Expedia Group, Inc. — Call Transcript 2026

I'm Mark Mahaney, part of the internet equity research team at Evercore ISI. I was telling Ariane I gave a commencement address this weekend, I mentioned AI, then I had to deal with hecklers. So I lost my voice shouting up, shouting over everybody for the next 30 minutes. It's good to be here, it's good to have you here, Ariane. This is, I think, your first public investor forum or conference. Second. Second. This is your first. It was my first with you. First. I don't care. This is your first public investor conference. I'm glad you decided to do your first one with Evercore. Yes. Thank you. Two years on the job now. That's right. Yeah. We've been relatively bullish. Last year you were one of our top picks. I've covered Expedia actually since the IPO. We've had a lot of management turnover at the company. A lot. It hasn't been necessarily a great thing. There may, for investors, there may be something much more investable now. I think there is. I want you to talk about that. We're going to go through a series of questions, and if anybody wants to jump in with questions in the end, please do. You've been there for two years now. You've talked about these three strategic pillars. Just explain that to us. You're pretty far into a turnaround. It's a relaunch. Let's do instead of turnaround, let's do relaunch. Let's talk about the relaunch of Expedia and what you've been able to do so far and what you want to do for the next two years. Sure. Well, first of all, thank you for inviting me. As you said, I've been two years now in the role, and when I stepped in, I really said to the team, "Look, we need to simplify, we need to focus, and we need to execute with discipline." We had come out of a platform transformation, and we were in a position where the consumer business wasn't growing the way we wanted it to. The B2B business was growing well, and it was a matter of how do you sustain that and how do you continue that growth. We came to three pillars. The first is create more traveler value, because if you're in a consumer business, the most important thing is what is the value you're creating for your customers? The second one was investing where we see the biggest opportunities for growth, the third was expanding margins. Let me talk about each one and sort of what we've done and what is still ahead. On the topic of driving more traveler value our consumer business has three big brands, Expedia, Hotels.com, and Vrbo. We started by sharpening the value propositions for each of them. Expedia is the one-stop shop where you can bundle and save, get great deals. There's a strong loyalty program, and it's really the one place you go to go places. Vrbo is the trusted pure-play vacation rental marketplace, and Hotels.com is the hotel pure play with a great loyalty program. It was strengthen those value propositions and then market them well, build products that support them, and have great supply. On the product, when you look at the work we've done in Expedia, it's driving up the attach rates. It's personalizing the product more. It goes from basic things like better uptime, site speed, checkout paths, kind of all of the e-commerce basics, to things like driving the attach rate, driving more trust in Vrbo. Trust is really important in the vacation rentals category. Making sure that with VrboCare, people trust that when they're on trip, they're going to get what they were expecting to. Of course, supply. Ultimately, people want great assortment and prices. We've done a lot of work in our loyalty program to have better member deals. If you take Vrbo, for example, until about a year ago, we didn't have a ton of promotions. Last year, we rolled out a Vrbo promotion suite, and in the first quarter, over 30% of our bookings were on partner-driven promotions. That was a lot of work in driving traveler value. What is ahead, and this is probably the number one thing I'm most excited about, is I really believe that using AI in our product is how we are going to be able to be true, personalized, and trusted travel agents for people. I'm sure we'll get into that later, but that's on that first pillar around traveler value. It's a lot about what are we going to do in AI in the product to make people want to keep on coming back to us directly, and whether it's for inspiration all the way down to booking and servicing. The second pillar was around investing in the fastest growth drivers or where we have the biggest opportunities. I think we've had 18 quarters in a row of healthy double-digit growth, we're continuing to invest to expand that. We're a leader in B2B. We've got great partner relationships, we've been expanding the offerings that we have. Not just hotel and vacation rental, but what are the other lines of business, like hotels or activities, that we can provide to our partners for them to build out their travel programs? Also, growth outside of North America because that's a place where our share isn't as high as it is in North America. With our consumer business having real focus on specific markets to say, how can we grow there? Our B2B business is bigger outside of North America, but we've really had a focused strategy for consumer. When I think about what's to come in that area of investing for growth, as I mentioned in B2B, we're growing these non-lodging lines of business. You may have seen in the last six months we've done an acquisition in activities, a small acquisition in car rental that we announced last week, and it's really about expanding the offering that we can provide to the partners we have and then adding more partners. In international, again, that's a big opportunity for us because we under-punch in our weight. The third pillar was about driving more productivity across the organization and expanding margins, which are two sides of the same coin. If you look in the last couple of years, in 2024, I believe that we expanded margins by about 50 basis points, last year by over about 240 basis points. This year our guide is 100 basis points-130 basis points, that really reflects the work we're doing across the P&L from how do you drive more revenue, how do you get more efficient on your cost of sales, how do we drive leverage in marketing and in overheads? Our management team is very committed to looking down the P&L and finding ways to drive more productivity while we're investing in the attractive things that I talked about earlier. Okay. You covered quite a lot. Well, let's dig into a few of those. I want to start with B2B, because that's, I guess, the most consistently impressive growth that you've been able to string together. Just talk again about the sustainability of that growth. I guess it's going into non-lodging lines of business and international expansion. Yeah. Maybe a little bit more on how you sustain that for another 18 quarters. Yeah, I would say, one, the way to think about B2B is the travel industry is over $3 trillion. If you look at our consumer business, last year was $85 billion, so there's a big gap there. About half of that is supplier direct or a couple of other big OTAs. There's still a huge amount of travel that happens in the world that our B2B business can go power. We think of it as how do you grow wallet share within our existing partners? It can be from adding new lines of business. It can be if our own partners are moving into new geographies or they're developing ideas to grow their business, how do we participate in that? It can be adding new customers. We signed a deal with Uber recently. We signed a deal with Bank of Montreal up in Canada. We're constantly going and looking at new businesses we can sign. It's just in general, what is all of the value that we can add to these B2B partners in various ways? I guess the core Expedia business, that seems to have required the least management attention, least turnaround. Is that right? Maybe it's externally that it seems like that. I mean look, I would say, for all three of our big brands, the challenge and opportunity has been to take the work that was done in a lot of our re-platforming, which was building these platform capabilities, and then bring them to bear in a way that makes sense for each of the brands. Expedia has such an amazing value proposition. This one place you go to go places, bundle and save, package deals, loyalty program. Maybe it seems like it required the least management attention because of maybe how we talk about it. It's got such a great existing customer business, a great value proposition. It's been amazing to see the work the team has done with better recommendations, with driving better attach, having travelers better understand the value proposition around packaging. A lot of work has gone into servicing. I think for those of us in the industry, we all know that certain lines of business have more complexity in service requirements than others. Brand Expedia cuts across all of them, we've done a lot of work in Expedia on servicing. Across our consumer businesses, we have over 30% of service that's self-serve. When someone does need to call us, how do we make sure there are short wait times, we're able to resolve things quickly? That also is then a driver of people repeating more directly. Let's talk about Vrbo. That seems to have been, and this is from externally, but it seems to be that's the one that you've most recently been able to kind of turn around, get back into growth. I think you talked about a $1 billion run rate now. What have been some of the drivers behind the recovery? Yeah. Modest growth at Vrbo, and how much better can you get that business? Yeah. One thing is, when I talked in the last earnings call about a billion-dollar run rate, it was vacation rentals on brand Expedia. Okay. We think about vacation rentals as a category. We can distribute it on Vrbo. We can distribute vacation rentals on Expedia or hotels.com or through our B2B business. One of the important things we did last year as we were building out Expedia as really the one-stop shop where you could get everything, was to better tune the way that we surfaced vacation rentals. That's where we're very proud that we got to a billion-dollar annual run rate. When it comes to Vrbo, the brand, which is a pure play vacation rental play, there's been a combination of things that have allowed it to get to growth that we're pleased with. One is the work I talked about earlier on supply, so we having more promotions, whether it's early bird promotions, long stay promotions, member deals if you are a Blue, Silver, or Gold member. Obviously making sure we have competitive and great pricing. There's been a lot of work around trust. What our research shows is that 70% of people when they're looking at a vacation rental are concerned about, is what I see actually going to be what I get? It's a bit different from when you're looking at a hotel where you may have more large brands. We've done work around trust. It's how to make sure that people can trust that what they're seeing in the listing is what they'll get, and then when they get to the property, that their experience is going to be what they expected. We launched a Guest Favorites badge. We increased the threshold for sort of our preferred, our premier hosts and our premier properties. We relaunched VrboCare. VrboCare is our proposition that basically says if something goes wrong in your stay or before the stay, we'll take care of you. It's all of these things together that drive trust in the traveler. You need to have the assortment, but you also need to have the trust. There's all the work in the product of just speed, uptime, better content, easier checkout, and all of the myriad things that any e-commerce company would do. The cherry on the cake, and this is one of my favorites, is that we rolled out something called Weather Promise. Weather Promise is basically, it's an offering where if it rains over a certain number of days during your holiday, you're going to get your money back. Really? Yeah. As you know, we're helping people not only make sure that they're going to get what they expected when they're in trip, but also, give them the ability to purchase something that will be an added protection. That's clever. I didn't know about that. All right. I want to ask you a couple of questions about AI. You mentioned already the Uber deal. Let's just touch on that briefly, the potential impact of the Uber deal, and why you decided to do the deal with them. Yep. First I'll start by saying what I had said earlier, which is the size of the overall travel market is massive and our consumer business is $85 billion, where there's a whole lot of travel that happens outside our consumer business, and this is where our B2B business comes in. The great thing is, the more demand we bring through B2B, the more value we bring to our supply partners. In one connection, they get access to our demand through our consumer brands as well as through our B2B business. When we sign a partner like Uber, obviously it gives us some incremental volume, but it also really helps our value proposition to the supply partners. When Uber decided that they wanted to add hotels to their app, they like any company went out and talked to a number of players, and we won the deal. I believe we won because we have a strong value proposition on our supply, on our technology, on our servicing. I mean, it's the full value proposition. Years ago we'd have all these internal debates about, well, is B2B incremental or not? I'd just keep on going back to the size of the overall market. Okay. All right. Let's touch on a topic that I know you haven't had much exposure to, AI. What is that? Yeah. In French, we say IA. IA. One of the two biggest overhangs on the stock and I think it's a very thoughtful overhang on the stock. What happens to the OTAs, particularly to you and Booking, as agentic commerce rolls out and hopefully it'd be a lot more developed than it is today. Just talk about this as a channel for you. How do you think about this risk? How do you think investors should think about the AI risk or opportunity to Expedia? Yep. I think about AI for us really in three ways. One is, what can we do with AI and our product to make it even more valuable for our travelers and partners? I'll come back and talk about that. I think there's a massive opportunity there, as I said, to be more personalized, trusted travel agents. The second is, how do we benefit from the changes in consumer behavior where they're starting searches in these new AI experiences? Which is part of, I think, what's behind your question. Yeah. Is agentic and these new services. I'll come to that. The third is, how do we use AI internally in the company to be faster, to be more responsive, and to drive efficiencies and productivity in our teams? Maybe I'll go to the second one first, because that was the start of your question, then I'll go back to one, which is the one I'm the most excited about. It is clear that people are starting more of their searches in AI search, whether it's in Gemini, in ChatGPT, in Claude, wherever that might be. Now, that traffic is still quite small. It's less than about 1.5% traffic. It's growing fast, but it's still quite small. We're doing a ton of work to make sure that our brands show up well there, and I think it's an incremental demand source for us. We're doing work in AEO and organic. We're doing work in paid. We're early with ChatGPT on their paid ads. I think to the extent that the top of the funnel is fragmenting a bit more, whether it's with ChatGPT and Claude or TikTok moving into travel advertising more meaningfully, that is an opportunity for us. The fact that we've been doing work over the last year in our marketing, being able to shift our marketing spend across channels based on a really good understanding of incrementality is really good timing for us. When you think about agentic, we have opened our apps for agents to be able to come in, because I want to experiment on everything. Again, it's a very small part of even that 1.5% that I was talking about. It's early days, but from what we can see, what the agents are doing is they're coming in and doing a bunch of discovery, but not going to the transaction. Again, I hesitate to draw too many conclusions from a small set of data, but I think what you're seeing is agents going in, probably checking prices, trying to get a bunch of information, but that people aren't yet comfortable allowing agents to actually make the transaction decision for them. Remember, travel tends to be higher ticket value, higher order value. There are a lot of different decisions to make at the time that you make the booking. If it's a hotel, what is the room type? What is the rate plan? Is it refundable? Is it non-refundable? There are so many different things that you don't necessarily want to delegate that to an agent. All up, I would just say it's early days. We're making sure that we're experimenting. We're present where we need to be present. We're doing the technology work to allow agents to come into us. I actually believe it's going to be the vertical agents, not the horizontal agents, that over time will be the ones that people trust the most. That's the second pillar. Do you want me to go into the first and why? Yes, please. Okay. Yeah. I'm talking for a long time, so to make sure that I'm not. No, you're doing great, Ariane. Thank you. The part about using AI in our product, again, is a massive opportunity. There's sort of invisible AI, which is the rankings and the sort order and the recommendations. When you buy a flight, what hotels are we proposing to you? There's a lot of AI that goes obviously behind that so that we're able to surface the things that based on what we know about you're most likely to transact on. There's type ahead. There are just a lot of things that are more invisible. There are the things that are more visible. The conversation agents. We just rolled out natural language search on Vrbo. If you go to the Vrbo homepage, I think it's about over 50% of traffic right now, you can toggle and search by saying, "You know what? I want to go to Tahoe the last week of July with eight people. I want a hot tub." We're automatically going to pre-fill the dates, the destination, and then when you get to the search results page, the content is going to be personalized based on your search, as will the results and the amenities and the filters and the like. What we're discovering through that is we get more than 60% more information about a traveler in that kind of search than we did before if someone just put in the destination. When you get that additional information, you're able to personalize even more. This is again why I keep on going back to, we'll be able to be more helpful to travelers to help them get from search to find to book in a faster