relationship. growth AmEx BXB air numbers February exclude I non-lodging powering as I elements we strong. that well of rates the go non-loss as value Before is their is GBT one of partner a which a Chase me new

well. to continue has locking which performed power we However, business, their

non-locking agreement into on with performance significant November And actual X, business. reflective to booking the gross it While as We GBT. us on of a business supply of AmEx on Egencia's completed lodging EPS the a we our business these GBT sale a was reminder, basis, are material the not was entered more AmEx believe XXXX XX-year numbers like-for-like of and our profitability.

up Total seen on lodging gross improvement Like-for-like a on as well basis. across a highest we've particular was for by bookings were X% growth the improvement versus We've Moving a XXXX X% on which a and continued ADR XXXX basis, basis a was down and which is strength America. and in in the up like-for-like on like-for-like QX basis QX and reported up X% had, bookings lodging North gross and levels. like-for-like bookings were product X% products XXXX on bookings, sequential types basis. QX on reported compared XX% P&L. versus recovery driven all our a geographies with above basis main to ever were a X% to reported all down on a down an Total gross

in monthly were up for gross On reported Now the a May walk. lodging in up basis, X% bookings April, X% up X% and June. in

strong still basis, with on in recovery the as to and majority As versus XX% a QX reported of for saw XXXX on capture the of but demand. July bookings up like-for-like from spend same it's back made. $X.X choppiness year XXXX optimistic disruptions. land up are XXXX. similar airline Direct revenue be basis rest pacing in XXXX have for sales like-for-like But with in year, the with early and a early the revenue and as seen On QX. half QX we QX actions due monitor month, billion levels. remainder X% mentioned, a some The of the of the other of basis. the indicators to closely was was sequential expect robust ahead in, into of continue Currently month, likely billion All expense remain half we a seeing to $X.X and is July, back to performance Peter we line reported summer and basis. to for and pacing we for down a yet lodging we airport true down we X% will the bookings to continue on Total versus to improvement marketing adjust leading levels the bookings accordingly. XX% our a up We was and XX% the

gross percent book of As increased our as profit. a we Peter on marketing to expense mentioned, efficiency

As to we lifetime at travelers, creatives. towards to direct continue brand as strategic build part allocate focus higher spend value of such and installs with channels a relationship our pay

EBITDA $XX for a XXXX. XXXX was $XXX the Costs XXXX. million, was on our history XX% margin the $XXX quarter XX% and overhead. up increase was and was million, XXXX on were QX or were XX% XX% a a versus Moving basis. higher $XXX up margin QX basis than XX% over Adjusted from in basis the EBITDA second the XXX quarter lower quarter on highest QX like-for-like adjusted reported than approximately sequential to QX million and EBITDA points in of million Adjusted for

of we primarily line became Express wanted was QX. Egencia. investment on for Travel, also the reduction loss Global due loss $XXX since in XXXX I a our is received quarter interest to which of the call public mark-to-market GBT loss of was through out million. to equity expense May other The share in Business by a equity which This minority in driven price exchange end the our This company the in American

than continue is in led the in terrific cash has well. to supply anticipated a continues believers world our to reported been $X.X team. with travel leading a the bring by GBT to basis. and perform in management deal a QX flow, billion company very which additionally, faster And We corporate on rebounding free On long-term AmEx showed GBT and management corporate travel many

merchant by flow the cash cash in Excluding was in $X.X free Vrbo's the change approximately deferred restricted change primarily bookings, billion. driven

our our which on total billion of we cash consistent May, Since XXXX. May and rating. investment-grade ample we XXXX approximately $X.X cash liquidity, totaling until of early remain to no debt the notes in which equity. senior billion. end, maturing to preferred redemption XXXX cash we as of have of the due maintaining position current operate quarter business. in over includes us billion in committed announced our it hand redemption provides XXXX, Post $X $X.X have As repaid $X relates to this unrestricted And with have this and billion net we notes We

Regarding capital stock remains undervalued. we our and to record capital our track returning strong a allocation shareholders of we believe had strategy

results we question. our Operator, financial including and our with our reevaluate yield for As options closing, are overall stronger this a on the with quarter. executing get In ready our accordingly picture further. believe we achieved more repurchases. on macro the will performance potential first pleased share clarity strategy travelers we I will relationship we are direct improve we

Operator

Eric of Sachs. Goldman comes first [Operator Instructions] Our Sheridan question from

