The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Yes. Well, look, we're excited to jump in, and we're going to start at a high level. There's this view out there, some executives in the space kind of
trumpeting more than others that work from home kind of permanently expands the addressable market of travel and may change the demand
mix between hotel and non-hotel.
Glenn, where do you come out on that? What do you think travel looks like post-pandemic?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: I want to talk on near term with -- just get it out of the way on Omicron, the latest strain and some travel restrictions popping back up. Is there
anything you guys are seeing in bookings or cancellations with the latest news?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So now that we've had a couple of these strains and these patterns, like do you think people are getting kind of to the point where they're learning
to live with this and travel through it? Again, maybe it's too early, but is there any signs as we've gone through this that give you hope that the
next 3 strains, it may just -- impact may be less and less?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So stepping back from this specific strain, given kind of the strength of your balance sheet, your long-term focus, like do you feel like you're picking
up market share in -- whether it's this strain or just throughout the pandemic in general, given how strongly you're positioned going into this?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: You guys have announced 2 acquisitions recently. I wanted to just get your thoughts on how -- maybe starting with the Etraveli, how this Flights
acquisition fits into your air strategy?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: And what about Getaroom? Can you just talk a little bit about what they bring to the strategy and how you're integrating them or planning to
integrate them?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Connected trip, when you kind of think about this strategically, how much of this is designed to increase revenue per transaction versus really just
an effort to drive people to mobile app and book direct or maybe a little bit of everything.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Are there any north stars we should think about in terms of the long-term attach rate of things like air, car or experiences?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So looking at the mobile app, we've seen in third-party data, you all talked about a healthy increase in app traffic. And so aside from kind of just
the consumer shift to mobile, what are some of the things you all have been doing to drive more of that?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So when you look at the success you've had in mobile app and increasing share of direct, does that change how you think about spending in
performance channels that greater lifetime value? Or are you still focused on kind of transactional unit economics and performance spend.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: You guys talk about it a little bit, but not, I think, as much as you could, but the Genius program, I think it's over 70 million members. It's been a key
driver of loyalty. How has the program evolved over the years? How do you see it evolving over the next couple of years as you add more product
into the mix?
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DECEMBER 06, 2021 / 4:00PM, BKNG.OQ - Booking Holdings Inc at UBS Global TMT Conference (Virtual)
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So looking at some of the fintech stuff you're working on, you said last quarter, about 1/3 of Booking.com's bookings are now running on your
payments platforms. What are the key levers for getting that to over half of total bookings? Are there chunky step-ups of adding different chains?
Like what are some of the things that will drive that penetration rate higher.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Okay. And then as we think about the revenue model, is it -- today, is it fair to say that most of the revenue generation on the payment side is
rebates from virtual credit cards? Or are you starting to ask suppliers for higher take rates in merchant since you do absorb the cost of the credit
card and then some customer support? And like how does that evolve over time?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Yes. So one of the things, I guess, that seems really compelling about it is just this notion that interchange fees for hotel are so high for cross-border,
especially for multicurrency. And historically, at least if we go back to '19, I'd imagine these are really high percentage of your transactions for these
cross-border, cross currency, where you can save the hotel a lot of money and over time, maybe make some money as you do your own payments
on these transactions.
Like how meaningful is that in a normalized travel environment that kind of current -- what percent of your transactions, how high is that, that are
multicurrency?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: And then as we look out a couple of years as you scale this payments business, I think you've talked about margins shaking out somewhere between
flight and accommodations. And so I guess, aside from driving scale, what are the other key buckets for getting this margins up inside payments?
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DECEMBER 06, 2021 / 4:00PM, BKNG.OQ - Booking Holdings Inc at UBS Global TMT Conference (Virtual)
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Okay. Anything you can share with us on when you guys would look to roll out some of this value-added stuff that will be helpful there.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Got it. And then you touched on this earlier, David, but you've always benefited from having really high conversion rates from your, I guess, paid
marketing and organic. And I think part of that has just been the agency model, having liberal cancellation policies.
But you mentioned that just adding new payments is actually positive for conversion. So like I guess if we look at payments and then connected
trip more broadly, are you seeing any deterioration in conversion as you increase the complexity of the product? Or is it pretty stable or improving?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So shifting to the marketing. How do you see kind of the industry right now in terms of where on the spectrum things are between kind of growth
and profitability in marketing channels.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: And I guess you guys have started to talk a bit more about spending in social. So is that a function of a big ROI unlock or more strategic shift in how
you think about ROI or the funnel.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: You just mentioned this, Glenn, but just to ask it more directly, the -- any targeting or attribution changes from how Apple has changed, it used to
be IDFA and ATT, and kind of how you think about these newer social channels in particular?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So what is the latest in terms of how you think the EU kind of digital market stuff is going to potentially change the landscape with big tech and
at booking in particular.
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Shifting to alternative accommodations, is rent by owner supply, like how big of a strategic focus is that? And what are you guys doing to try to
get more of that sort of supply onto the platform?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: If you look at supply more broadly, we haven't seen the same growth like we used to. Where are we, do you think, in terms of just getting hotel
and alternative supply? Is there a lot left out there to get over the next couple of years? How do you guys think about that?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Okay. And then looking at online penetration, do you think this is something that the e-commerce pull forward can actually help travel. I mean,
historically, travel has been among the more penetrated areas online. But do you think that just there are some incremental people pulled in from
the pandemic who will be new to travel. How do you guys think about that?
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DECEMBER 06, 2021 / 4:00PM, BKNG.OQ - Booking Holdings Inc at UBS Global TMT Conference (Virtual)
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: Thinking about inflation, I wanted to ask a few questions. First, where do you think ADRs now are where you -- in, I guess, across both the hotel
and non-hotel, where are they now versus where you thought they would be at this point in the recovery? And do you think that those ADRs kind
of within the same channel mix are likely to continue to go up into this kind of peak summer 2022 season?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: And if we think about that cost side and your own P&L, maybe you can walk us through and remind us a little bit, you took a couple of points out
of variable cost using the '19 base. I think some of those should start to come back and then you've got some inflation. What are some of the
dynamics on maybe personnel costs or through the P&L that we should think about exposed to just this trend of inflation?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: So last one to wrap up would just be capital allocation. Anything changed? You started to give some color on the buyback again. Anything changed
with the latest strain? And then if we think out back to a normalized environment, what do you -- you generate tons of free cash, how do you guys
think about M&A versus share repurchase over the medium term?
Question: Lloyd Wharton Walmsley - UBS Investment Bank, Research Division - Analyst
: All right. Well, Glenn, David, thank you guys so much for being here. It's great to have you. And hopefully, you guys come in the real life next year,
fingers crossed.
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