way. It's important that, yes, there will be agents that can go do some of the transactions, but I think people often forget that people are often happiest when they're in the planning process. The idea that you want to allow an agent to do everything end to end, to me is there will be some trips that people want to do that with. Many trips, there's the joy of being able to plan, to collaborate with other people, to share. We need to use the technology to take the friction away from it, but allow people to still have the joy of it, and to do it in a place where they can then connect it directly to the booking and the servicing. That's really how I think about that first pillar. Then the third is all internal productivity. To the extent that we can move faster, that we can ship faster, it will allow us to innovate more for our travelers and partners. What we're trying to do as investors is figure out what you say makes a lot of sense. I think another word for AI is personalization. Yeah. There's a real opportunity here. We can only tell as investors, I guess we look at the top line- Yeah. Maybe see some acceleration or something and maybe see some margin expansion. What KPIs do you look at internally to figure out whether it actually is improving your products, your personalization, your book-to look ratio? Yeah. At the end of the day, I would think that there should be, maybe it's still on the come. Yeah. What are the right KPIs for you internally, whether or not you disclose them? It depends on which part of the business you're looking at. As I sort of said, there are some things that a traveler may not even know that it's AI behind it. Ranking and sort order or attach. We look very closely at are the algorithms that are behind the recommendations improving. It's a known way that you can look at the KPIs on that. When it comes to newer things like the Property Expert agent or AI Compare or even natural language search, we're still in such early days. The way I talk to the team about it is how quickly are we learning? What are we learning every day, every two days, every week? What is the content we're discovering that people want that we don't have? I think you can too quickly go immediately to the what is the conversion impact. It may be that what we're finding is people are coming to us and using our agents, where in the past they would've gone to some other AI experience. It might look like conversion is going down because we're seeing people more often, but it's just we're getting to play in more of the steps of the discovery process. That's why, any way you look at the data, you could make up your own story. I'm really focused on what is it that we're learning and how are we improving the product? We'll see down the road about conversion. What's a reasonable timeline for when this should all show up in our crude external financial metrics? Is this a 2027, "we're going to look back on 2027 and see we finally saw the real impact of personalization and AI"? I'm going to frustrate you because I'm not going to have an exact answer, but I think it's a gradual thing. I think like anything, this is why I talk to the team about brilliant basics and just it's like a day in, day out improving things. Over time, if we're doing the right work and it's paying off, we should see conversion getting better. Now, at the same time, if we're doing that, we should see more people coming to us, so that can impact the conversion numbers as well. I think ultimately it's how is the business growing and are we keeping our direct business, and are we just growing overall the consumer business? One specific thing on that, we've done two of these agentic travel reports, and we tried to track Expedia Romie. I think when we, and Georgia did most of the work on this, when we did this a year ago, we actually thought the best AI product for travel was Expedia Romie, and then it sort of seemed like you disappeared it a little bit. Yep. It could be that you've just taken a different approach to it and just wanted to, instead of having a separate named agent or whatever, just infused it throughout the process. Did I get that right? Is that what happened? Yeah, you did get that right. What we did was, by the way, you're right. I believe we were the first to integrate a chat experience with Romie. Yeah. It was two years ago. We put that out there. We tested a bunch. We learned. One of the things we learned is it's pretty tough to have one conversation experience that's going to cover everything, from inspiration to shopping, to booking, to servicing, all of that. What we realized is having point solutions, what we're calling these microagents, that you train to be really good at a specific thing, and that can show up at that moment, in the shopping funnel or in the journey, is going to be more useful to travelers. Right now, we're building a bunch of these microagents. We have Property Expert, AI Compare. We're going to have an Activity Planner. We've had a servicing agent for quite a while, and that's a really important one to be able to help travelers be able to self-service. Over time, we can build those all up into one agent. Again, our strategy is these microagents that help at any point in the journey. We have OpenAI presenting here later today. They've gone through a little bit of a change. It looked like maybe they were going to get into the booking or checkout process, and then they backtracked from that. I think there was some pretty underwhelming performance that they had from that early initiative. Doesn't mean they can't go back there. What's your sense? Is it clear to you that the OpenAIs, the Geminis of the world, want to work with you as lead generation partners rather than compete with you as booking agents? Yeah. Look, booking and servicing is complicated. There is catalog. There is making sure that you have constantly updated and accurate rates and availability. If someone tries to book something and it's not the price they expected or the booking doesn't go through, it's a problem. You have to be there to solve it for them. If something goes wrong afterwards, you need to be able to answer the phone or fix something in the product, so that people can make changes to their reservations. I would think it's an easier problem to solve around advertising and lead generation and a great traveler experience and then leave kind of the tough work of the booking and the servicing and the like to us. Now, I think, Mark, you've been in the industry for a while. I've been in the industry for a while. We've had for many years this discussion of where is the booking going to happen. Knowing the complexity of all of it, I'm not surprised that some of them have backed away from it. I've thought about the OTAs having two core competencies, supply aggregation and management and then optimizing different marketing channels. On the supply optimization, ChatGPT can know every single hotel and residence or whatever on the Amalfi Coast but doesn't know their availability. Doesn't know their availability, doesn't know their prices, is not able to go negotiate member deals with them, is not able to go do promotions. Hotels see us and others as a really great lever to be able to fill their hotels, to align with their revenue management strategy, yes, technology can help us with that, but there's a lot of relationship that goes in there of saying, "Okay, when are your need periods? How do we help you in your need periods?" That's an expertise that we have. On the marketing optimization. I think the thoughtful OTA concern or argument is they may not go and directly disintermediate OTAs, but those tools are becoming so broadly used. Over the last couple of years, you've had this increasing percentage of your traffic has been free. It's because of your loyalty programs, et cetera, and what's the risk that that reverses that? I could pitch this either way. Either you're diversifying your marketing channels, you're pretty good at doing that. Yep. More diversification, more better. I could say it's actually going to squeeze out, crowd out all of that free organic traffic. Help us resolve this. What I would say is what you're missing in all of that is how, by improving our product experiences, are we able for all the traffic to come into us, to have it convert, and then repeat directly. When we put these agents in place, when we become more personalized, are more people going to start their journey with us because they're confident that we have a great loyalty program, we have great rates and availability, and a great assortment, and in fact, Expedia is going to be able to help me plan my trip in a more effective way than it could before. I also want to come back to your statement, which was OTAs have been good on supply and then marketing optimization. Yeah. I would add for us, the B2B pillar, the fact that we've got over 70,000 partners that we have relationships with, that we have deep technology integrations with, that we understand the business of, that we are helping build travel programs, is an asset that I don't think is sufficiently appreciated. Sort of the value of that asset. Okay. By the way, do we already know that you're able to get more people to come directly to That one statement you just made about getting people to start there because your experience has become better? Well, what I would say is we have said publicly we have two-thirds of our bookings that start directly with us, and in fact, over time, I think that that's a great place to be because if you're more than two-thirds direct, then you're probably missing out on attracting new people from outside your ecosystem to then come in. To me, it's how do you grow both of them at the same time? Okay. You mentioned these three strategic pillars at the beginning, we sort of covered the first two, there's margin. All investors look at Expedia's margins, they can't help but compare them with Booking's margins. There's been this huge gap for a long period of time. Historically, I think it's for a variety of reasons, Booking has just been very good at marketing efficiency. You've started to narrow that gap. You started to climb it up a little bit. Just talk about sources of leverage going forward and do you somewhat close this gap, your operating margin gap versus Airbnb and Booking? Okay. I will start because Rob just slipped me a little note. I misspoke earlier when I talked about our full-year margin guide. It's 100-125 basis points. I don't know why I said 100-130. I just want to re-correct that. I'm not updating any kind of guidance here. Okay. Look, since I stepped in, we've expanded margins in 2024, 2025, 2026, as we continue to grow the business. I think it was 50 basis points in 2024, 240 basis points in 2025, we've got our guide. Yeah. For this year, this expansion, and it is really across all the lines in the P&L. Recently, we've had a lot of expansion coming from our consumer marketing, and that is a combination of using AI to have better creative, having better measurement capabilities, and understanding incrementality, and being able to sort of shift across channels. Again, as the product performs better, our marketing dollars should go further. Again, cost of sales, as we're able to automate things more, whether it's in servicing or even optimizing some of our cloud costs, we should be able to drive more expansion there. Overheads is another one. Since I've been in role, we've had a couple of overheads actions where we've reduced the size of our teams, and we're just constantly looking for opportunities there. It's balancing that with growth. In creating the capacity to be able to invest in growth while, I would say, in a systematic way, improving the margin profile of the company. Is getting leverage in consumer marketing a backhanded way of saying that prior Expedia management teams were poorly spending their marketing dollars? Well, I don't like to talk about the past in that way because probably a few years from now, someone will be on this stage, and you'll ask them the same question, and I'm hoping they won't say, "No, Ariane didn't do a good job." No, look, I think everyone does the deck of cards that they're dealt, you do the best job where you can. When you look at the 2021-2024 period in the consumer business, we were going through a lot of platform migrations. Yeah. We had just come out of COVID. It was really difficult to understand where was demand coming from, what was happening. We're in a place where we have the foundations in place to be able to have a better understanding of returns. It's true that I've been more demanding with the team on what do we expect to get in our channels. Okay. Help us interpret some of the changes you've had in the team. Yep. What's your approach? You've been with the company for 10 years now? 13 years. 13 years. You've watched a bunch of different management styles. You've come in, and I think you've had a different management style. Do you want to explain what that style is? You could explain from the outside, but no, I'm happy to say. I would say I'm someone I think people who know me would say, "Ariane is, she's an operator. She's very pragmatic." I have big ambition for the team. I always tell them they got to think big, but also be executing on the basics. It's sort of this constant pivot between what is the big picture that's going to take us to the long term, but also the short term. I've also focused the team a lot on what is the traveler value. Let's not get enamored with the platform that we're building and the technology we're doing. It's exciting, but what is the traveler value and what's the partner value? I think because I grew up in the company, in the B2B business, and working on the supply side of the business, I'm really attuned to basically what's happening outside in the market and how do we differentiate ourself from others. I think the other thing people who know me would say, 'Ariane is,' I have high expectations of myself and of the team. We need to have ambition. We need to be hungry. We need to think about what are the possibilities. Forget about what's happened in the past. What can we do in the future? If you look at sort of where the management team is now, we've got, over the last couple of years, a new head of technology, a new head of product, both of whom actually ran product and tech before, had experiences in various companies. I liked bringing in people who had experiences from outside of the travel sector and bar none, I would say, you look at our management team, we're a hungry team. We're ambitious. I think we want to go out there and win, and we're mission-driven in the sense that we get to be in a business that helps people connect in the real world, and that's a real purpose. We're also very competitive, and want to be successful in the marketplace. Okay. Five minutes, two more questions. Any comments at all on the overall travel demand in the market now? I think the Hilton CEO talked about some sort of C-shaped economy. I don't know what that is. He didn't want to do the K, it was the C. Look, I was still talking at our last earnings call about the K-shaped economy. Yeah. You certainly see more strength on the high end versus on the low end. That continues to be the case. In the U.S., there's a big summer ahead of us with the World Cup with U.S. 250. We're certainly keeping a close eye on what's going on. It's very public, the airlines that have taken some capacity out of the market, the pricing is going up. What we're focused on is how do we make sure that our marketplaces, our brands, and our B2B business has supply and offers at all price points. I guess what I'll try to ask you is, I don't know what a K to C means. Is that things getting better or are things getting worse? Would you comment one way or the other? I will stick by my K-shaped economy. K-shape. Okay. All right. It's not my K. It's the K-shaped economy. Yeah. Last question, just as how about the competitive mode or the differentiation question? It's funny that as people have talked about OTAs forever, it's like, well, what's the real competitive differentiation with a Booking at Expedia? You could book that, the Omni hotel room, you can book this 18 different ways, and yet there have only been two OTAs for 20 years now or something like that. Okay, Airbnb came in, but really there's only been two OTAs. I guess it's an easy business to enter, but a very difficult business to scale, something like that. Just talk about the competitive differentiation that Expedia has. Why is it that Expedia has just generally become bigger over time, and why there haven't been a bunch of other Expedias? Well, let me start at the company level, then I'll talk about the brand. At the company level, I think the real differentiator for Expedia Group is the diversified demand portfolio we have, where you've got the three big consumer brands, and you have a B2B business that accesses demand across corporate travel, offline retail, loyalty programs, airlines, hotel business, OTAs, and emerging markets. We're able to really get exposure to all of that demand. Then, as I said earlier, that allows us to bring more value to our supply partners, like hotels and airlines and the like, which in turn allows us to get better content, and it feeds the flywheel. I think both for our supply partners and even for investors, this idea that we are this diversified travel demand company is one thing. When it comes to the consumer business, Expedia, it's funny, we're the original super app in travel. We are the one place you go to go places, with car and air and hotel and vacation rentals and activities and really all of that. It's always been about packaging and bundling, and the loyalty program. I think the more scale you get, the more you can invest in great experiences and bringing more value to travelers. We continue to do that. Your question about why aren't other people doing it, as I said, the travel industry is massive, and there are a lot of people who will find where is their moat going to be in travel. You've got the financial institutions or credit card companies that will have travel programs. You have airlines that we will power the hotel part of their loyalty program because people want to use their airline loyalty points to book a hotel, and it doesn't make sense for them to go directly. I think that's actually what's exciting is that there are a lot of different places where travel can fit in, and our B2B business can power them. Yes, we work to make sure that each of our three big consumer brands has a clear value proposition. People know why they should come back and be loyal. The reality is, people book in a lot of different ways in travel, and we want to be present for all of them. That's great. All right. Ariane Gorin, CEO of Expedia Group, thank you very much. Thank you, Mark.