Your line open. is

Eric Sheridan

about margin question. a much before to cost-cutting it's during either the disclosure night. a quantitatively Thank or qualitatively per you should returns thinking so about over think exercises helpful really you BXC that and how some in ways little whether for about in bit taking for the we model thinking do ROI I of room might we've booked could generate which out or the longer-term talked framework gross profit back coming investors. for the marketing Maybe Thanks. pandemic the you margin strategy the all bit talk framing Can sort business long-term? what was I'm around or for on of framing which leverage better additional targets beyond of the the about coming just be

Peter Kern

CRM to value marketing be color that in able and as the and loyalty, to believe we use we'll to customers at drive better of the try direct relationships. for up towards ways you out membership customers going including our market. of of et through to we're We more and And of a app question. high we membership able right Thank Ultimately, ultimately, more buy efficiently lifetime get drive into ladder. positions little capital being to customers I'll the Sure. channels, more these variety better believe a a our variety high the in and cetera kinds value certainly on it. put including moving

are trying now. that We do to

and but a of We customer better LTV are from. as better more we would I understanding and fairly tools, we what and each doing getting at granular come it, say, remedial customer's with channels better get each potential they are

ultimately so again, somewhat that be we're lifetime doing as that on We the remedial. think drive value we in value but very then, way market the understand So in admittedly out value lifetime a also we granular can buying tools are that our can. lifetime way, now. basically most we're But broadly, of journey to efficient that

accounts get we As customer together. of all our

loyalty heard consolidating plan You've everything. about talk us consolidating data, across one the

performance one acquire. we we plan As have sharper and better as that to for to are and going lot how customer us get to on a LTV loyalty every traffic acquire going everybody, and at understanding get understand and we reaches we customers' better allow who that's identity each

of we're ultimately, acquisition said are I've efficient looking money, value drive money of doesn't money more we on out and spending we to as more value we get more So, may if and spend couple the customers. be good less of to kinds spend. that out mean calls, marketplace. more really of it to it, right get buying expect a we planning And the more we means the at And necessarily just of

ultimate that So is goal. our

we have LTV, better and how lots I have there's customers more of tools market many time of right kinds of as we're the to the but to passes. going of buy already to a out think, understanding drive

Eric Sheridan

Great. Thank you.

Peter Kern

Sure.

Operator

Thank you.

comes question line Kopelman your next Cowen. of is from Kevin open. Kevin, Your

Kevin Kopelman

quite a some bit bit quarter, then. seeing the you you but of view the I that a little it like come you back early has since drill that in on down environment see did hoping lot. growth you're Thanks. current then how a choppiness more could quarter-to-date, was Thanks given booking travel sounds

Peter Kern

can Yes, sure. chime my give thoughts. Eric you in. I'll

seen I we early -- choppiness saw think July. referred some to, we've of as part in the Eric

how has with of many probably a better disruption of it anything we're think the than we resilience there's of feel have ghosts. time cancellations. There's lot know a Europe for the as in and strong and noise responsible seeing was of airports. Eric of a Heathrow in We're last more July, few could obviously, a been like temporary lot weeks all a flights and for similar go rebound been in you and North to of in There the it, lot out. in macro America strength, that's in been But And we capped weird and QX. As earlier said, backdrops. compared looking over all lot

So let of we've than that, beyond real we're optimistic. looks period in what summer reflected seen, still up there's to optimistic. Again, no lot bookings be had, strong. And a other but the that we There's July. we're

Kevin Kopelman

you -- the as touch could Could it's on and a also and largest puts typically for for follow-up, quarter, in just the the it's profit quarter takes EBITDA -- third you given Thanks. the year?

Peter Kern

let I I'll that, some Eric may Maybe, be Yes. take difficulties. but technical think having he

Eric Hart

Yes.

Peter Kern

you're Eric, there?

Eric Hart

Over here, got you it.

Okay. okay? Kevin hear me can you Okay.

Kevin Kopelman

Yes.

Eric Hart

aggregate QX high business seasonal in, -- came mentioned, an in remarks. where If mentioned the if seeing we good in to you And a from As or perspective. prepared our then QX, structure, the leverage I is look my about continue also in and the the EBITDA very similar call that we operate quantum will. you we feel at EBITDA if it, I

feel we quarter. good the about So

coming pacing bookings mentioned, XXXX. and whatever As what's also one the I pacing that's on already use wants when forward on also the looks for language say our or the above also periods, I books to

the transactions Now, matter, layer and but QX QX that and – seen come on and comments trends pretty And what went an in thus that just a the environment the in business where the given continue is, for far, then have adding about just Peter to along to feeling there's variants necessarily occur good now still trading disruption. bulk of the we more we're pandemic seeing. need that or over of I COVID remain the historically through in that volatility

but travel And to as the similar resilient And there spend. than so volatility periods, where we've of continue you early seen, continue was to July their back and and prioritize levels earlier, mentioned, to mentioned August, Peter I QX. of of consumers see are be part half historically might the and in more back

Kevin Kopelman

Great. Thanks, Thanks, Eric. Peter.

