00:00This is a world awash in disruptions. There's the hot weather across Europe.
00:05There's Middle East angst, which is also leading to higher fuel prices.
00:08Why is there still so much resiliency and demand for travel?
00:13No, and you pointed out exactly what is happening.
00:17Thank you so much for having me.
00:18The issues that we face time and time again are,
00:22one would imagine you're not going to see travel yet.
00:24It is a very resilient industry.
00:26People want to travel, and if they can't do what they want to do at first,
00:31they'll come up with another thing to do.
00:33So, for example, a lot of the lift that would be between Europe and Asia
00:36goes through the Middle East.
00:38Well, a lot of airlines had to pull back that lift.
00:41People can't afford the more expensive nonstops that were still available.
00:45So instead of going, say, from Paris to Bangkok,
00:48maybe they went Paris to the south of France.
00:50Now, of course, you do have the hot weather.
00:53Of course, that's been an issue.
00:54So maybe instead they decide to go to Norway.
00:56But the fact is people want to travel.
00:58They're going to continue to travel.
00:59And, yes, these type of instances do end up hitting our bottom line.
01:03There's no doubt we would do better if there wasn't a war in the Middle East.
01:07But I'm still very pleased with how we perform for the quarter.
01:10Now, there is always a difference between the front of the plane and the back of the plane.
01:14But in overall travel, you own a number of different platforms.
01:18Are you seeing any kind of economic differences between people
01:23in terms of what they're choosing and where they're going?
01:26Well, we announced last night how we were very pleased that we continue to do well in the U.S.
01:33And the U.S. is an area where we're smaller than other parts of the world.
01:36A lot of people don't know that, how global we really are.
01:40We're numbers about a low double-digit percentage of our customers are in the U.S.
01:45So that's rather small compared to the total amount of business that we do.
01:49But we did very well.
01:51High single-digit growth.
01:52That's good.
01:53Now, other parts of the world, obviously, a lot less well.
01:56I mean, obviously, the Middle East, that was hurt a great deal by the start of the war.
02:00But it did start to normalize in June people in the Middle East who are traveling.
02:05However, people are still a little bit concerned about traveling to the Middle East.
02:09So that's still a little bit of a damper on that business.
02:11But the good thing about us is we are so global where one area is having a problem, another area
02:17can do well.
02:17I guess just to further emphasize Mike's question, Glenn, is the behavior changing more than just rerouting where their travel
02:25is to get around these headwinds?
02:26For example, are you seeing people book shorter stays?
02:29Are they maybe opting for the two-star hotel instead of the three-star hotel or the alternative booking?
02:34Is there anything in the behavior that essentially suggests a shift that might reflect some economic concerns?
02:42Well, look, we did see a decrease in the length of stay.
02:46That's an indication.
02:48But again, the way I look at it is I try not to go into those type of metrics that
02:53you mentioned because they can be very specific to a different region.
02:56So you look at the USA versus Europe or Asia versus our rest of the world, we call it.
03:02Those things will have different metrics, et cetera.
03:05From my point of view and for our investors, it's always look at the global, look at our bottom line,
03:10look at the overall growth rates.
03:12Don't try and figure out a slight metric in one area what that's going to indicate for the long-term
03:17future.
03:18The long-term future is travel is going to continue to increase better than GDP.
03:23Our job is to get an increase in the share of this growing industry.
03:29You also have OpenTable as one of your businesses.
03:33And we used to look at that all the time during the pandemic to find out how people were doing
03:38with their spending.
03:39You go on vacation maybe once or twice a year at most, but a lot of people go out to
03:43dinner all the time.
03:44And so I'm wondering how that area is holding up as people get more concerned, as we see consumer confidence
03:51fall.
03:53How much of an indicator is that of where the economy is?
03:56Yeah, no, it is a nice indicator.
03:58I'm very proud of the team over at OpenTable.
04:01They've been doing just fantastic over the last couple of years.
04:04Adding more restaurants and being able to provide more services both to our two kinds of customers.
04:09The person who's the diner, but also for the partner who's the restaurant owner, providing more services both sides.
04:15It's been great.
04:16Now, your question is, can we use that as some sort of proxy for how the consumer is doing or
04:22not?
04:23I'm not sure you really can or not.
04:25I know we're doing very well in that area.
04:27But again, two things to think about is majority of people do not eat out most of the time in
04:33the U.S.
04:34And again, we're just talking most of the U.S. OpenTable is international, but the overwhelming part of the business
04:40is the U.S.
04:41And as I point out, we are extremely global.
04:45Glenn, just to wrap things up, I know you and the team on your call yesterday were talking about the
04:49idea that AI-driven traffic is still well under 1% of your room nights.
04:54When do you expect that to change?
04:56Do you expect at some point that AI will make up a meaningful proportion of it?
05:01Well, there are a couple of ways to think about that.
05:03The first thing is, the most important thing in my mind is making sure we are continuing to develop our
05:07own services using AI.
05:09So people, when they start thinking about travel, they come to us so they can do their discovery, do all
05:15the things they want to explore, where they want to go, what they want to do.
05:19And then from there, transfer into actually doing the bookings.
05:22That's part of our connected trip.
05:23So they do it all in one place, holistically, seamlessly, frictionlessly.
05:28And then, God forbid that anything goes wrong, it's one point of contact that we can solve it all.
05:33And as you know, when something goes wrong in travel, it's like dominoes, one thing after another.
05:37So we can solve all the problems at once.
05:40And we're using Gen.AI to make it so much better to do that.
05:44That's game number one.
05:45Now, game number two is people are going to continue to start in other places they've always had in the
05:51past.
05:51Before there was digital commerce, people were looking at magazines, brochures, or guidebooks.
05:57Then they start going online.
05:58They start looking at other ways.
05:59And, of course, most recently before Gen.AI, Google was a nice way people would start their discovery.
06:05Now, the question people bring up to us is, well, are people going to use Gen.AI, whether it be
06:11Gemini or, you know, ChatTBT, pick your favorite model.
06:16They're going to start there.
06:17And then are you, booking, going to have to pay for the people to come to you to do the
06:22booking or not?
06:23That's the question.
06:24Now, look, we've paid in the past a lot, always.
06:27Google, we're great partners with them.
06:29We paid a lot of money to them to be able to put our advertisements in Google.
06:34We've gotten a nice return on that.
06:35But a lot of people don't realize, you know, almost approximately almost two-thirds of our customers are coming to
06:41us direct.
06:42A mid-60% of our B2C business, consumer business, comes to us direct.
06:48They're not going to Google first.
06:50Now, the fact that right now it's less than 1% coming from these LLMs, will it grow?
06:56Probably.
06:57When?
06:57I don't know.
06:58And will we have to pay?
07:00Probably.
07:00We're doing advertisements right now with ChatTBT.
07:04I do believe, though, in the long run, it's good for us.
07:07We get to diversify new channels of demand.
07:10This is all good for us.
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