Speaker 2: I'm Mark Mahaney, part of the internet equity research team at Evercore ISI. I was telling Ariane I gave a commencement address this weekend, I mentioned AI, then I had to deal with hecklers. So I lost my voice shouting up, shouting over everybody for the next 30 minutes. It's good to be here, it's good to have you here, Ariane. This is, I think, your first public investor forum or conference. I'm Mark Mahaney, part of the internet equity research team at Evercore ISI. i'm mark mahaney part of the internet equity research team at evercore isi I was telling Ariane I gave a commencement address this weekend, I mentioned AI, then I had to deal with hecklers. i was telling ariane i gave a commencement address this weekend i mentioned ai then i had to deal with hecklers So I lost my voice shouting up, shouting over everybody for the next 30 minutes. so i lost my voice shouting up shouting over everybody for the next 30 minutes It's good to be here, it's good to have you here, Ariane. it's good to be here it's good to have you here ariane This is, I think, your first public investor forum or conference. this is i think your first public investor forum or conference

Speaker 1: Second. Second. second

Speaker 2: Second. This is your first. Second. second This is your first. this is your first

Speaker 1: It was my first with you. It was my first with you. it was my first with you

Speaker 2: First. I don't care. This is your first public investor conference. I'm glad you decided to do your first one with Evercore. First. first I don't care. i don't care This is your first public investor conference. this is your first public investor conference I'm glad you decided to do your first one with Evercore. i'm glad you decided to do your first one with evercore

Speaker 1: Yes. Yes. yes

Speaker 2: Thank you. Thank you. thank you

Speaker 1: Two years on the job now. Two years on the job now. two years on the job now

Speaker 2: That's right. Yeah. We've been relatively bullish. Last year you were one of our top picks. I've covered Expedia actually since the IPO. We've had a lot of management turnover at the company. A lot. It hasn't been necessarily a great thing. There may, for investors, there may be something much more investable now. I think there is. I want you to talk about that. We're going to go through a series of questions, and if anybody wants to jump in with questions in the end, please do. You've been there for two years now. You've talked about these three strategic pillars. Just explain that to us. You're pretty far into a turnaround. It's a relaunch. Let's do instead of turnaround, let's do relaunch. That's right. that's right Yeah. yeah We've been relatively bullish. we've been relatively bullish Last year you were one of our top picks. last year you were one of our top picks I've covered Expedia actually since the IPO. i've covered expedia actually since the ipo We've had a lot of management turnover at the company. we've had a lot of management turnover at the company A lot. a lot It hasn't been necessarily a great thing. it hasn't been necessarily a great thing There may, for investors, there may be something much more investable now. there may for investors there may be something much more investable now I think there is. i think there is I want you to talk about that. i want you to talk about that We're going to go through a series of questions, and if anybody wants to jump in with questions in the end, please do. we're going to go through a series of questions and if anybody wants to jump in with questions in the end please do You've been there for two years now. you've been there for two years now You've talked about these three strategic pillars. you've talked about these three strategic pillars Just explain that to us. just explain that to us You're pretty far into a turnaround. you're pretty far into a turnaround It's a relaunch. it's a relaunch Let's do instead of turnaround, let's do relaunch. let's do instead of turnaround let's do relaunch Let's talk about the relaunch of Expedia and what you've been able to do so far and what you want to do for the next two years. Let's talk about the relaunch of Expedia and what you've been able to do so far and what you want to do for the next two years. let's talk about the relaunch of expedia and what you've been able to do so far and what you want to do for the next two years

Speaker 1: Sure. Well, first of all, thank you for inviting me. As you said, I've been two years now in the role, and when I stepped in, I really said to the team, "Look, we need to simplify, we need to focus, and we need to execute with discipline." We had come out of a platform transformation, and we were in a position where the consumer business wasn't growing the way we wanted it to. The B2B business was growing well, and it was a matter of how do you sustain that and how do you continue that growth. We came to three pillars. The first is create more traveler value, because if you're in a consumer business, the most important thing is what is the value you're creating for your customers? Sure. sure Well, first of all, thank you for inviting me. well first of all thank you for inviting me As you said, I've been two years now in the role, and when I stepped in, I really said to the team, "Look, we need to simplify, we need to focus, and we need to execute with discipline." We had come out of a platform transformation, and we were in a position where the consumer business wasn't growing the way we wanted it to. as you said i've been two years now in the role and when i stepped in i really said to the team "look we need to simplify we need to focus and we need to execute with discipline." we had come out of a platform transformation and we were in a position where the consumer business wasn't growing the way we wanted it to The B2B business was growing well, and it was a matter of how do you sustain that and how do you continue that growth. the b2b business was growing well and it was a matter of how do you sustain that and how do you continue that growth We came to three pillars. we came to three pillars The first is create more traveler value, because if you're in a consumer business, the most important thing is what is the value you're creating for your customers? the first is create more traveler value because if you're in a consumer business the most important thing is what is the value you're creating for your customers The second one was investing where we see the biggest opportunities for growth, the third was expanding margins. Let me talk about each one and sort of what we've done and what is still ahead. On the topic of driving more traveler value our consumer business has three big brands, Expedia, Hotels.com, and Vrbo. We started by sharpening the value propositions for each of them. Expedia is the one-stop shop where you can bundle and save, get great deals. There's a strong loyalty program, and it's really the one place you go to go places. Vrbo is the trusted pure-play vacation rental marketplace, and Hotels.com is the hotel pure play with a great loyalty program. It was strengthen those value propositions and then market them well, build products that support them, and have great supply. The second one was investing where we see the biggest opportunities for growth, the third was expanding margins. the second one was investing where we see the biggest opportunities for growth the third was expanding margins Let me talk about each one and sort of what we've done and what is still ahead. let me talk about each one and sort of what we've done and what is still ahead On the topic of driving more traveler value our consumer business has three big brands, Expedia, Hotels.com, and Vrbo. on the topic of driving more traveler value our consumer business has three big brands expedia hotels.com and vrbo We started by sharpening the value propositions for each of them. we started by sharpening the value propositions for each of them Expedia is the one-stop shop where you can bundle and save, get great deals. expedia is the one-stop shop where you can bundle and save get great deals There's a strong loyalty program, and it's really the one place you go to go places. there's a strong loyalty program and it's really the one place you go to go places Vrbo is the trusted pure-play vacation rental marketplace, and Hotels.com is the hotel pure play with a great loyalty program. vrbo is the trusted pure-play vacation rental marketplace and hotels.com is the hotel pure play with a great loyalty program It was strengthen those value propositions and then market them well, build products that support them, and have great supply. it was strengthen those value propositions and then market them well build products that support them and have great supply On the product, when you look at the work we've done in Expedia, it's driving up the attach rates. It's personalizing the product more. It goes from basic things like better uptime, site speed, checkout paths, kind of all of the e-commerce basics, to things like driving the attach rate, driving more trust in Vrbo. Trust is really important in the vacation rentals category. Making sure that with VrboCare, people trust that when they're on trip, they're going to get what they were expecting to. Of course, supply. Ultimately, people want great assortment and prices. We've done a lot of work in our loyalty program to have better member deals. If you take Vrbo, for example, until about a year ago, we didn't have a ton of promotions. On the product, when you look at the work we've done in Expedia, it's driving up the attach rates. on the product when you look at the work we've done in expedia it's driving up the attach rates It's personalizing the product more. it's personalizing the product more It goes from basic things like better uptime, site speed, checkout paths, kind of all of the e-commerce basics, to things like driving the attach rate, driving more trust in Vrbo. it goes from basic things like better uptime site speed checkout paths kind of all of the e-commerce basics to things like driving the attach rate driving more trust in vrbo Trust is really important in the vacation rentals category. trust is really important in the vacation rentals category Making sure that with VrboCare, people trust that when they're on trip, they're going to get what they were expecting to. making sure that with vrbocare people trust that when they're on trip they're going to get what they were expecting to Of course, supply. of course supply Ultimately, people want great assortment and prices. ultimately people want great assortment and prices We've done a lot of work in our loyalty program to have better member deals. we've done a lot of work in our loyalty program to have better member deals If you take Vrbo, for example, until about a year ago, we didn't have a ton of promotions. if you take vrbo for example until about a year ago we didn't have a ton of promotions Last year, we rolled out a Vrbo promotion suite, and in the first quarter, over 30% of our bookings were on partner-driven promotions. That was a lot of work in driving traveler value. What is ahead, and this is probably the number one thing I'm most excited about, is I really believe that using AI in our product is how we are going to be able to be true, personalized, and trusted travel agents for people. I'm sure we'll get into that later, but that's on that first pillar around traveler value. It's a lot about what are we going to do in AI in the product to make people want to keep on coming back to us directly, and whether it's for inspiration all the way down to booking and servicing. Last year, we rolled out a Vrbo promotion suite, and in the first quarter, over 30% of our bookings were on partner-driven promotions. last year we rolled out a vrbo promotion suite and in the first quarter over 30% of our bookings were on partner-driven promotions That was a lot of work in driving traveler value. that was a lot of work in driving traveler value What is ahead, and this is probably the number one thing I'm most excited about, is I really believe that using AI in our product is how we are going to be able to be true, personalized, and trusted travel agents for people. what is ahead and this is probably the number one thing i'm most excited about is i really believe that using ai in our product is how we are going to be able to be true personalized and trusted travel agents for people I'm sure we'll get into that later, but that's on that first pillar around traveler value. i'm sure we'll get into that later but that's on that first pillar around traveler value It's a lot about what are we going to do in AI in the product to make people want to keep on coming back to us directly, and whether it's for inspiration all the way down to booking and servicing. it's a lot about what are we going to do in ai in the product to make people want to keep on coming back to us directly and whether it's for inspiration all the way down to booking and servicing The second pillar was around investing in the fastest growth drivers or where we have the biggest opportunities. I think we've had 18 quarters in a row of healthy double-digit growth, we're continuing to invest to expand that. We're a leader in B2B. We've got great partner relationships, we've been expanding the offerings that we have. Not just hotel and vacation rental, but what are the other lines of business, like hotels or activities, that we can provide to our partners for them to build out their travel programs? Also, growth outside of North America because that's a place where our share isn't as high as it is in North America. With our consumer business having real focus on specific markets to say, how can we grow there? The second pillar was around investing in the fastest growth drivers or where we have the biggest opportunities. the second pillar was around investing in the fastest growth drivers or where we have the biggest opportunities I think we've had 18 quarters in a row of healthy double-digit growth, we're continuing to invest to expand that. i think we've had 18 quarters in a row of healthy double-digit growth we're continuing to invest to expand that We're a leader in B2B. we're a leader in b2b We've got great partner relationships, we've been expanding the offerings that we have. we've got great partner relationships we've been expanding the offerings that we have Not just hotel and vacation rental, but what are the other lines of business, like hotels or activities, that we can provide to our partners for them to build out their travel programs? not just hotel and vacation rental but what are the other lines of business like hotels or activities that we can provide to our partners for them to build out their travel programs Also, growth outside of North America because that's a place where our share isn't as high as it is in North America. also growth outside of north america because that's a place where our share isn't as high as it is in north america With our consumer business having real focus on specific markets to say, how can we grow there? with our consumer business having real focus on specific markets to say how can we grow there Our B2B business is bigger outside of North America, but we've really had a focused strategy for consumer. When I think about what's to come in that area of investing for growth, as I mentioned in B2B, we're growing these non-lodging lines of business. You may have seen in the last six months we've done an acquisition in activities, a small acquisition in car rental that we announced last week, and it's really about expanding the offering that we can provide to the partners we have and then adding more partners. In international, again, that's a big opportunity for us because we under-punch in our weight. The third pillar was about driving more productivity across the organization and expanding margins, which are two sides of the same coin. Our B2B business is bigger outside of North America, but we've really had a focused strategy for consumer. our b2b business is bigger outside of north america but we've really had a focused strategy for consumer When I think about what's to come in that area of investing for growth, as I mentioned in B2B, we're growing these non-lodging lines of business. when i think about what's to come in that area of investing for growth as i mentioned in b2b we're growing these non-lodging lines of business You may have seen in the last six months we've done an acquisition in activities, a small acquisition in car rental that we announced last week, and it's really about expanding the offering that we can provide to the partners we have and then adding more partners. you may have seen in the last six months we've done an acquisition in activities a small acquisition in car rental that we announced last week and it's really about expanding the offering that we can provide to the partners we have and then adding more partners In international, again, that's a big opportunity for us because we under-punch in our weight. in international again that's a big opportunity for us because we under-punch in our weight The third pillar was about driving more productivity across the organization and expanding margins, which are two sides of the same coin. the third pillar was about driving more productivity across the organization and expanding margins which are two sides of the same coin If you look in the last couple of years, in 2024, I believe that we expanded margins by about 50 basis points, last year by over about 240 basis points. This year our guide is 100 basis points-130 basis points, that really reflects the work we're doing across the P&L from how do you drive more revenue, how do you get more efficient on your cost of sales, how do we drive leverage in marketing and in overheads? Our management team is very committed to looking down the P&L and finding ways to drive more productivity while we're investing in the attractive things that I talked about earlier. If you look in the last couple of years, in 2024, I believe that we expanded margins by about 50 basis points, last year by over about 240 basis points. if you look in the last couple of years in 2024 i believe that we expanded margins by about 50 basis points last year by over about 240 basis points This year our guide is 100 basis points-130 basis points, that really reflects the work we're doing across the P&L from how do you drive more revenue, how do you get more efficient on your cost of sales, how do we drive leverage in marketing and in overheads? this year our guide is 100 basis points-130 basis points that really reflects the work we're doing across the p&l from how do you drive more revenue how do you get more efficient on your cost of sales how do we drive leverage in marketing and in overheads Our management team is very committed to looking down the P&L and finding ways to drive more productivity while we're investing in the attractive things that I talked about earlier. our management team is very committed to looking down the p&l and finding ways to drive more productivity while we're investing in the attractive things that i talked about earlier