Eric Hart

Thanks, Kevin.

Peter Kern

Thanks, Kevin.

Operator

from a you Truist Naved have Khan ahead, ready. now of Securities. question are when go Please We

is Your open. line now

Naved Khan

you. Thank Great.

Just maybe. a quick clarification

early Are that, maybe and they of are a is that? Are share or any for Peter How you said kind complete. on monthly us So tech benefits terms the them? can like-for-like, the July. you on of XQ basis? they And so able the understand shared should trends you from to – in we results Hotels.com reported there then be you integration might drive any with into

Eric Hart

are Naved, perhaps part take and take Peter a like-for-like They second you the on I'll Hey, first one. basis. the that, of

So, the accurate of sense what clarification, also service for just out we it's you the business. for and giving the a the non-lodging representation of that lodging essentially believe is is trajectory taking again, everyone then Chase components more the And Egencia, a so agreement the our have business" it GBT, sense puts Amex and the given that that had the over with made takes look we we've like changes "for gives last you the few core what and trends we've that that given years.

Peter Kern

And the question. H.com I'll take

at win up the beta the to but the is, stack now as on same Expedia disruption the to not of time. mentioned, engineers now yet. freeing not on us, and Obviously, the stack, H.com is get stack and are answer the wins optimize to the I much short valuable the the seen expect we've we So mostly highly we're only

necessarily We've been to engineers we've made whole one work the engineered, stacks. or two same any broken not or as the both the into many carried had – improvements and stacks. is twice been wins idea are not across. working different any other on So across, any necessarily And stack needed we've test

And a a win it's for our So stack, everybody. time more for win traffic. the much it's now to that, win, same get every get a of on we more we

the the massive. on can to we the just can much and work so we customers front And front-end to that, we'll that then across benefit test will and So to getting all now ultimately, start all and better, but the make product that that get engineers everywhere get we those not on across be the go now have lift commercial, stack. every are of brands, runs opportunity every portfolio put do the one for consolidated And place same to can and going stack. opportunity we've else moved the only Expedia biggest space. end, where we we our win is on we'll the And every iteration

But driving So say, which we're particular that's bit. we that Naved was days the enormous. will opportunity somewhat what is I and in and expected, good to is early less the than disruption

So, we're it starting it's now to days. But we're get early very on people those and putting benefits.

Eric Hart

clean-up Yes. remarks, like-for-like, both both have I Hey, on because actually a we basis. there on my in Naved, and just reported to want a quick

provided total both me just be numbers, is itself to basis reported X% the make then a clear. basis And the a reported So lodging like-for-like for on really We gross bookings, on clear. let just on then that WACC, which a and is basis. X% the

Naved Khan

me let just understand maybe for that July. maybe So, better

So how and you towards up of out and back that? Is on weak sort July that reported the a the basis, started should look picked or end. how shared trends at we

Peter Kern

reported. That's Yes.

Eric Hart

on basis. a That's reported Yes.

Peter Kern

All are a on basis. the reported monthly

Naved Khan

And that's lodging bookings only, right?

Eric Hart

Correct.

to make you Just me. heard sure

Naved Khan

Thanks. you. Thank Great.

Eric Hart

Thanks.

Operator

Thank you.

question Our comes from Lee Deutsche Bank. next Horowitz of

Your line is open Lee.

Lee Horowitz

levels either you seeing Great. on what capacity the remains Appreciating the all of kind in it is you seeing robust you're of travel you constrained. Can And into to this fair remain still accelerated XXXX XQ, within guys travel recovery quarter still terms at in comment Thanks of that for or urban kind trends quarter? below question. there? think long-haul guys still that or are

Peter Kern

to would I have cities say Yes. part, been coming back Lee, yes, pretty the strong. first

it's materially back. have summer and is been, as not strength seen this in strong as Europe. you've And traveling is probably it coming been but it -- that other particularly the you've things If beach

right urban seen different we've non-urban. as has in into up mentioned been I But and different every has So, the by going the and It's kind by it's in geo product. recovered of substantially. and urban everything improvement beginning everywhere

I various we business. numbers our think not spots are tell bad can buying that from you in

to out going not I'm nicely So, go places for us is growing urban but that breaking nicely per industry. into whole it's been which se growing been the for and has

are So, there plenty I certainly this summer will of think travel. urban be And Cities back.

