WEBVTT - Micron Forecast Fails to Meet Lofty Expectations 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business 0:00:10.720 --> 0:00:13.960 Week inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine plus global business finance and 0:00:18.400 --> 0:00:22.880 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebek from Bloomberg Radio. 0:00:27.920 --> 0:00:30.400 Hey, two tech companies that are on our radar today. 0:00:30.440 --> 0:00:33.559 That includes an Amazon related story as a rate of 0:00:33.600 --> 0:00:36.199 goods that may have been headed for Amazon. We'll get 0:00:36.240 --> 0:00:37.519 more on that in just a moment, but first we 0:00:37.520 --> 0:00:38.479 want to talk about Micron. 0:00:38.560 --> 0:00:41.200 Yeah, investors shipping away this year's more than a thirty 0:00:41.240 --> 0:00:44.200 percent rally as the largest US maker of computer memory 0:00:44.240 --> 0:00:47.879 chips dropped efforts forecast disappointed investors who are looking for 0:00:47.920 --> 0:00:51.599 a bigger payoff from AI mania. This report, Carol definitely 0:00:51.640 --> 0:00:55.200 won about investor expectations and from Micron having to deliver 0:00:55.600 --> 0:00:56.200 and then. 0:00:56.120 --> 0:00:58.480 Some Micron shares by the way right now down about 0:00:58.480 --> 0:01:00.920 six percent, down nearly eight percent and at their lows today. 0:01:01.000 --> 0:01:01.480 Let's get to it. 0:01:01.600 --> 0:01:05.280 Bloomberg News US Semiconductor and networking reporter Ian King back 0:01:05.319 --> 0:01:08.480 with us from our San Francisco bureau. Ian, you know, 0:01:08.560 --> 0:01:11.400 as we were breaking down Micron's results last night. I 0:01:11.400 --> 0:01:13.039 got to say, we were scratching our heads a bit 0:01:13.160 --> 0:01:17.680 at first because the results seemed pretty good. So we're 0:01:17.880 --> 0:01:20.800 exactly is the miser disappointment? Is it just again about 0:01:20.840 --> 0:01:22.760 investor expectations for this one? 0:01:23.720 --> 0:01:26.480 No, you've nailed it. That's absolutely the case. I mean, 0:01:26.760 --> 0:01:29.360 they're predicting that revenue is going to be up over 0:01:29.520 --> 0:01:32.680 ninety percent in the current period, which you know is 0:01:32.959 --> 0:01:35.400 not a bad performance. I mean, obviously last year was 0:01:35.440 --> 0:01:38.600 a particularly brutal year for this industry, for this particular 0:01:38.640 --> 0:01:41.680 part of the industry. But you know, there was nothing 0:01:41.720 --> 0:01:44.000 wrong with the numbers according to all of the you 0:01:44.000 --> 0:01:46.280 know what the analysts said. It was just that some 0:01:46.319 --> 0:01:49.400 of the higher estimates. You know, we're in the sort 0:01:49.400 --> 0:01:51.960 of eight billion dollar range for the quarter, and obviously 0:01:52.040 --> 0:01:55.440 they didn't come out and be that bullish, but really 0:01:55.440 --> 0:01:57.960 nothing wrong with the direction that the company's heading in 0:01:58.120 --> 0:01:59.280 terms of fundamentals. 0:02:00.080 --> 0:02:02.000 We're talking about this as we're preparing for the segment. 0:02:02.040 --> 0:02:05.840 It's the largest US maker of memory chips, and to 0:02:05.880 --> 0:02:07.960 what extent does it play in AI and just remind 0:02:07.960 --> 0:02:10.920 everybody where it is in the chip space compared to 0:02:10.919 --> 0:02:13.000 all the other companies that you and we follow. 0:02:14.000 --> 0:02:16.919 Yeah, I mean in terms of AI, we're still at 0:02:16.919 --> 0:02:19.960 the beginning stages of that having an impact on the 0:02:20.000 --> 0:02:24.080 memory chip industry. But according to Micron and its competitors, 0:02:24.200 --> 0:02:27.239 it's going to have an absolutely profound impact for a 0:02:27.320 --> 0:02:30.360 number of reasons. But basically the biggest reason is if 0:02:30.440 --> 0:02:32.640 you want to train a model faster, you bombard it 0:02:32.680 --> 0:02:35.200 with information. The best way to bombard it with information 0:02:35.680 --> 0:02:38.320 is to have more memory and have that memory be 0:02:38.760 --> 0:02:41.480 much at faster at providing that information. So we've got 0:02:41.520 --> 0:02:44.280 this new product called a high bandwidth memory that they're 0:02:44.280 --> 0:02:46.600 pushing able to charge a lot of money for it. 0:02:46.600 --> 0:02:50.160 It's not just a plug and play commodity type product 0:02:50.360 --> 0:02:53.280 or any number of reasons that this will have a 0:02:53.360 --> 0:02:56.680 positive impact