Speaker 2: Okay. You covered quite a lot. Well, let's dig into a few of those. I want to start with B2B, because that's, I guess, the most consistently impressive growth that you've been able to string together. Just talk again about the sustainability of that growth. I guess it's going into non-lodging lines of business and international expansion. Okay. okay You covered quite a lot. you covered quite a lot Well, let's dig into a few of those. well let's dig into a few of those I want to start with B2B, because that's, I guess, the most consistently impressive growth that you've been able to string together. i want to start with b2b because that's i guess the most consistently impressive growth that you've been able to string together Just talk again about the sustainability of that growth. just talk again about the sustainability of that growth I guess it's going into non-lodging lines of business and international expansion. i guess it's going into non-lodging lines of business and international expansion

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Maybe a little bit more on how you sustain that for another 18 quarters. Maybe a little bit more on how you sustain that for another 18 quarters. maybe a little bit more on how you sustain that for another 18 quarters

Speaker 1: Yeah, I would say, one, the way to think about B2B is the travel industry is over $3 trillion. If you look at our consumer business, last year was $85 billion, so there's a big gap there. About half of that is supplier direct or a couple of other big OTAs. There's still a huge amount of travel that happens in the world that our B2B business can go power. We think of it as how do you grow wallet share within our existing partners? It can be from adding new lines of business. It can be if our own partners are moving into new geographies or they're developing ideas to grow their business, how do we participate in that? It can be adding new customers. We signed a deal with Uber recently. Yeah, I would say, one, the way to think about B2B is the travel industry is over $3 trillion. yeah i would say one the way to think about b2b is the travel industry is over $3 trillion If you look at our consumer business, last year was $85 billion, so there's a big gap there. if you look at our consumer business last year was $85 billion so there's a big gap there About half of that is supplier direct or a couple of other big OTAs. about half of that is supplier direct or a couple of other big otas There's still a huge amount of travel that happens in the world that our B2B business can go power. there's still a huge amount of travel that happens in the world that our b2b business can go power We think of it as how do you grow wallet share within our existing partners? we think of it as how do you grow wallet share within our existing partners It can be from adding new lines of business. it can be from adding new lines of business It can be if our own partners are moving into new geographies or they're developing ideas to grow their business, how do we participate in that? it can be if our own partners are moving into new geographies or they're developing ideas to grow their business how do we participate in that It can be adding new customers. it can be adding new customers We signed a deal with Uber recently. we signed a deal with uber recently We signed a deal with Bank of Montreal up in Canada. We're constantly going and looking at new businesses we can sign. It's just in general, what is all of the value that we can add to these B2B partners in various ways? We signed a deal with Bank of Montreal up in Canada. we signed a deal with bank of montreal up in canada We're constantly going and looking at new businesses we can sign. we're constantly going and looking at new businesses we can sign It's just in general, what is all of the value that we can add to these B2B partners in various ways? it's just in general what is all of the value that we can add to these b2b partners in various ways

Speaker 2: I guess the core Expedia business, that seems to have required the least management attention, least turnaround. Is that right? I guess the core Expedia business, that seems to have required the least management attention, least turnaround. i guess the core expedia business that seems to have required the least management attention least turnaround Is that right? is that right

Speaker 1: Maybe it's externally that it seems like that. I mean look, I would say, for all three of our big brands, the challenge and opportunity has been to take the work that was done in a lot of our re-platforming, which was building these platform capabilities, and then bring them to bear in a way that makes sense for each of the brands. Expedia has such an amazing value proposition. This one place you go to go places, bundle and save, package deals, loyalty program. Maybe it seems like it required the least management attention because of maybe how we talk about it. It's got such a great existing customer business, a great value proposition. It's been amazing to see the work the team has done with better recommendations, with driving better attach, having travelers better understand the value proposition around packaging. Maybe it's externally that it seems like that. maybe it's externally that it seems like that I mean look, I would say, for all three of our big brands, the challenge and opportunity has been to take the work that was done in a lot of our re-platforming, which was building these platform capabilities, and then bring them to bear in a way that makes sense for each of the brands. i mean look i would say for all three of our big brands the challenge and opportunity has been to take the work that was done in a lot of our re-platforming which was building these platform capabilities and then bring them to bear in a way that makes sense for each of the brands Expedia has such an amazing value proposition. expedia has such an amazing value proposition This one place you go to go places, bundle and save, package deals, loyalty program. this one place you go to go places bundle and save package deals loyalty program Maybe it seems like it required the least management attention because of maybe how we talk about it. maybe it seems like it required the least management attention because of maybe how we talk about it It's got such a great existing customer business, a great value proposition. it's got such a great existing customer business a great value proposition It's been amazing to see the work the team has done with better recommendations, with driving better attach, having travelers better understand the value proposition around packaging. it's been amazing to see the work the team has done with better recommendations with driving better attach having travelers better understand the value proposition around packaging A lot of work has gone into servicing. I think for those of us in the industry, we all know that certain lines of business have more complexity in service requirements than others. Brand Expedia cuts across all of them, we've done a lot of work in Expedia on servicing. Across our consumer businesses, we have over 30% of service that's self-serve. When someone does need to call us, how do we make sure there are short wait times, we're able to resolve things quickly? That also is then a driver of people repeating more directly. A lot of work has gone into servicing. a lot of work has gone into servicing I think for those of us in the industry, we all know that certain lines of business have more complexity in service requirements than others. i think for those of us in the industry we all know that certain lines of business have more complexity in service requirements than others Brand Expedia cuts across all of them, we've done a lot of work in Expedia on servicing. brand expedia cuts across all of them we've done a lot of work in expedia on servicing Across our consumer businesses, we have over 30% of service that's self-serve. across our consumer businesses we have over 30% of service that's self-serve When someone does need to call us, how do we make sure there are short wait times, we're able to resolve things quickly? when someone does need to call us how do we make sure there are short wait times we're able to resolve things quickly That also is then a driver of people repeating more directly. that also is then a driver of people repeating more directly

Speaker 2: Let's talk about Vrbo. That seems to have been, and this is from externally, but it seems to be that's the one that you've most recently been able to kind of turn around, get back into growth. I think you talked about a $1 billion run rate now. What have been some of the drivers behind the recovery? Let's talk about Vrbo. let's talk about vrbo That seems to have been, and this is from externally, but it seems to be that's the one that you've most recently been able to kind of turn around, get back into growth. that seems to have been and this is from externally but it seems to be that's the one that you've most recently been able to kind of turn around get back into growth I think you talked about a $1 billion run rate now. i think you talked about a $1 billion run rate now What have been some of the drivers behind the recovery? what have been some of the drivers behind the recovery

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Modest growth at Vrbo, and how much better can you get that business? Modest growth at Vrbo, and how much better can you get that business? modest growth at vrbo and how much better can you get that business

Speaker 1: Yeah. One thing is, when I talked in the last earnings call about a billion-dollar run rate, it was vacation rentals on brand Expedia. Yeah. yeah One thing is, when I talked in the last earnings call about a billion-dollar run rate, it was vacation rentals on brand Expedia. one thing is when i talked in the last earnings call about a billion-dollar run rate it was vacation rentals on brand expedia

Speaker 2: Okay. Okay. okay

Speaker 1: We think about vacation rentals as a category. We can distribute it on Vrbo. We can distribute vacation rentals on Expedia or hotels.com or through our B2B business. One of the important things we did last year as we were building out Expedia as really the one-stop shop where you could get everything, was to better tune the way that we surfaced vacation rentals. That's where we're very proud that we got to a billion-dollar annual run rate. When it comes to Vrbo, the brand, which is a pure play vacation rental play, there's been a combination of things that have allowed it to get to growth that we're pleased with. One is the work I talked about earlier on supply, so we having more promotions, whether it's early bird promotions, long stay promotions, member deals if you are a Blue, Silver, or Gold member. We think about vacation rentals as a category. we think about vacation rentals as a category We can distribute it on Vrbo. we can distribute it on vrbo We can distribute vacation rentals on Expedia or hotels.com or through our B2B business. we can distribute vacation rentals on expedia or hotels.com or through our b2b business One of the important things we did last year as we were building out Expedia as really the one-stop shop where you could get everything, was to better tune the way that we surfaced vacation rentals. one of the important things we did last year as we were building out expedia as really the one-stop shop where you could get everything was to better tune the way that we surfaced vacation rentals That's where we're very proud that we got to a billion-dollar annual run rate. that's where we're very proud that we got to a billion-dollar annual run rate When it comes to Vrbo, the brand, which is a pure play vacation rental play, there's been a combination of things that have allowed it to get to growth that we're pleased with. when it comes to vrbo the brand which is a pure play vacation rental play there's been a combination of things that have allowed it to get to growth that we're pleased with One is the work I talked about earlier on supply, so we having more promotions, whether it's early bird promotions, long stay promotions, member deals if you are a Blue, Silver, or Gold member. one is the work i talked about earlier on supply so we having more promotions whether it's early bird promotions long stay promotions member deals if you are a blue silver or gold member Obviously making sure we have competitive and great pricing. There's been a lot of work around trust. What our research shows is that 70% of people when they're looking at a vacation rental are concerned about, is what I see actually going to be what I get? It's a bit different from when you're looking at a hotel where you may have more large brands. We've done work around trust. It's how to make sure that people can trust that what they're seeing in the listing is what they'll get, and then when they get to the property, that their experience is going to be what they expected. We launched a Guest Favorites badge. We increased the threshold for sort of our preferred, our premier hosts and our premier properties. We relaunched VrboCare. Obviously making sure we have competitive and great pricing. obviously making sure we have competitive and great pricing There's been a lot of work around trust. there's been a lot of work around trust What our research shows is that 70% of people when they're looking at a vacation rental are concerned about, is what I see actually going to be what I get? what our research shows is that 70% of people when they're looking at a vacation rental are concerned about is what i see actually going to be what i get It's a bit different from when you're looking at a hotel where you may have more large brands. it's a bit different from when you're looking at a hotel where you may have more large brands We've done work around trust. we've done work around trust It's how to make sure that people can trust that what they're seeing in the listing is what they'll get, and then when they get to the property, that their experience is going to be what they expected. We launched a Guest Favorites badge. it's how to make sure that people can trust that what they're seeing in the listing is what they'll get and then when they get to the property that their experience is going to be what they expected. we launched a guest favorites badge We increased the threshold for sort of our preferred, our premier hosts and our premier properties. we increased the threshold for sort of our preferred our premier hosts and our premier properties We relaunched VrboCare. we relaunched vrbocare VrboCare is our proposition that basically says if something goes wrong in your stay or before the stay, we'll take care of you. It's all of these things together that drive trust in the traveler. You need to have the assortment, but you also need to have the trust. There's all the work in the product of just speed, uptime, better content, easier checkout, and all of the myriad things that any e-commerce company would do. The cherry on the cake, and this is one of my favorites, is that we rolled out something called Weather Promise. Weather Promise is basically, it's an offering where if it rains over a certain number of days during your holiday, you're going to get your money back. VrboCare is our proposition that basically says if something goes wrong in your stay or before the stay, we'll take care of you. vrbocare is our proposition that basically says if something goes wrong in your stay or before the stay we'll take care of you It's all of these things together that drive trust in the traveler. it's all of these things together that drive trust in the traveler You need to have the assortment, but you also need to have the trust. you need to have the assortment but you also need to have the trust There's all the work in the product of just speed, uptime, better content, easier checkout, and all of the myriad things that any e-commerce company would do. there's all the work in the product of just speed uptime better content easier checkout and all of the myriad things that any e-commerce company would do The cherry on the cake, and this is one of my favorites, is that we rolled out something called Weather Promise. the cherry on the cake and this is one of my favorites is that we rolled out something called weather promise Weather Promise is basically, it's an offering where if it rains over a certain number of days during your holiday, you're going to get your money back. weather promise is basically it's an offering where if it rains over a certain number of days during your holiday you're going to get your money back

Speaker 2: Really? Really? really

Speaker 1: Yeah. As you know, we're helping people not only make sure that they're going to get what they expected when they're in trip, but also, give them the ability to purchase something that will be an added protection. Yeah. yeah As you know, we're helping people not only make sure that they're going to get what they expected when they're in trip, but also, give them the ability to purchase something that will be an added protection. as you know we're helping people not only make sure that they're going to get what they expected when they're in trip but also give them the ability to purchase something that will be an added protection

Speaker 2: That's clever. I didn't know about that. All right. I want to ask you a couple of questions about AI. You mentioned already the Uber deal. Let's just touch on that briefly, the potential impact of the Uber deal, and why you decided to do the deal with them. That's clever. that's clever I didn't know about that. i didn't know about that All right. all right I want to ask you a couple of questions about AI. i want to ask you a couple of questions about ai You mentioned already the Uber deal. you mentioned already the uber deal Let's just touch on that briefly, the potential impact of the Uber deal, and why you decided to do the deal with them. let's just touch on that briefly the potential impact of the uber deal and why you decided to do the deal with them