Lee Horowitz

that's and you are ground could. talked In of the no headcount past in if kind one still have bringing bringing loss that as headcount guess struggle ramp having some problem, terms the word guess in longer I have in say some in media? the you would market as And on Great. of labor given new follow-up you maybe a trying the about to terms much of may I in liked. I of slack guys you or

Eric Hart

take can Peter. I Yes, that

Peter Kern

ahead. Go

Eric Hart

to trend a our candidly, would what want perspective. to from we say below we I and do forecasted both continue Yes, hire new

would at the I dynamic moment. So, to say that is that persist. the Obviously market continues

hearing to of So, across to it's there's will. think also lot calls. well you challenges a something as if we're that see you're greater talent of There's some wage accessibility continues watching inflation probably these which I be if

resonate do So, strategy but does story we I that through our also point, recruiting. our standpoint, on seen our closely. something a from I say watching it's come that at think will necessarily we as are quite recruiting haven't well execution this we But and are

from whatever some there over We people us think any trying are the else, I or a what within excited context that out a an be that ill perspective of challenging wish And ramp there on that to we're broader accomplish. a coming of doing about could I opportunity to hiring months. for layout environment. not but just We're

Now, with a lot that uncertainty of there environment. said, is the in out

are sure to appropriate making decisions. at we're that everyone investment making make looking sure head priority people that accordingly open We our our the and at putting else on items highest and we count our prioritizing are like looking headcount

the we want to dynamic at to that? levels if like success not that a our recruiting talent the the of business have So, want other you anything aspects priorities. but we to relative sure it's necessarily to add but Peter of to continue in lot not

Peter Kern

just on We're solving and people transition. that freeing Lee new to things. up continue our constantly make I we Yes, problems technical work progress as add to on would

two So, of of that and talent we for it the the ways, is we're every it's up need capacity which kind where we're solving people also market freeing we're looking work to help day open roles fill can thing. on next kind in

going we're it efficiency ultimately way. before more of I've the time. So, get said to over out machine we're that moderating And as

that trajectory looking something balancing is we're So, at. always

Lee Horowitz

both. Thank you, Okay.

Peter Kern

you. Thank

Eric Hart

Thank you.

Operator

Thank you, Lee.

of Champion Tom. Tom Piper. from comes go when are ahead question next you Our Please ready,

Tom Champion

morning. Good taking Hi. for Thanks questions. the

just if summer in And alternative the inventory? a supply segment. whether talk you very any BXB and not about Vrbo the EBITDA or strong the in little a and you business little more curious space could bit could then revenue partnerships constraints you with in bit encountered new maybe second Just and and talk about the

that thoughts your on Just sustainability. you. Thank

Peter Kern

Sure. Thanks, Tom.

our on mean, highlights couple I I business some We've sorry, markets. of the a Vrbo. continues to guess So levels. supply XXXX -- first of demand all, best constraints well be strong in above seen

but like We've strongest in in an adding we supply and level main our Southeast our US et competition. faster I the been supply such, actually have beach, at US been and think accelerating adding than markets beaches cetera.

trajectory So and pretty time. good kind better that about we getting of feel all at the that we're

we're again this but markets there have love more supply out were for and in summer to were sold markets constraints. those strongest adding places. we'd our in sure, So There supply,

on better things, for new can seen componentizing change and just one are love pipeline. bunch our think our It's to them we far there's was travel constrained lot front-end cases stack. our Hotels.com, Unfortunately, easily create our even growth our that the so with partners with also the products Orbitz As some them help really getting partners get We end. in but good a in the not front we And their front-end we that on all of more BXB use of talking as modules, I the by to with. business name agreements all use as partnerships products to BXB we can we've that's and about products names. go, I'd our our a partners,

our to like learning and products we make service our the the there's opportunity all capabilities, externalize our or machine new lot to haven't better our things doing fraud work of So for capabilities. or partners, externalized that a capabilities, we're before, in

is lots have So have tracks, the partners valuable which will we we we're new we wider want the to with much already kind we base more of we of already working think two partners. already and of products available, partnerships that want into our be to drive products value externalize to that and to a

on There's new more that that it's like deal successful, value for deliver those So, when our we they lots deliver car more our both and both with more did excitingly successful. means, we going. most partners others, things are or things with Delta exciting our product, fronts. of partners. a us makes And of many good And things happening