on the memory chip industry and Micron, but 0:02:56.800 --> 0:02:58.400 we are at the beginning stages of that. 0:02:58.520 --> 0:03:01.000 Hey, one last quick question and anything for you not 0:03:01.080 --> 0:03:03.480 answered on the Micron earnings call. Just got about thirty 0:03:03.520 --> 0:03:04.120 seconds here. 0:03:04.720 --> 0:03:07.000 Yeah, I mean, I'd got a lot of questions on 0:03:07.240 --> 0:03:10.000 where are we in terms of that HBM memory introduction, 0:03:10.320 --> 0:03:12.640 the problems is it difficult to make? And they said, yes, 0:03:12.680 --> 0:03:15.760 it's difficult to make, but We're doing exactly what we 0:03:15.800 --> 0:03:17.240 said we would. Was still on Cove. 0:03:17.440 --> 0:03:20.080 All right, good stuff as always, Bloomberg News US Semiconductor 0:03:20.160 --> 0:03:23.240 networking reporter Ian King. Now, let's get to Amazon. 0:03:22.919 --> 0:03:25.520 And a police rate of a southern California warehouse filled 0:03:25.560 --> 0:03:29.280 with suspected stolen merchandise that authorities say likely would have 0:03:29.400 --> 0:03:32.680 ended up on online marketplaces run by Amazon and other 0:03:32.760 --> 0:03:36.480 retailers with one on his Bloomberg exclusive. Here's Bloomberg News 0:03:36.480 --> 0:03:39.880 Technology and e commerce reporter Spencer Soaper with us from 0:03:40.120 --> 0:03:44.440 Southern California. Spencer, you're outside of Seattle, where you usually are. 0:03:44.840 --> 0:03:46.760 Talk to us a little bit about where you are 0:03:47.480 --> 0:03:49.480 and how the raid unfolded this morning. 0:03:52.200 --> 0:03:54.280 Yes, so we're here in Santa Anna. It's about thirty 0:03:54.320 --> 0:03:57.080 miles south of Los Angeles. We're right off the Interstate 0:03:57.120 --> 0:04:00.440 five freeway here, and there's a warehouse behind that is 0:04:00.480 --> 0:04:03.720 actually like a liquidation business. You know, these can be 0:04:04.720 --> 0:04:08.040 legit businesses where they get products that are damaged or 0:04:08.040 --> 0:04:12.840 returned and then and then resell them. But police California 0:04:12.880 --> 0:04:17.600 Highway Patrol rated this location this morning because they suspected 0:04:17.640 --> 0:04:20.479 that it's involved in trafficking of stolen goods. And a 0:04:20.480 --> 0:04:22.280 lot of the stuff that they've pulled out you can 0:04:22.279 --> 0:04:24.120 see is right next to me. Here you've got like 0:04:24.200 --> 0:04:27.360 space heaters, and you look on down the line. Then 0:04:27.400 --> 0:04:31.840 there's there's wine coolers, there's dog food down there. There's 0:04:31.920 --> 0:04:34.160 just all kinds of stuff. They're bringing it out one 0:04:34.240 --> 0:04:37.040 palette at a time. And a telltale signed for law 0:04:37.120 --> 0:04:40.679 enforcement was something like this is when it's a bunch 0:04:40.720 --> 0:04:43.120 of the same products wrapped up in in nice new 0:04:43.160 --> 0:04:46.160 boxes like we're seeing here. They say, that's very suspicious 0:04:46.200 --> 0:04:48.800 because generally a liquidator is going to have just like 0:04:48.839 --> 0:04:51.680 a jumble of different stuff in like damage boxes that 0:04:51.720 --> 0:04:52.400 have been returned. 0:04:52.440 --> 0:04:55.920 Spencer, as we said, you know this is an exclusive. 0:04:55.960 --> 0:04:59.159 What led you to this story? What led police to 0:04:59.279 --> 0:05:00.600 this raid? 0:05:02.680 --> 0:05:04.919 Well, this has been an ongoing effort to crack down 0:05:05.080 --> 0:05:08.039 on cargo theft. If it's a huge problem, it just 0:05:08.120 --> 0:05:10.280 keeps going up every year with no end in sight. 0:05:10.839 --> 0:05:14.159 Cargo theft nationally was up about fifty percent in the 0:05:14.200 --> 0:05:16.240 first quarter compared to the same period a year ago, 0:05:16.480 --> 0:05:20.039 and that number just keeps going up. So it was 0:05:20.080 --> 0:05:24.320 basically a routine law enforcement bust here and their efforts 0:05:24.320 --> 0:05:26.200 to try to shut down what's known as a fence, 0:05:26.839 --> 0:05:29.800 because once cargo thieves take this inventory, those generally get it. 0:05:29.800 --> 0:05:31.320 They're getting it by the truck load. 0:05:31.320 --> 0:05:34.520 Usually from a warehouse. They're often impersonating the person who's 0:05:34.520 --> 0:05:36.480 supposed to pick up that truck load, so no one 0:05:36.520 --> 0:05:38.720 even knows that they're thieves stealing stuff. They just kind 0:05:38.760 --> 0:05:40.279 of show up and pick it up, and then