Speaker 1: Yep. First I'll start by saying what I had said earlier, which is the size of the overall travel market is massive and our consumer business is $85 billion, where there's a whole lot of travel that happens outside our consumer business, and this is where our B2B business comes in. The great thing is, the more demand we bring through B2B, the more value we bring to our supply partners. In one connection, they get access to our demand through our consumer brands as well as through our B2B business. When we sign a partner like Uber, obviously it gives us some incremental volume, but it also really helps our value proposition to the supply partners. Yep. yep First I'll start by saying what I had said earlier, which is the size of the overall travel market is massive and our consumer business is $85 billion, where there's a whole lot of travel that happens outside our consumer business, and this is where our B2B business comes in. first i'll start by saying what i had said earlier which is the size of the overall travel market is massive and our consumer business is $85 billion where there's a whole lot of travel that happens outside our consumer business and this is where our b2b business comes in The great thing is, the more demand we bring through B2B, the more value we bring to our supply partners. the great thing is the more demand we bring through b2b the more value we bring to our supply partners In one connection, they get access to our demand through our consumer brands as well as through our B2B business. in one connection they get access to our demand through our consumer brands as well as through our b2b business When we sign a partner like Uber, obviously it gives us some incremental volume, but it also really helps our value proposition to the supply partners. when we sign a partner like uber obviously it gives us some incremental volume but it also really helps our value proposition to the supply partners When Uber decided that they wanted to add hotels to their app, they like any company went out and talked to a number of players, and we won the deal. I believe we won because we have a strong value proposition on our supply, on our technology, on our servicing. I mean, it's the full value proposition. Years ago we'd have all these internal debates about, well, is B2B incremental or not? I'd just keep on going back to the size of the overall market. When Uber decided that they wanted to add hotels to their app, they like any company went out and talked to a number of players, and we won the deal. when uber decided that they wanted to add hotels to their app they like any company went out and talked to a number of players and we won the deal I believe we won because we have a strong value proposition on our supply, on our technology, on our servicing. i believe we won because we have a strong value proposition on our supply on our technology on our servicing I mean, it's the full value proposition. i mean it's the full value proposition Years ago we'd have all these internal debates about, well, is B2B incremental or not? years ago we'd have all these internal debates about well is b2b incremental or not I'd just keep on going back to the size of the overall market. i'd just keep on going back to the size of the overall market

Speaker 2: Okay. All right. Let's touch on a topic that I know you haven't had much exposure to, AI. Okay. okay All right. all right Let's touch on a topic that I know you haven't had much exposure to, AI. let's touch on a topic that i know you haven't had much exposure to ai

Speaker 1: What is that? What is that? what is that

Speaker 2: Yeah. Yeah. yeah

Speaker 1: In French, we say IA. IA. In French, we say IA. in french we say ia IA. ia

Speaker 2: One of the two biggest overhangs on the stock and I think it's a very thoughtful overhang on the stock. What happens to the OTAs, particularly to you and Booking, as agentic commerce rolls out and hopefully it'd be a lot more developed than it is today. Just talk about this as a channel for you. How do you think about this risk? How do you think investors should think about the AI risk or opportunity to Expedia? One of the two biggest overhangs on the stock and I think it's a very thoughtful overhang on the stock. one of the two biggest overhangs on the stock and i think it's a very thoughtful overhang on the stock What happens to the OTAs, particularly to you and Booking, as agentic commerce rolls out and hopefully it'd be a lot more developed than it is today. what happens to the otas particularly to you and booking as agentic commerce rolls out and hopefully it'd be a lot more developed than it is today Just talk about this as a channel for you. just talk about this as a channel for you How do you think about this risk? how do you think about this risk How do you think investors should think about the AI risk or opportunity to Expedia? how do you think investors should think about the ai risk or opportunity to expedia

Speaker 1: Yep. I think about AI for us really in three ways. One is, what can we do with AI and our product to make it even more valuable for our travelers and partners? I'll come back and talk about that. I think there's a massive opportunity there, as I said, to be more personalized, trusted travel agents. The second is, how do we benefit from the changes in consumer behavior where they're starting searches in these new AI experiences? Which is part of, I think, what's behind your question. Yep. yep I think about AI for us really in three ways. i think about ai for us really in three ways One is, what can we do with AI and our product to make it even more valuable for our travelers and partners? one is what can we do with ai and our product to make it even more valuable for our travelers and partners I'll come back and talk about that. i'll come back and talk about that I think there's a massive opportunity there, as I said, to be more personalized, trusted travel agents. i think there's a massive opportunity there as i said to be more personalized trusted travel agents The second is, how do we benefit from the changes in consumer behavior where they're starting searches in these new AI experiences? the second is how do we benefit from the changes in consumer behavior where they're starting searches in these new ai experiences Which is part of, I think, what's behind your question. which is part of i think what's behind your question

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Is agentic and these new services. I'll come to that. The third is, how do we use AI internally in the company to be faster, to be more responsive, and to drive efficiencies and productivity in our teams? Maybe I'll go to the second one first, because that was the start of your question, then I'll go back to one, which is the one I'm the most excited about. It is clear that people are starting more of their searches in AI search, whether it's in Gemini, in ChatGPT, in Claude, wherever that might be. Now, that traffic is still quite small. It's less than about 1.5% traffic. It's growing fast, but it's still quite small. We're doing a ton of work to make sure that our brands show up well there, and I think it's an incremental demand source for us. Is agentic and these new services. is agentic and these new services I'll come to that. i'll come to that The third is, how do we use AI internally in the company to be faster, to be more responsive, and to drive efficiencies and productivity in our teams? the third is how do we use ai internally in the company to be faster to be more responsive and to drive efficiencies and productivity in our teams Maybe I'll go to the second one first, because that was the start of your question, then I'll go back to one, which is the one I'm the most excited about. maybe i'll go to the second one first because that was the start of your question then i'll go back to one which is the one i'm the most excited about It is clear that people are starting more of their searches in AI search, whether it's in Gemini, in ChatGPT, in Claude, wherever that might be. it is clear that people are starting more of their searches in ai search whether it's in gemini in chatgpt in claude wherever that might be Now, that traffic is still quite small. now that traffic is still quite small It's less than about 1.5% traffic. it's less than about 1.5% traffic It's growing fast, but it's still quite small. it's growing fast but it's still quite small We're doing a ton of work to make sure that our brands show up well there, and I think it's an incremental demand source for us. we're doing a ton of work to make sure that our brands show up well there and i think it's an incremental demand source for us We're doing work in AEO and organic. We're doing work in paid. We're early with ChatGPT on their paid ads. I think to the extent that the top of the funnel is fragmenting a bit more, whether it's with ChatGPT and Claude or TikTok moving into travel advertising more meaningfully, that is an opportunity for us. The fact that we've been doing work over the last year in our marketing, being able to shift our marketing spend across channels based on a really good understanding of incrementality is really good timing for us. When you think about agentic, we have opened our apps for agents to be able to come in, because I want to experiment on everything. Again, it's a very small part of even that 1.5% that I was talking about. We're doing work in AEO and organic. we're doing work in aeo and organic We're doing work in paid. we're doing work in paid We're early with ChatGPT on their paid ads. we're early with chatgpt on their paid ads I think to the extent that the top of the funnel is fragmenting a bit more, whether it's with ChatGPT and Claude or TikTok moving into travel advertising more meaningfully, that is an opportunity for us. i think to the extent that the top of the funnel is fragmenting a bit more whether it's with chatgpt and claude or tiktok moving into travel advertising more meaningfully that is an opportunity for us The fact that we've been doing work over the last year in our marketing, being able to shift our marketing spend across channels based on a really good understanding of incrementality is really good timing for us. the fact that we've been doing work over the last year in our marketing being able to shift our marketing spend across channels based on a really good understanding of incrementality is really good timing for us When you think about agentic, we have opened our apps for agents to be able to come in, because I want to experiment on everything. when you think about agentic we have opened our apps for agents to be able to come in because i want to experiment on everything Again, it's a very small part of even that 1.5% that I was talking about. again it's a very small part of even that 1.5% that i was talking about It's early days, but from what we can see, what the agents are doing is they're coming in and doing a bunch of discovery, but not going to the transaction. Again, I hesitate to draw too many conclusions from a small set of data, but I think what you're seeing is agents going in, probably checking prices, trying to get a bunch of information, but that people aren't yet comfortable allowing agents to actually make the transaction decision for them. Remember, travel tends to be higher ticket value, higher order value. There are a lot of different decisions to make at the time that you make the booking. If it's a hotel, what is the room type? What is the rate plan? Is it refundable? Is it non-refundable? There are so many different things that you don't necessarily want to delegate that to an agent. It's early days, but from what we can see, what the agents are doing is they're coming in and doing a bunch of discovery, but not going to the transaction. it's early days but from what we can see what the agents are doing is they're coming in and doing a bunch of discovery but not going to the transaction Again, I hesitate to draw too many conclusions from a small set of data, but I think what you're seeing is agents going in, probably checking prices, trying to get a bunch of information, but that people aren't yet comfortable allowing agents to actually make the transaction decision for them. again i hesitate to draw too many conclusions from a small set of data but i think what you're seeing is agents going in probably checking prices trying to get a bunch of information but that people aren't yet comfortable allowing agents to actually make the transaction decision for them Remember, travel tends to be higher ticket value, higher order value. remember travel tends to be higher ticket value, higher order value There are a lot of different decisions to make at the time that you make the booking. there are a lot of different decisions to make at the time that you make the booking If it's a hotel, what is the room type? if it's a hotel what is the room type What is the rate plan? what is the rate plan Is it refundable? is it refundable Is it non-refundable? is it non-refundable There are so many different things that you don't necessarily want to delegate that to an agent. there are so many different things that you don't necessarily want to delegate that to an agent All up, I would just say it's early days. We're making sure that we're experimenting. We're present where we need to be present. We're doing the technology work to allow agents to come into us. I actually believe it's going to be the vertical agents, not the horizontal agents, that over time will be the ones that people trust the most. That's the second pillar. Do you want me to go into the first and why? All up, I would just say it's early days. all up i would just say it's early days We're making sure that we're experimenting. we're making sure that we're experimenting We're present where we need to be present. we're present where we need to be present We're doing the technology work to allow agents to come into us. we're doing the technology work to allow agents to come into us I actually believe it's going to be the vertical agents, not the horizontal agents, that over time will be the ones that people trust the most. i actually believe it's going to be the vertical agents not the horizontal agents that over time will be the ones that people trust the most That's the second pillar. that's the second pillar Do you want me to go into the first and why? do you want me to go into the first and why

Speaker 2: Yes, please. Yes, please. yes please

Speaker 1: Okay. Okay. okay

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I'm talking for a long time, so to make sure that I'm not. I'm talking for a long time, so to make sure that I'm not. i'm talking for a long time so to make sure that i'm not

Speaker 2: No, you're doing great, Ariane. Thank you. No, you're doing great, Ariane. no you're doing great ariane Thank you. thank you

Speaker 1: The part about using AI in our product, again, is a massive opportunity. There's sort of invisible AI, which is the rankings and the sort order and the recommendations. When you buy a flight, what hotels are we proposing to you? There's a lot of AI that goes obviously behind that so that we're able to surface the things that based on what we know about you're most likely to transact on. There's type ahead. There are just a lot of things that are more invisible. There are the things that are more visible. The conversation agents. We just rolled out natural language search on Vrbo. If you go to the Vrbo homepage, I think it's about over 50% of traffic right now, you can toggle and search by saying, "You know what? The part about using AI in our product, again, is a massive opportunity. the part about using ai in our product again is a massive opportunity There's sort of invisible AI, which is the rankings and the sort order and the recommendations. there's sort of invisible ai which is the rankings and the sort order and the recommendations When you buy a flight, what hotels are we proposing to you? when you buy a flight what hotels are we proposing to you There's a lot of AI that goes obviously behind that so that we're able to surface the things that based on what we know about you're most likely to transact on. there's a lot of ai that goes obviously behind that so that we're able to surface the things that based on what we know about you're most likely to transact on There's type ahead. there's type ahead There are just a lot of things that are more invisible. there are just a lot of things that are more invisible There are the things that are more visible. there are the things that are more visible The conversation agents. the conversation agents We just rolled out natural language search on Vrbo. we just rolled out natural language search on vrbo If you go to the Vrbo homepage, I think it's about over 50% of traffic right now, you can toggle and search by saying, "You know what? if you go to the vrbo homepage i think it's about over 50% of traffic right now you can toggle and search by saying "you know what I want to go to Tahoe the last week of July with eight people. I want a hot tub." We're automatically going to pre-fill the dates, the destination, and then when you get to the search results page, the content is going to be personalized based on your search, as will the results and the amenities and the filters and the like. What we're discovering through that is we get more than 60% more information about a traveler in that kind of search than we did before if someone just put in the destination. When you get that additional information, you're able to personalize even more. This is again why I keep on going back to, we'll be able to be more helpful to travelers to help them get from search to find to book in a faster way. I want to go to Tahoe the last week of July with eight people. i want to go to tahoe the last week of july with eight people I want a hot tub." We're automatically going to pre-fill the dates, the destination, and then when you get to the search results page, the content is going to be personalized based on your search, as will the results and the amenities and the filters and the like. i want a hot tub." we're automatically going to pre-fill the dates the destination and then when you get to the search results page the content is going to be personalized based on your search as will the results and the amenities and the filters and the like What we're discovering through that is we get more than 60% more information about a traveler in that kind of search than we did before if someone just put in the destination. what we're discovering through that is we get more than 60% more information about a traveler in that kind of search than we did before if someone just put in the destination When you get that additional information, you're able to personalize even more. when you get that additional information you're able to personalize even more This is again why I keep on going back to, we'll be able to be more helpful to travelers to help them get from search to find to book in a faster way. this is again why i keep on going back to we'll be able to be more helpful to travelers to help them get from search to find to book in a faster way It's important that, yes, there will be agents that can go do some of the transactions, but I think people often forget that people are often happiest when they're in the planning process. The idea that you want to allow an agent to do everything end to end, to me is there will be some trips that people want to do that with. Many trips, there's the joy of being able to plan, to collaborate with other people, to share. We need to use the technology to take the friction away from it, but allow people to still have the joy of it, and to do it in a place where they can then connect it directly to the booking and the servicing. That's really how I think about that first pillar. Then the third is all internal productivity. It's important that, yes, there will be agents that can go do some of the transactions, but I think people often forget that people are often happiest when they're in the planning process. it's important that yes there will be agents that can go do some of the transactions but i think people often forget that people are often happiest when they're in the planning process The idea that you want to allow an agent to do everything end to end, to me is there will be some trips that people want to do that with. the idea that you want to allow an agent to do everything end to end to me is there will be some trips that people want to do that with Many trips, there's the joy of being able to plan, to collaborate with other people, to share. many trips there's the joy of being able to plan to collaborate with other people to share We need to use the technology to take the friction away from it, but allow people to still have the joy of it, and to do it in a place where they can then connect it directly to the booking and the servicing. we need to use the technology to take the friction away from it but allow people to still have the joy of it and to do it in a place where they can then connect it directly to the booking and the servicing That's really how I think about that first pillar. that's really how i think about that first pillar Then the third is all internal productivity. then the third is all internal productivity To the extent that we can move faster, that we can ship faster, it will allow us to innovate more for our travelers and partners. To the extent that we can move faster, that we can ship faster, it will allow us to innovate more for our travelers and partners. to the extent that we can move faster that we can ship faster it will allow us to innovate more for our travelers and partners