I instead one our of those it's it So all deals can and just we into our turns our situation, great really and drive outcomes use travel where of sort classic supply And supply think those the to places a things that's of partnerships had. always really for partners. better we've other technology symbiotic

and So we're -- excited. plenty We think there. accelerates. it's like growth growth linear think of there's the just I don't

have have the we'll come will we roll the each and time. think, about. I exciting We'll products new come. excited those of it. think that partnerships products add what more some new new And have that over out, most will we're things that partners externalize, ultimately, that's to can I more And big

Tom Champion

Thank you.

Peter Kern

You bet.

Eric Hart

Thank you.

Operator

Thank you.

from comes question Research. you ready. Deepak when ahead next Wolfe Our go Mathivanan are of Please

Deepak Mathivanan

Hey, for Thanks guys. taking question. my

trends monthly Sorry again. to the on jump

sort XXXX more normalized quarters near saw like environment How behind that Thanks sort more to kind still the to mentioned of sort much. of last we is of from markets recovery significant? growth of could the fair XX% of now some recovery assume now? take about that about of staying levels, over levels? it geographically few so product Are is maybe and think much a us, it's and do that where partnership somewhat the kind about the demand XXXX Given pent-up the higher from other efforts volume and kind any it's by growth you you driven just that marketing here it there be

Peter Kern

are would recovered. Eric, still Latin And America -- are markets of not opportunity. have so I But that still plenty geographies you there for -- places say, fully there's APAC of another. I'll Yes, are still one, and can within take a not follow. for robust. stab certain plenty maybe Deepak then there's that there that as

no won't continue I for robust seen we've the foreseeable that future. sign the think as there's what now recovery

when As strong. there's environment one Eric travel. what's But happening will with that quite the if -- pretty knows to far alluded and no and so looks macro everything impact

The our the other for opportunity I growth main bit OTAs there is still right? big of enormous, of think the from perspective. pie about our maybe I travel the big mean, big global is we competitors. ones more know XX% maybe market, eat So a and don't I

them to can the add I think and travelers strategy and we continue there. to to So in out have describe pot up. there's grab And to a lots opportunity we our lot of pie trying drive the was of I stack that business high-value

I of so up XXXX because don't know think very are have had. we recovery way long-haul definitely caught travel yet there's under global not is been but geos high. So be that to ADRs levels, macro air et plenty and still cetera many

want don't But So if we've that. there's you consumption a seen escalated Eric, in of in the back add the numbers to fair not anything? I amount driven definitely know market. by that's world

Eric Hart

No.

Peter Kern

you, Thank Deepak. Okay.

Deepak Mathivanan

Thank Great. so much. you

Peter Kern

bet. You

Operator

have Walmsley when now We UBS. Please you're ready. Lloyd ahead go of

Lloyd Walmsley

if questions I can. Two Thanks.

like like by It's think at looks per room looking there just quarter up it guys on bidding basis. just You side, Is XX% improvements a direct or brand a function because campaign? a marketing the ADRs on that higher night. something my First of up mentioned profit marketing going math, was year-over-year. on the deleverage I and efficiency the bit of in a of booked gross

just that a like does that Wondering Thanks. supply supply little one Are you lot a rebuilding does how then improvements. improving product and priority talk in in acquisition team strategy? guys hotel you on can more? more fit the and where just And in? adding product supply fit that So product localizing a as second doing the from side, product driving if you about direct explain the guys

Peter Kern

Yeah. Maybe order, reverse Lloyd. I'll in take that

kinds terms other Different supply things. in the different competitiveness discounts supply on important package both role member of plays So if in terms of an discounts, and terms of of breadth, pricing will. yes, kind discounts, you side, in of transaction our

So plays an important supply role.

more past, but we sign the if been have us acquisitions, And people you to try do partly had on yes, more change been in always are just cumbersome. ramping and harder to the up so is capabilities are, trying it model something and that self-service we've we've it a know don't was time, been I tirelessly our also suppliers board which bring we can but longer on. sign working remember easily because lot took try partners for more We our self-serve. but to a also to and that merchant we long ramping to

scale of beyond that just management course properties. acquire market gives and to us So back people hiring up

on one that's of driving. line So we and focused are absolutely that work

of then booked when we On see deriving look marketing at the number. GP the the the cetera. look including yeah and say -- marketing which up, in to we I our things, all that pricing compare deleverage side, our at and booking from you you cost bookings, are we're getting getting loyalty two all besides GP, we're would line, things have we moves And you other are what leverage in et those includes

our of getting et promotional because can't because merchandise some which and nights be look appear of more really mix and and at you're missing discounting they're on the loyalty side. You leverage cetera, other you're being room aggressive is but more missing other they're to components really with why issues these some deleveraged getting competitors

leverage collective are and others of So we're that out not. getting

Eric Hart

Yeah. thumbs up. me okay. I can a if hear Peter, can Hopefully, you

Peter Kern

Yeah. Yeah.

Go You're it. back on. for

Eric Hart

Thank you. Yeah.

looking at that that Peter reflect spend that a just things. and perspective. it profit marketing aggressive of and just is And we the said we and reflect I a recovery. do want so around But to fair of amount I make to holistic going couple time have I from we spent gross and did in a well sure the are One be

are as also that to we're higher we're two acquiring returns downloads are if app travelers such from because the value, the take then of and extent hit that we the P&L mentioned, a mentioned nice into mix Peter of shift can to building will. is, push time and that we acquire that cohorts into to or that a longer opportunities longer-term seeing I perspective. creative, lifetime then also essentially brand have of of or marketing customers relationships marketing but you see And as types So to travelers profile customers that and the over going the that

So it. to there's timing aspect a

is is, healthy. do profit, again, from And given -- we be three then in rebound standpoint feel a marketing feel gross the in mix marketing both our from to the good spend. is Two pandemic. and So gross we profiles spend that we aggressive want longer that

Lloyd Walmsley

Got it.

Okay. Thanks.

Eric Hart

Thanks, Lloyd.

Operator

We of you. a now Thank have from Wells Fargo. Fitzgerald Brian question

with your proceed Brian. may You question,

Brian Fitzgerald

Thanks. bit of question. follow-on Maybe a a to Lloyd's

that the perspective? from could implementation in look the Thanks. XXXX the you of any Act change could in the business wondering of potentially terms Digital a As and how thoughts into you marketing benefit just environment Markets ahead offer if you the for EU, marketing

Eric Hart

Yeah. Thanks a very question. environment. for dynamic the appreciate I it, Brian. It's

treaters we end. won't ball there's you where geography it that you international of necessarily imagine, But end it flowing if I DST to. consumer are negotiated. And the need that being will may We're and in that basis. tax Don't believe that pricing on can are As taxes are a ebbing building course crystal That if will the have per on up ultimately, only ones impacted be you a ultimately it. what impact the that They're paying it watching. and in we're we something will. ultimately, is

Washington. time it at spoken and that but very time ability on something I spending acquire to that to types our to, any And foresee so, detrimental I don't this is and a environment have Peter the relationships both impact customer we're of in dynamic

Operator

have Thank you. of Bank We of Justin America. now Post

question. with You may proceed your

Justin Post

been the overhang has disclosure think appreciate A the I questions of that last that. quarter. night other I around couple and Great. booked

what better those rates since your second, that so showing time leverage you on And what management the have as return team presumably get are And holding you. line? far, Board or group to changed on seen higher? frame the you've start you're So strategy? better to customers, is marketing the trying Thank

Peter Kern

say of how about state we obvious just of -- of you rates heard don't would really users I I have. the rate, Yeah. I'll much direct disclose which We members is repeat said what and couple but the app repeat so things. business a

repeat the rate base. continue that safe our lines customers headed build as it's value can think assume higher trend I we higher to you follow that's to these into So of where

want of in to supply. leverage product about term, Lloyd broadly time of we up for the effectiveness As the not but just the and marketing, the marketing asked to it's supply, effectiveness drive think frame, long I

into in right the efficiency again, moving All membership marketing the products of having the the play product them for the shelves, talked the high pieces a product about things on into And into right et cetera. converting and app we've those right part customer. all

an that again, we're do at spend, that and can fall the efficiently types as investing as way, customers. more there's a we Right as value. against book now And we together. of build our lot efficient value are in base that up, in all doing as that high look right So all that of we lifetime right customers in of now, pieces long interested

So we're sharper we it I best membership time, in customers the will as have, now those that app with pockets, we time. funnel finding into driving we that. right will blunt kinds very get and more happy on are the all the to level. get over of investing Over said sharper better instruments we at better as and we right of keep and and can on a granular But

we points – the can as into types not driving saying customers a converting getting we're the machine high-value better x to end that machine. long keep marketing we're And into – don't winning is of that. many think customer and want, of of of We're marketing. the there's I okay right as want the the base as customers we at So them saying have we basis XXXX by out pull drive long to