Speaker 2: What we're trying to do as investors is figure out what you say makes a lot of sense. I think another word for AI is personalization. What we're trying to do as investors is figure out what you say makes a lot of sense. what we're trying to do as investors is figure out what you say makes a lot of sense I think another word for AI is personalization. i think another word for ai is personalization

Speaker 1: Yeah. Yeah. yeah

Speaker 2: There's a real opportunity here. We can only tell as investors, I guess we look at the top line- There's a real opportunity here. there's a real opportunity here We can only tell as investors, I guess we look at the top line- we can only tell as investors i guess we look at the top line-

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Maybe see some acceleration or something and maybe see some margin expansion. What KPIs do you look at internally to figure out whether it actually is improving your products, your personalization, your book-to look ratio? Maybe see some acceleration or something and maybe see some margin expansion. maybe see some acceleration or something and maybe see some margin expansion What KPIs do you look at internally to figure out whether it actually is improving your products, your personalization, your book- to look ratio? what kpis do you look at internally to figure out whether it actually is improving your products your personalization your book- to look ratio

Speaker 1: Yeah. Yeah. yeah

Speaker 2: At the end of the day, I would think that there should be, maybe it's still on the come. At the end of the day, I would think that there should be, maybe it's still on the come. at the end of the day i would think that there should be maybe it's still on the come

Speaker 1: Yeah. Yeah. yeah

Speaker 2: What are the right KPIs for you internally, whether or not you disclose them? What are the right KPIs for you internally, whether or not you disclose them? what are the right kpis for you internally whether or not you disclose them

Speaker 1: It depends on which part of the business you're looking at. As I sort of said, there are some things that a traveler may not even know that it's AI behind it. Ranking and sort order or attach. We look very closely at are the algorithms that are behind the recommendations improving. It's a known way that you can look at the KPIs on that. When it comes to newer things like the Property Expert agent or AI Compare or even natural language search, we're still in such early days. The way I talk to the team about it is how quickly are we learning? What are we learning every day, every two days, every week? What is the content we're discovering that people want that we don't have? I think you can too quickly go immediately to the what is the conversion impact. It depends on which part of the business you're looking at. it depends on which part of the business you're looking at As I sort of said, there are some things that a traveler may not even know that it's AI behind it. as i sort of said there are some things that a traveler may not even know that it's ai behind it Ranking and sort order or attach. ranking and sort order or attach We look very closely at are the algorithms that are behind the recommendations improving. we look very closely at are the algorithms that are behind the recommendations improving It's a known way that you can look at the KPIs on that. it's a known way that you can look at the kpis on that When it comes to newer things like the Property Expert agent or AI Compare or even natural language search, we're still in such early days. when it comes to newer things like the property expert agent or ai compare or even natural language search we're still in such early days The way I talk to the team about it is how quickly are we learning? the way i talk to the team about it is how quickly are we learning What are we learning every day, every two days, every week? what are we learning every day every two days every week What is the content we're discovering that people want that we don't have? what is the content we're discovering that people want that we don't have I think you can too quickly go immediately to the what is the conversion impact. i think you can too quickly go immediately to the what is the conversion impact It may be that what we're finding is people are coming to us and using our agents, where in the past they would've gone to some other AI experience. It might look like conversion is going down because we're seeing people more often, but it's just we're getting to play in more of the steps of the discovery process. That's why, any way you look at the data, you could make up your own story. I'm really focused on what is it that we're learning and how are we improving the product? We'll see down the road about conversion. It may be that what we're finding is people are coming to us and using our agents, where in the past they would've gone to some other AI experience. it may be that what we're finding is people are coming to us and using our agents where in the past they would've gone to some other ai experience It might look like conversion is going down because we're seeing people more often, but it's just we're getting to play in more of the steps of the discovery process. it might look like conversion is going down because we're seeing people more often but it's just we're getting to play in more of the steps of the discovery process That's why, any way you look at the data, you could make up your own story. that's why any way you look at the data you could make up your own story I'm really focused on what is it that we're learning and how are we improving the product? i'm really focused on what is it that we're learning and how are we improving the product We'll see down the road about conversion. we'll see down the road about conversion

Speaker 2: What's a reasonable timeline for when this should all show up in our crude external financial metrics? Is this a 2027, "we're going to look back on 2027 and see we finally saw the real impact of personalization and AI"? What's a reasonable timeline for when this should all show up in our crude external financial metrics? what's a reasonable timeline for when this should all show up in our crude external financial metrics Is this a 2027, "we're going to look back on 2027 and see we finally saw the real impact of personalization and AI"? is this a 2027 "we're going to look back on 2027 and see we finally saw the real impact of personalization and ai"

Speaker 1: I'm going to frustrate you because I'm not going to have an exact answer, but I think it's a gradual thing. I think like anything, this is why I talk to the team about brilliant basics and just it's like a day in, day out improving things. Over time, if we're doing the right work and it's paying off, we should see conversion getting better. Now, at the same time, if we're doing that, we should see more people coming to us, so that can impact the conversion numbers as well. I think ultimately it's how is the business growing and are we keeping our direct business, and are we just growing overall the consumer business? I'm going to frustrate you because I'm not going to have an exact answer, but I think it's a gradual thing. i'm going to frustrate you because i'm not going to have an exact answer but i think it's a gradual thing I think like anything, this is why I talk to the team about brilliant basics and just it's like a day in, day out improving things. i think like anything this is why i talk to the team about brilliant basics and just it's like a day in day out improving things Over time, if we're doing the right work and it's paying off, we should see conversion getting better. over time if we're doing the right work and it's paying off we should see conversion getting better Now, at the same time, if we're doing that, we should see more people coming to us, so that can impact the conversion numbers as well. now at the same time if we're doing that we should see more people coming to us so that can impact the conversion numbers as well I think ultimately it's how is the business growing and are we keeping our direct business, and are we just growing overall the consumer business? i think ultimately it's how is the business growing and are we keeping our direct business and are we just growing overall the consumer business

Speaker 2: One specific thing on that, we've done two of these agentic travel reports, and we tried to track Expedia Romie. I think when we, and Georgia did most of the work on this, when we did this a year ago, we actually thought the best AI product for travel was Expedia Romie, and then it sort of seemed like you disappeared it a little bit. One specific thing on that, we've done two of these agentic travel reports, and we tried to track Expedia Romie. one specific thing on that we've done two of these agentic travel reports and we tried to track expedia romie I think when we, and Georgia did most of the work on this, when we did this a year ago, we actually thought the best AI product for travel was Expedia Romie, and then it sort of seemed like you disappeared it a little bit. i think when we and georgia did most of the work on this when we did this a year ago we actually thought the best ai product for travel was expedia romie and then it sort of seemed like you disappeared it a little bit

Speaker 1: Yep. Yep. yep

Speaker 2: It could be that you've just taken a different approach to it and just wanted to, instead of having a separate named agent or whatever, just infused it throughout the process. Did I get that right? Is that what happened? It could be that you've just taken a different approach to it and just wanted to, instead of having a separate named agent or whatever, just infused it throughout the process. it could be that you've just taken a different approach to it and just wanted to instead of having a separate named agent or whatever just infused it throughout the process Did I get that right? did i get that right Is that what happened? is that what happened

Speaker 1: Yeah, you did get that right. What we did was, by the way, you're right. I believe we were the first to integrate a chat experience with Romie. Yeah, you did get that right. yeah you did get that right What we did was, by the way, you're right. what we did was by the way you're right I believe we were the first to integrate a chat experience with Romie. i believe we were the first to integrate a chat experience with romie

Speaker 2: Yeah. Yeah. yeah

Speaker 1: It was two years ago. We put that out there. We tested a bunch. We learned. One of the things we learned is it's pretty tough to have one conversation experience that's going to cover everything, from inspiration to shopping, to booking, to servicing, all of that. What we realized is having point solutions, what we're calling these microagents, that you train to be really good at a specific thing, and that can show up at that moment, in the shopping funnel or in the journey, is going to be more useful to travelers. Right now, we're building a bunch of these microagents. We have Property Expert, AI Compare. We're going to have an Activity Planner. We've had a servicing agent for quite a while, and that's a really important one to be able to help travelers be able to self-service. It was two years ago. it was two years ago We put that out there. we put that out there We tested a bunch. we tested a bunch We learned. we learned One of the things we learned is it's pretty tough to have one conversation experience that's going to cover everything, from inspiration to shopping, to booking, to servicing, all of that. one of the things we learned is it's pretty tough to have one conversation experience that's going to cover everything from inspiration to shopping to booking to servicing all of that What we realized is having point solutions, what we're calling these microagents, that you train to be really good at a specific thing, and that can show up at that moment, in the shopping funnel or in the journey, is going to be more useful to travelers. what we realized is having point solutions what we're calling these microagents that you train to be really good at a specific thing and that can show up at that moment in the shopping funnel or in the journey is going to be more useful to travelers Right now, we're building a bunch of these microagents. right now we're building a bunch of these microagents We have Property Expert, AI Compare. we have property expert ai compare We're going to have an Activity Planner. we're going to have an activity planner We've had a servicing agent for quite a while, and that's a really important one to be able to help travelers be able to self-service. we've had a servicing agent for quite a while and that's a really important one to be able to help travelers be able to self-service Over time, we can build those all up into one agent. Again, our strategy is these microagents that help at any point in the journey. Over time, we can build those all up into one agent. over time we can build those all up into one agent Again, our strategy is these microagents that help at any point in the journey. again our strategy is these microagents that help at any point in the journey

Speaker 2: We have OpenAI presenting here later today. They've gone through a little bit of a change. It looked like maybe they were going to get into the booking or checkout process, and then they backtracked from that. I think there was some pretty underwhelming performance that they had from that early initiative. Doesn't mean they can't go back there. What's your sense? Is it clear to you that the OpenAIs, the Geminis of the world, want to work with you as lead generation partners rather than compete with you as booking agents? We have OpenAI presenting here later today. we have openai presenting here later today They've gone through a little bit of a change. they've gone through a little bit of a change It looked like maybe they were going to get into the booking or checkout process, and then they backtracked from that. it looked like maybe they were going to get into the booking or checkout process and then they backtracked from that I think there was some pretty underwhelming performance that they had from that early initiative. i think there was some pretty underwhelming performance that they had from that early initiative Doesn't mean they can't go back there. doesn't mean they can't go back there What's your sense? what's your sense Is it clear to you that the OpenAIs, the Geminis of the world, want to work with you as lead generation partners rather than compete with you as booking agents? is it clear to you that the openais the geminis of the world want to work with you as lead generation partners rather than compete with you as booking agents

Speaker 1: Yeah. Look, booking and servicing is complicated. There is catalog. There is making sure that you have constantly updated and accurate rates and availability. If someone tries to book something and it's not the price they expected or the booking doesn't go through, it's a problem. You have to be there to solve it for them. If something goes wrong afterwards, you need to be able to answer the phone or fix something in the product, so that people can make changes to their reservations. I would think it's an easier problem to solve around advertising and lead generation and a great traveler experience and then leave kind of the tough work of the booking and the servicing and the like to us. Now, I think, Mark, you've been in the industry for a while. I've been in the industry for a while. Yeah. yeah Look, booking and servicing is complicated. look booking and servicing is complicated There is catalog. there is catalog There is making sure that you have constantly updated and accurate rates and availability. there is making sure that you have constantly updated and accurate rates and availability If someone tries to book something and it's not the price they expected or the booking doesn't go through, it's a problem. if someone tries to book something and it's not the price they expected or the booking doesn't go through it's a problem You have to be there to solve it for them. you have to be there to solve it for them If something goes wrong afterwards, you need to be able to answer the phone or fix something in the product, so that people can make changes to their reservations. if something goes wrong afterwards you need to be able to answer the phone or fix something in the product so that people can make changes to their reservations I would think it's an easier problem to solve around advertising and lead generation and a great traveler experience and then leave kind of the tough work of the booking and the servicing and the like to us. i would think it's an easier problem to solve around advertising and lead generation and a great traveler experience and then leave kind of the tough work of the booking and the servicing and the like to us Now, I think, Mark, you've been in the industry for a while. now i think mark you've been in the industry for a while I've been in the industry for a while. i've been in the industry for a while We've had for many years this discussion of where is the booking going to happen. Knowing the complexity of all of it, I'm not surprised that some of them have backed away from it. We've had for many years this discussion of where is the booking going to happen. we've had for many years this discussion of where is the booking going to happen Knowing the complexity of all of it, I'm not surprised that some of them have backed away from it. knowing the complexity of all of it i'm not surprised that some of them have backed away from it

Speaker 2: I've thought about the OTAs having two core competencies, supply aggregation and management and then optimizing different marketing channels. On the supply optimization, ChatGPT can know every single hotel and residence or whatever on the Amalfi Coast but doesn't know their availability. I've thought about the OTAs having two core competencies, supply aggregation and management and then optimizing different marketing channels. i've thought about the otas having two core competencies supply aggregation and management and then optimizing different marketing channels On the supply optimization, ChatGPT can know every single hotel and residence or whatever on the Amalfi Coast but doesn't know their availability. on the supply optimization chatgpt can know every single hotel and residence or whatever on the amalfi coast but doesn't know their availability

Speaker 1: Doesn't know their availability, doesn't know their prices, is not able to go negotiate member deals with them, is not able to go do promotions. Hotels see us and others as a really great lever to be able to fill their hotels, to align with their revenue management strategy, yes, technology can help us with that, but there's a lot of relationship that goes in there of saying, "Okay, when are your need periods? How do we help you in your need periods?" That's an expertise that we have. Doesn't know their availability, doesn't know their prices, is not able to go negotiate member deals with them, is not able to go do promotions. doesn't know their availability doesn't know their prices is not able to go negotiate member deals with them is not able to go do promotions Hotels see us and others as a really great lever to be able to fill their hotels, to align with their revenue management strategy, yes, technology can help us with that, but there's a lot of relationship that goes in there of saying, "Okay, when are your need periods? hotels see us and others as a really great lever to be able to fill their hotels to align with their revenue management strategy yes technology can help us with that but there's a lot of relationship that goes in there of saying "okay when are your need periods How do we help you in your need periods?" That's an expertise that we have. how do we help you in your need periods?" that's an expertise that we have

Speaker 2: On the marketing optimization. I think the thoughtful OTA concern or argument is they may not go and directly disintermediate OTAs, but those tools are becoming so broadly used. Over the last couple of years, you've had this increasing percentage of your traffic has been free. It's because of your loyalty programs, et cetera, and what's the risk that that reverses that? I could pitch this either way. Either you're diversifying your marketing channels, you're pretty good at doing that. On the marketing optimization. on the marketing optimization I think the thoughtful OTA concern or argument is they may not go and directly disintermediate OTAs, but those tools are becoming so broadly used. i think the thoughtful ota concern or argument is they may not go and directly disintermediate otas but those tools are becoming so broadly used Over the last couple of years, you've had this increasing percentage of your traffic has been free. over the last couple of years you've had this increasing percentage of your traffic has been free It's because of your loyalty programs, et cetera, and what's the risk that that reverses that? it's because of your loyalty programs et cetera and what's the risk that that reverses that I could pitch this either way. i could pitch this either way Either you're diversifying your marketing channels, you're pretty good at doing that. either you're diversifying your marketing channels you're pretty good at doing that

Speaker 1: Yep. Yep. yep

Speaker 2: More diversification, more better. I could say it's actually going to squeeze out, crowd out all of that free organic traffic. Help us resolve this. More diversification, more better. more diversification more better I could say it's actually going to squeeze out, crowd out all of that free organic traffic. i could say it's actually going to squeeze out crowd out all of that free organic traffic Help us resolve this. help us resolve this

Speaker 1: What I would say is what you're missing in all of that is how, by improving our product experiences, are we able for all the traffic to come into us, to have it convert, and then repeat directly. When we put these agents in place, when we become more personalized, are more people going to start their journey with us because they're confident that we have a great loyalty program, we have great rates and availability, and a great assortment, and in fact, Expedia is going to be able to help me plan my trip in a more effective way than it could before. I also want to come back to your statement, which was OTAs have been good on supply and then marketing optimization. What I would say is what you're missing in all of that is how, by improving our product experiences, are we able for all the traffic to come into us, to have it convert, and then repeat directly. what i would say is what you're missing in all of that is how by improving our product experiences are we able for all the traffic to come into us to have it convert and then repeat directly When we put these agents in place, when we become more personalized, are more people going to start their journey with us because they're confident that we have a great loyalty program, we have great rates and availability, and a great assortment, and in fact, Expedia is going to be able to help me plan my trip in a more effective way than it could before. when we put these agents in place when we become more personalized are more people going to start their journey with us because they're confident that we have a great loyalty program we have great rates and availability and a great assortment and in fact expedia is going to be able to help me plan my trip in a more effective way than it could before I also want to come back to your statement, which was OTAs have been good on supply and then marketing optimization. i also want to come back to your statement which was otas have been good on supply and then marketing optimization

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I would add for us, the B2B pillar, the fact that we've got over 70,000 partners that we have relationships with, that we have deep technology integrations with, that we understand the business of, that we are helping build travel programs, is an asset that I don't think is sufficiently appreciated. Sort of the value of that asset. I would add for us, the B2B pillar, the fact that we've got over 70,000 partners that we have relationships with, that we have deep technology integrations with, that we understand the business of, that we are helping build travel programs, is an asset that I don't think is sufficiently appreciated. i would add for us the b2b pillar the fact that we've got over 70,000 partners that we have relationships with that we have deep technology integrations with that we understand the business of that we are helping build travel programs is an asset that i don't think is sufficiently appreciated Sort of the value of that asset. sort of the value of that asset

Speaker 2: Okay. By the way, do we already know that you're able to get more people to come directly to That one statement you just made about getting people to start there because your experience has become better? Okay. okay By the way, do we already know that you're able to get more people to come directly to That one statement you just made about getting people to start there because your experience has become better? by the way do we already know that you're able to get more people to come directly to that one statement you just made about getting people to start there because your experience has become better

Speaker 1: Well, what I would say is we have said publicly we have two-thirds of our bookings that start directly with us, and in fact, over time, I think that that's a great place to be because if you're more than two-thirds direct, then you're probably missing out on attracting new people from outside your ecosystem to then come in. To me, it's how do you grow both of them at the same time? Well, what I would say is we have said publicly we have two-thirds of our bookings that start directly with us, and in fact, over time, I think that that's a great place to be because if you're more than two-thirds direct, then you're probably missing out on attracting new people from outside your ecosystem to then come in. well what i would say is we have said publicly we have two-thirds of our bookings that start directly with us and in fact over time i think that that's a great place to be because if you're more than two-thirds direct then you're probably missing out on attracting new people from outside your ecosystem to then come in To me, it's how do you grow both of them at the same time? to me it's how do you grow both of them at the same time

Speaker 2: Okay. You mentioned these three strategic pillars at the beginning, we sort of covered the first two, there's margin. All investors look at Expedia's margins, they can't help but compare them with Booking's margins. There's been this huge gap for a long period of time. Historically, I think it's for a variety of reasons, Booking has just been very good at marketing efficiency. You've started to narrow that gap. You started to climb it up a little bit. Just talk about sources of leverage going forward and do you somewhat close this gap, your operating margin gap versus Airbnb and Booking? Okay. okay You mentioned these three strategic pillars at the beginning, we sort of covered the first two, there's margin. you mentioned these three strategic pillars at the beginning we sort of covered the first two there's margin All investors look at Expedia's margins, they can't help but compare them with Booking's margins. all investors look at expedia's margins they can't help but compare them with booking's margins There's been this huge gap for a long period of time. there's been this huge gap for a long period of time Historically, I think it's for a variety of reasons, Booking has just been very good at marketing efficiency. historically i think it's for a variety of reasons booking has just been very good at marketing efficiency You've started to narrow that gap. you've started to narrow that gap You started to climb it up a little bit. you started to climb it up a little bit Just talk about sources of leverage going forward and do you somewhat close this gap, your operating margin gap versus Airbnb and Booking? just talk about sources of leverage going forward and do you somewhat close this gap your operating margin gap versus airbnb and booking

Speaker 1: Okay. I will start because Rob just slipped me a little note. I misspoke earlier when I talked about our full-year margin guide. It's 100-125 basis points. I don't know why I said 100-130. I just want to re-correct that. I'm not updating any kind of guidance here. Okay. okay I will start because Rob just slipped me a little note. i will start because rob just slipped me a little note I misspoke earlier when I talked about our full-year margin guide. i misspoke earlier when i talked about our full-year margin guide It's 100- 125 basis points. it's 100- 125 basis points I don't know why I said 100- 130. i don't know why i said 100- 130 I just want to re-correct that. i just want to re-correct that I'm not updating any kind of guidance here. i'm not updating any kind of guidance here

Speaker 2: Okay. Okay. okay

Speaker 1: Look, since I stepped in, we've expanded margins in 2024, 2025, 2026, as we continue to grow the business. I think it was 50 basis points in 2024, 240 basis points in 2025, we've got our guide. Look, since I stepped in, we've expanded margins in 2024, 2025, 2026, as we continue to grow the business. look since i stepped in we've expanded margins in 2024 2025 2026 as we continue to grow the business I think it was 50 basis points in 2024, 240 basis points in 2025, we've got our guide. i think it was 50 basis points in 2024 240 basis points in 2025 we've got our guide

Speaker 2: Yeah. Yeah. yeah

Speaker 1: For this year, this expansion, and it is really across all the lines in the P&L. Recently, we've had a lot of expansion coming from our consumer marketing, and that is a combination of using AI to have better creative, having better measurement capabilities, and understanding incrementality, and being able to sort of shift across channels. Again, as the product performs better, our marketing dollars should go further. Again, cost of sales, as we're able to automate things more, whether it's in servicing or even optimizing some of our cloud costs, we should be able to drive more expansion there. Overheads is another one. Since I've been in role, we've had a couple of overheads actions where we've reduced the size of our teams, and we're just constantly looking for opportunities there. It's balancing that with growth. For this year, this expansion, and it is really across all the lines in the P&L. for this year this expansion and it is really across all the lines in the p&l Recently, we've had a lot of expansion coming from our consumer marketing, and that is a combination of using AI to have better creative, having better measurement capabilities, and understanding incrementality, and being able to sort of shift across channels. recently we've had a lot of expansion coming from our consumer marketing and that is a combination of using ai to have better creative having better measurement capabilities and understanding incrementality and being able to sort of shift across channels Again, as the product performs better, our marketing dollars should go further. again as the product performs better our marketing dollars should go further Again, cost of sales, as we're able to automate things more, whether it's in servicing or even optimizing some of our cloud costs, we should be able to drive more expansion there. again cost of sales as we're able to automate things more whether it's in servicing or even optimizing some of our cloud costs we should be able to drive more expansion there Overheads is another one. overheads is another one Since I've been in role, we've had a couple of overheads actions where we've reduced the size of our teams, and we're just constantly looking for opportunities there. since i've been in role we've had a couple of overheads actions where we've reduced the size of our teams and we're just constantly looking for opportunities there It's balancing that with growth. it's balancing that with growth In creating the capacity to be able to invest in growth while, I would say, in a systematic way, improving the margin profile of the company. In creating the capacity to be able to invest in growth while, I would say, in a systematic way, improving the margin profile of the company. in creating the capacity to be able to invest in growth while i would say in a systematic way improving the margin profile of the company

Speaker 2: Is getting leverage in consumer marketing a backhanded way of saying that prior Expedia management teams were poorly spending their marketing dollars? Is getting leverage in consumer marketing a backhanded way of saying that prior Expedia management teams were poorly spending their marketing dollars? is getting leverage in consumer marketing a backhanded way of saying that prior expedia management teams were poorly spending their marketing dollars

Speaker 1: Well, I don't like to talk about the past in that way because probably a few years from now, someone will be on this stage, and you'll ask them the same question, and I'm hoping they won't say, "No, Ariane didn't do a good job." No, look, I think everyone does the deck of cards that they're dealt, you do the best job where you can. When you look at the 2021-2024 period in the consumer business, we were going through a lot of platform migrations. Well, I don't like to talk about the past in that way because probably a few years from now, someone will be on this stage, and you'll ask them the same question, and I'm hoping they won't say, "No, Ariane didn't do a good job." No, look, I think everyone does the deck of cards that they're dealt, you do the best job where you can. well i don't like to talk about the past in that way because probably a few years from now someone will be on this stage and you'll ask them the same question and i'm hoping they won't say "no ariane didn't do a good job." no look i think everyone does the deck of cards that they're dealt you do the best job where you can When you look at the 2021- 2024 period in the consumer business, we were going through a lot of platform migrations. when you look at the 2021- 2024 period in the consumer business we were going through a lot of platform migrations

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We had just come out of COVID. It was really difficult to understand where was demand coming from, what was happening. We're in a place where we have the foundations in place to be able to have a better understanding of returns. It's true that I've been more demanding with the team on what do we expect to get in our channels. We had just come out of COVID. we had just come out of covid It was really difficult to understand where was demand coming from, what was happening. it was really difficult to understand where was demand coming from what was happening We're in a place where we have the foundations in place to be able to have a better understanding of returns. we're in a place where we have the foundations in place to be able to have a better understanding of returns It's true that I've been more demanding with the team on what do we expect to get in our channels. it's true that i've been more demanding with the team on what do we expect to get in our channels