Eric Hart

add as And just sorry that can just I to – well quickly.

well. rolled at good recently. when launched announced and We're early And those. it's We're rates ramping very seeing that just strong as days, can seeing our open quite that customers uptake price new and drive great notifications tracking engagements and subsequently then travelers we relationships around positive return send is then it. conference what product out and for seeing. are up example we people our seeing the relatively that Just we we're rates and signing And with we've how products of one and couple some examples on a EXPLORE our of

that and course is first depth showing app of a the generate So can their that gives is multiplier – journey. relationship again, amount that customers us but that our it subsequently deepen of now of as tools new which then number the along transaction transactions imagine from that relationship customers you using with the way in those number customers an and have opportunities of we Peter the engaging out the and more have after we is we so member rolling that promise great can to are about more about increasing just a developed and multiplier ability we transactions. the are of our talked the which on being And

those number So customers for up us way. that wallet drive of of our a all increase the share or are ultimately profitable to and in adding of business

Justin Post

Maybe you. Great. Thank one follow-up.

maybe value higher is that from types that see do up different XXXX. related? timing Thank And if just take customers you. driving rates is wondering was or more You on of strategy the spend I hotels,

Eric Hart

numbers, higher the take would different mixed say about a a to number rates. in typical previous Hotel component Vrbo North America I talked relative think historical the got to You have on we've moving I of of there what seasonal parts. We've quarters. our But some is which

some itself of that few over also slightly given Vrbo have a We rate take decisions made the quarters. margins we've higher the last just on

less so so or from lodging more And air. that benefited margin revenue mix has

come that So about making That marketing talked But somewhat we're to the activities dynamic. as mean. I choices down to back that there promotional would way spend. along or not be necessarily just are that different revert expect to will to balancing with the continue as and Peter aggressive

– of higher. have the about good good of come about that level where we feel the We landed. They take feel back They but of because absolute is some to So mix. are down that some rates. expect should we

Justin Post

Thank you. Great.

Peter Kern

stronger look driving that And compared any than competitors being our is that you some driving of at was to And I ADRs, products. – think our says, as as customers, Eric ADR to think And think evidence driven just going of we the right the add quite we've I in right if what's I growth that's on strong part and at of less rate. sorry promotional. places. other going And in

Justin Post

Great. Thank you.

Eric Hart

you. Thank

Operator

soon go We Ron. Thank now have ahead you’re ready, Josey as you, Justin. Please Ron of Citi.

Ron Josey

you Can around this help follow for taking share us or Peter direct. over talk to question. how wanted has on your just the use the as evolved over just back web app up think we've shift to to and direct comments think time mobile mix the grabbing heard blunter us and and Great. and Thanks several between LTV. of term time instrument just I about maybe understand got times to today, we you mix moving I the upstream I talk I've

we to instruments Just looking Thank you. needs talk for? could to sharper? are LTV about attract What What these us more these how as be become to you customers? happen efficient

Peter Kern

Yes.

if not we brush, they're a brush, by by better. better. a performance we maybe value, goal emanate super on trying cetera. but So have know maybe of obviously, we've the perform a likely our underwrite now, can That way, Right instruments, those much customer et of some app to We lifetime channel, performed know, very come holy buying, they if best the we true basic is geo, you efficient both customers on find which value. more know, I difference all certain want actions take you have. that that know users And a specific, value, what finest sharp that be and that perform to lifetime as certain broad and is we can and customer's ultimately from don't grail higher every understanding they can much want and and in better. customers. you ideas, in much to to perform where is But -- the given brush they is have getting members understanding so indicate and our of and they fine product drive, granular people We the right

all have information, a of customers So all we want scope understanding to way. involves in our that common and that

tools. continue have in were because As they Orbitz blunt that name customers saying then, not aren't we've us data just get Vrbo us that fine, or They're or we our customers allow Expedia Hotels.com be our able talked it. to I'm a bunch hope high more silos, a not we level to to broad granular tools, to as or understand loyalty LTV as much continue consolidate personalization about many more have times, add to. And we we everybody customers customer files customers, good program, one to top as drivers into customers, and And we we more we as get were tools. customers you or that more someday will the data, will that, those as give consolidate we at on and events. as on will can of trigger essentially

as will lots better So, back willing there's That to and We're for in to grabbing longer-term give share, basically far get of in a said, different unprofitable kinds opportunity lot as short-term now, we're still buying that and as come. traffic time. it we mix of to to better doing I And direct, of general, good over but alluded shift traffic. gains. involves somewhat up stuff

short-term, much to, And into leaned whether been it's acquisition making As to to opportunities faster. where we Eric that cap technical short-term we've more more in there's a give the we trade-offs up alluded where something other in have involves value. transitions know and move again,

purchase. willing we've performance some up customer marketing the So highly incremental unprofitable, the do that, give historically of to been last and

getting as owned app going sign-ups at So the getting great, of what member at were through. that's sign-up. drive going able honed and as We never wanted being kind the to better of But do, downloads we've that understanding getting to owned we're faster. we sort been

we long make opportunity more -- now out time perform that more we we drive this can drive to into of every into term. get see then lifetime can value set we we them then high value they'll value more them okay, and So better, because acquire and activities these of better, get customers

ultimately talking can not are we see we that And And growth drive, opportunities. as back more these share. veins grabbing in about, and things looking veins drive for and grabbing perfect. terms that's will what where So back are drive, drive I'm share, of we more to to

Ron Josey

you, Thank Peter. Very, helpful.

Peter Kern

You, Ron Thanks, bet.

Operator

Thank go from you. Kelly I would be like to of hand back to ahead. Please -- our question final Oppenheimer. Jed will

Jed Kelly

me Thanks sneaking Great. for Hi. in.

that's Thank may. One, benefit Peter you. more if American over then two, two you higher you developing coming? seeing talk you're your Vrbo Just or strategies into around the potentially you stronger Can And gains your I from about you talk could that homes? next property North And managers just can year? your supply how base? US individual the mentioned, dollar, long-haul competitor. are given business Is largest that international about stronger coming where any

Peter Kern

take I'll one last first. the Sure.

gains those have of been So broad. sort

managers. with We very good have. We property presence have a always the

vein a for I in certainly, demand, in or where have where we're places is But them. drive driving more the properties know America, the work because supply them homeowners, us, successful of pretty a companies strong become we're properties to on the adding can adding think focused probably also homeowner approach, put can know supply already that But is we They working North acquire they're or system. the direct company. how partners preferred with at we systemic the with to those us the highest management performance into us. most been a Certainly, managers the more properties, for think are we of partner, and – our we great basis. really management I many for of we've what they

roof. any -- still. And are remarks U.S. my about planes US EMEA And that it's far airlift. So remains both as to then -- be whoever again as the XX% on EMEA the opening less right We're I I that. the of managing we're it's in owning to trying U.S. There's in right mentioned -- other. no, or one find you've veins. remains and would considerably in as XX%. haul seen markets, goes, down to happens And of the down all and if dollar prices have you say, kind to that there's think supply or are through Those the traveled I long

have airlines been I with there to sense the revenue But comes makes less and RevPAR that will run capacity over be So as time air content fairly which higher think mile. per demand. back

augurs strong continued want the seem still I travel. travel and given well for demand which to patterns in considerably dollar our being the U.S. travel think U.S. long-haul and strength international to

U.S. the and those in to strong for U.S. is is travel. what's much pricing good channels. is how there think only constraint sign dollar I a be just international really But going airlift definitely

that's always ours. a been So strong suit -- of and

the the opportunity. that that into dollar is hope optimistic with a with us. see working and we not how be we'll happens trade strong continues world, what now to the for right recessions XXXX, we're about around but or And So

Jed Kelly

Thank you.

Eric Hart

One on constant question is on your XXXX which as which given P&L all lot a question, did the quick thing our our to constant just to in think to weighting impacts might basis of FX market -- EBITDA it to our but this to well QX. or have time I adjust Yeah. currency currencies as be but would compared just U.S. X% if higher to we your been you call not a is didn't add in helpful necessarily we around spend

or So EBITDA. there in knockdown we've a got slight our detriment

would would EBITDA margins slightly the higher dollars on have of EBITDA had have well. as So we X% higher had quantum and

question, an your we've also opportunity think not strong well. all residents perspective into as quarter adjustments impacts dollar else sending again with So U.S. I some a Americans equal from marketing there's this got do or Europe, to a some or but

Jed Kelly

you. Thank

Eric Hart

you. Thank

Operator

concludes Thank you. today's That call.

may now You lines. your day. have nice a disconnect And

Expedia (EXPE) 5 Aug 222022 Q2 Earnings call transcript