Speaker 2: Okay. Help us interpret some of the changes you've had in the team. Okay. okay Help us interpret some of the changes you've had in the team. help us interpret some of the changes you've had in the team

Speaker 1: Yep. Yep. yep

Speaker 2: What's your approach? You've been with the company for 10 years now? What's your approach? what's your approach You've been with the company for 10 years now? you've been with the company for 10 years now

Speaker 1: 13 years. 13 years. 13 years

Speaker 2: 13 years. You've watched a bunch of different management styles. You've come in, and I think you've had a different management style. Do you want to explain what that style is? 13 years. 13 years You've watched a bunch of different management styles. you've watched a bunch of different management styles You've come in, and I think you've had a different management style. you've come in and i think you've had a different management style Do you want to explain what that style is? do you want to explain what that style is

Speaker 1: You could explain from the outside, but no, I'm happy to say. I would say I'm someone I think people who know me would say, "Ariane is, she's an operator. She's very pragmatic." I have big ambition for the team. I always tell them they got to think big, but also be executing on the basics. It's sort of this constant pivot between what is the big picture that's going to take us to the long term, but also the short term. I've also focused the team a lot on what is the traveler value. Let's not get enamored with the platform that we're building and the technology we're doing. It's exciting, but what is the traveler value and what's the partner value? You could explain from the outside, but no, I'm happy to say. you could explain from the outside but no i'm happy to say I would say I'm someone I think people who know me would say, "Ariane is, she's an operator. i would say i'm someone i think people who know me would say "ariane is she's an operator She's very pragmatic." I have big ambition for the team. she's very pragmatic." i have big ambition for the team I always tell them they got to think big, but also be executing on the basics. i always tell them they got to think big but also be executing on the basics It's sort of this constant pivot between what is the big picture that's going to take us to the long term, but also the short term. it's sort of this constant pivot between what is the big picture that's going to take us to the long term but also the short term I've also focused the team a lot on what is the traveler value. i've also focused the team a lot on what is the traveler value Let's not get enamored with the platform that we're building and the technology we're doing. let's not get enamored with the platform that we're building and the technology we're doing It's exciting, but what is the traveler value and what's the partner value? it's exciting but what is the traveler value and what's the partner value I think because I grew up in the company, in the B2B business, and working on the supply side of the business, I'm really attuned to basically what's happening outside in the market and how do we differentiate ourself from others. I think the other thing people who know me would say, 'Ariane is,' I have high expectations of myself and of the team. We need to have ambition. We need to be hungry. We need to think about what are the possibilities. Forget about what's happened in the past. What can we do in the future? If you look at sort of where the management team is now, we've got, over the last couple of years, a new head of technology, a new head of product, both of whom actually ran product and tech before, had experiences in various companies. I think because I grew up in the company, in the B2B business, and working on the supply side of the business, I'm really attuned to basically what's happening outside in the market and how do we differentiate ourself from others. i think because i grew up in the company in the b2b business and working on the supply side of the business i'm really attuned to basically what's happening outside in the market and how do we differentiate ourself from others I think the other thing people who know me would say, 'Ariane is,' I have high expectations of myself and of the team. i think the other thing people who know me would say 'ariane is,' i have high expectations of myself and of the team We need to have ambition. we need to have ambition We need to be hungry. we need to be hungry We need to think about what are the possibilities. we need to think about what are the possibilities Forget about what's happened in the past. forget about what's happened in the past What can we do in the future? what can we do in the future If you look at sort of where the management team is now, we've got, over the last couple of years, a new head of technology, a new head of product, both of whom actually ran product and tech before, had experiences in various companies. if you look at sort of where the management team is now we've got over the last couple of years a new head of technology a new head of product both of whom actually ran product and tech before had experiences in various companies I liked bringing in people who had experiences from outside of the travel sector and bar none, I would say, you look at our management team, we're a hungry team. We're ambitious. I think we want to go out there and win, and we're mission-driven in the sense that we get to be in a business that helps people connect in the real world, and that's a real purpose. We're also very competitive, and want to be successful in the marketplace. I liked bringing in people who had experiences from outside of the travel sector and bar none, I would say, you look at our management team, we're a hungry team. i liked bringing in people who had experiences from outside of the travel sector and bar none i would say you look at our management team we're a hungry team We're ambitious. we're ambitious I think we want to go out there and win, and we're mission-driven in the sense that we get to be in a business that helps people connect in the real world, and that's a real purpose. i think we want to go out there and win and we're mission-driven in the sense that we get to be in a business that helps people connect in the real world and that's a real purpose We're also very competitive, and want to be successful in the marketplace. we're also very competitive and want to be successful in the marketplace

Speaker 2: Okay. Five minutes, two more questions. Any comments at all on the overall travel demand in the market now? I think the Hilton CEO talked about some sort of C-shaped economy. I don't know what that is. Okay. okay Five minutes, two more questions. Any comments at all on the overall travel demand in the market now? five minutes two more questions. any comments at all on the overall travel demand in the market now I think the Hilton CEO talked about some sort of C-shaped economy. i think the hilton ceo talked about some sort of c-shaped economy I don't know what that is. i don't know what that is

Speaker 1: He didn't want to do the K, it was the C. Look, I was still talking at our last earnings call about the K-shaped economy. He didn't want to do the K, it was the C. he didn't want to do the k it was the c Look, I was still talking at our last earnings call about the K-shaped economy. look i was still talking at our last earnings call about the k-shaped economy

Speaker 2: Yeah. Yeah. yeah

Speaker 1: You certainly see more strength on the high end versus on the low end. That continues to be the case. In the U.S., there's a big summer ahead of us with the World Cup with U.S. 250. We're certainly keeping a close eye on what's going on. It's very public, the airlines that have taken some capacity out of the market, the pricing is going up. What we're focused on is how do we make sure that our marketplaces, our brands, and our B2B business has supply and offers at all price points. You certainly see more strength on the high end versus on the low end. you certainly see more strength on the high end versus on the low end That continues to be the case. that continues to be the case In the U.S., there's a big summer ahead of us with the World Cup with U.S. 250. in the u.s there's a big summer ahead of us with the world cup with u.s. 250 We're certainly keeping a close eye on what's going on. we're certainly keeping a close eye on what's going on It's very public, the airlines that have taken some capacity out of the market, the pricing is going up. it's very public the airlines that have taken some capacity out of the market the pricing is going up What we're focused on is how do we make sure that our marketplaces, our brands, and our B2B business has supply and offers at all price points. what we're focused on is how do we make sure that our marketplaces our brands and our b2b business has supply and offers at all price points

Speaker 2: I guess what I'll try to ask you is, I don't know what a K to C means. Is that things getting better or are things getting worse? Would you comment one way or the other? I guess what I'll try to ask you is, I don't know what a K to C means. i guess what i'll try to ask you is i don't know what a k to c means Is that things getting better or are things getting worse? is that things getting better or are things getting worse Would you comment one way or the other? would you comment one way or the other

Speaker 1: I will stick by my K-shaped economy. I will stick by my K-shaped economy. i will stick by my k-shaped economy

Speaker 2: K-shape. Okay. All right. K-shape. k-shape Okay. okay All right. all right

Speaker 1: It's not my K. It's the K-shaped economy. It's not my K. it's not my k It's the K-shaped economy. it's the k-shaped economy

Speaker 2: Yeah. Last question, just as how about the competitive mode or the differentiation question? It's funny that as people have talked about OTAs forever, it's like, well, what's the real competitive differentiation with a Booking at Expedia? You could book that, the Omni hotel room, you can book this 18 different ways, and yet there have only been two OTAs for 20 years now or something like that. Okay, Airbnb came in, but really there's only been two OTAs. I guess it's an easy business to enter, but a very difficult business to scale, something like that. Just talk about the competitive differentiation that Expedia has. Why is it that Expedia has just generally become bigger over time, and why there haven't been a bunch of other Expedias? Yeah. yeah Last question, just as how about the competitive mode or the differentiation question? last question just as how about the competitive mode or the differentiation question It's funny that as people have talked about OTAs forever, it's like, well, what's the real competitive differentiation with a Booking at Expedia? it's funny that as people have talked about otas forever it's like well what's the real competitive differentiation with a booking at expedia You could book that, the Omni hotel room, you can book this 18 different ways, and yet there have only been two OTAs for 20 years now or something like that. you could book that the omni hotel room you can book this 18 different ways and yet there have only been two otas for 20 years now or something like that Okay, Airbnb came in, but really there's only been two OTAs. okay airbnb came in but really there's only been two otas I guess it's an easy business to enter, but a very difficult business to scale, something like that. i guess it's an easy business to enter but a very difficult business to scale something like that Just talk about the competitive differentiation that Expedia has. just talk about the competitive differentiation that expedia has Why is it that Expedia has just generally become bigger over time, and why there haven't been a bunch of other Expedias? why is it that expedia has just generally become bigger over time and why there haven't been a bunch of other expedias

Speaker 1: Well, let me start at the company level, then I'll talk about the brand. At the company level, I think the real differentiator for Expedia Group is the diversified demand portfolio we have, where you've got the three big consumer brands, and you have a B2B business that accesses demand across corporate travel, offline retail, loyalty programs, airlines, hotel business, OTAs, and emerging markets. We're able to really get exposure to all of that demand. Then, as I said earlier, that allows us to bring more value to our supply partners, like hotels and airlines and the like, which in turn allows us to get better content, and it feeds the flywheel. I think both for our supply partners and even for investors, this idea that we are this diversified travel demand company is one thing. Well, let me start at the company level, then I'll talk about the brand. well let me start at the company level then i'll talk about the brand At the company level, I think the real differentiator for Expedia Group is the diversified demand portfolio we have, where you've got the three big consumer brands, and you have a B2B business that accesses demand across corporate travel, offline retail, loyalty programs, airlines, hotel business, OTAs, and emerging markets. at the company level i think the real differentiator for expedia group is the diversified demand portfolio we have where you've got the three big consumer brands and you have a b2b business that accesses demand across corporate travel offline retail loyalty programs airlines hotel business otas and emerging markets We're able to really get exposure to all of that demand. we're able to really get exposure to all of that demand Then, as I said earlier, that allows us to bring more value to our supply partners, like hotels and airlines and the like, which in turn allows us to get better content, and it feeds the flywheel. then as i said earlier that allows us to bring more value to our supply partners like hotels and airlines and the like which in turn allows us to get better content and it feeds the flywheel I think both for our supply partners and even for investors, this idea that we are this diversified travel demand company is one thing. i think both for our supply partners and even for investors this idea that we are this diversified travel demand company is one thing When it comes to the consumer business, Expedia, it's funny, we're the original super app in travel. We are the one place you go to go places, with car and air and hotel and vacation rentals and activities and really all of that. It's always been about packaging and bundling, and the loyalty program. I think the more scale you get, the more you can invest in great experiences and bringing more value to travelers. We continue to do that. Your question about why aren't other people doing it, as I said, the travel industry is massive, and there are a lot of people who will find where is their moat going to be in travel. You've got the financial institutions or credit card companies that will have travel programs. When it comes to the consumer business, Expedia, it's funny, we're the original super app in travel. when it comes to the consumer business expedia it's funny we're the original super app in travel We are the one place you go to go places, with car and air and hotel and vacation rentals and activities and really all of that. we are the one place you go to go places with car and air and hotel and vacation rentals and activities and really all of that It's always been about packaging and bundling, and the loyalty program. it's always been about packaging and bundling and the loyalty program I think the more scale you get, the more you can invest in great experiences and bringing more value to travelers. i think the more scale you get the more you can invest in great experiences and bringing more value to travelers We continue to do that. we continue to do that Your question about why aren't other people doing it, as I said, the travel industry is massive, and there are a lot of people who will find where is their moat going to be in travel. your question about why aren't other people doing it as i said the travel industry is massive and there are a lot of people who will find where is their moat going to be in travel You've got the financial institutions or credit card companies that will have travel programs. you've got the financial institutions or credit card companies that will have travel programs You have airlines that we will power the hotel part of their loyalty program because people want to use their airline loyalty points to book a hotel, and it doesn't make sense for them to go directly. I think that's actually what's exciting is that there are a lot of different places where travel can fit in, and our B2B business can power them. Yes, we work to make sure that each of our three big consumer brands has a clear value proposition. People know why they should come back and be loyal. The reality is, people book in a lot of different ways in travel, and we want to be present for all of them. You have airlines that we will power the hotel part of their loyalty program because people want to use their airline loyalty points to book a hotel, and it doesn't make sense for them to go directly. you have airlines that we will power the hotel part of their loyalty program because people want to use their airline loyalty points to book a hotel and it doesn't make sense for them to go directly I think that's actually what's exciting is that there are a lot of different places where travel can fit in, and our B2B business can power them. i think that's actually what's exciting is that there are a lot of different places where travel can fit in and our b2b business can power them Yes, we work to make sure that each of our three big consumer brands has a clear value proposition. yes we work to make sure that each of our three big consumer brands has a clear value proposition People know why they should come back and be loyal. people know why they should come back and be loyal The reality is, people book in a lot of different ways in travel, and we want to be present for all of them. the reality is people book in a lot of different ways in travel and we want to be present for all of them

Speaker 2: That's great. All right. Ariane Gorin, CEO of Expedia Group, thank you very much. That's great. that's great All right. all right Ariane Gorin, CEO of Expedia Group, thank you very much. ariane gorin ceo of expedia group thank you very much

Speaker 1: Thank you, Mark. Thank you, Mark. thank you mark