it 0:05:40.279 --> 0:05:43.240 can wind up in a place like this, And the 0:05:44.240 --> 0:05:46.560 effectiveness of shutting down a fence is it just makes 0:05:46.560 --> 0:05:48.839 it harder for cargo thieves to find a place to 0:05:48.880 --> 0:05:51.880 turn their stolen goods into cash. And so that's why 0:05:51.920 --> 0:05:53.680 they're hoping that this can maybe cool things off a 0:05:53.680 --> 0:05:54.080 little bit. 0:05:54.200 --> 0:05:57.760 Nay Spencer, I think a lot of consumers understand the 0:05:57.800 --> 0:06:01.120 implications of shoplifting in the sense of, Okay, we see 0:06:01.160 --> 0:06:04.760 security increasingly at stores. We see going into stores things 0:06:04.800 --> 0:06:07.560 locked up behind plastic and you have to ask a 0:06:07.600 --> 0:06:11.040 sales associate for for help getting some toothpaste or deodorant 0:06:11.400 --> 0:06:14.560 or something. What are the implications of cargo theft? Talk 0:06:14.560 --> 0:06:17.799 to us about what happens to prices, what happens to insurance, 0:06:17.839 --> 0:06:19.159 and what happens to bottom lines. 0:06:21.680 --> 0:06:24.280 Yeah, that's that's a really great question a point, and 0:06:24.279 --> 0:06:26.360 that's exactly it is. It's the cost is just going 0:06:26.400 --> 0:06:29.159 to get spread out to everyone. You know, the the 0:06:29.320 --> 0:06:31.640 retailers can take a loss if they lose the inventory 0:06:31.640 --> 0:06:34.000 that's en route to them. The brands take a loss 0:06:34.000 --> 0:06:36.800 if they're there inventory that's stole, and the insurance companies 0:06:36.839 --> 0:06:40.120 take a take a hit, the legitimate logistics companies take 0:06:40.120 --> 0:06:43.000 a hit. And there are estimates that this is like 0:06:43.040 --> 0:06:46.040 a you know, seven hundred million dollar problem annually. So 0:06:46.279 --> 0:06:49.760 it's it's a it's a big problem, and just like shoplifting, 0:06:49.760 --> 0:06:52.440 it's hit the point where executives have to talk about 0:06:52.440 --> 0:06:54.200 it on earnings calls. They have to talk about their 0:06:54.200 --> 0:06:58.480 money they're losing from theft, either shoplifting or more organized 0:06:58.720 --> 0:07:02.560 cargo theft rings and so it is a problem that 0:07:02.600 --> 0:07:03.359 affects everybody. 0:07:03.480 --> 0:07:03.600 Well. 0:07:03.640 --> 0:07:07.600 As we mentioned Spencer, this authority is saying that the 0:07:07.880 --> 0:07:11.440 stolen goods, allegedly stolen goods behind you would likely end 0:07:11.520 --> 0:07:14.880 up on a marketplace on Amazon or perhaps other marketplaces 0:07:15.280 --> 0:07:17.680 on the Amazon part of this, You've covered Amazon for years. 0:07:17.720 --> 0:07:21.400 I still think that consumers don't necessarily understand the marketplace 0:07:21.480 --> 0:07:24.480 part of Amazon versus buying directly from Amazon. Talk a 0:07:24.480 --> 0:07:27.520 little bit about how stolen goods could end up on 0:07:27.640 --> 0:07:30.360 what many would consider a legitimate service like Amazon. 0:07:33.040 --> 0:07:35.840 Yes, so if you buy something on Amazon, sixty percent 0:07:35.880 --> 0:07:39.040 of the products sold on Amazon come from independent merchants. 0:07:39.040 --> 0:07:41.160 It's kind of like going to a mole and going 0:07:41.200 --> 0:07:44.000 into a store. You're not buying from the mole, You're 0:07:44.000 --> 0:07:46.840 buying from that particular store. So the Amazon is like 0:07:46.880 --> 0:07:48.760 the digital version of that. So I've got a truck 0:07:48.800 --> 0:07:52.840 backing up next to me. So basically, if you have 0:07:52.920 --> 0:07:55.280 stolen goods and you want to unload them, selling it 0:07:55.320 --> 0:07:57.320 on Amazon is really a good way to do it 0:07:57.360 --> 0:08:01.400 because you almost put some legitimacy in to it. Someone thinks, oh, 0:08:01.400 --> 0:08:03.880 I'm buying this from from Amazon, it must be legit 0:08:04.240 --> 0:08:06.200 as opposed to like the other day I was in 0:08:06.240 --> 0:08:08.240 Seattle and a guy was selling pork chops out of 0:08:08.280 --> 0:08:10.280 a gym bag. You know, I'm not I'm not really 0:08:10.280 --> 0:08:13.280 trusting the supply chain of that operation. Whereas if I 0:08:13.320 --> 0:08:15.200 see it on Amazon and it's new, I might I 0:08:15.240 --> 0:08:15.800 might buy that. 0:08:16.160 --> 0:08:20.800 Our producer Elizabeth talking about somebody selling dry cleaning clothes 0:08:21.320 --> 0:08:24.400 on the corner like five dollars or something like that. Yeah, 0:08:24.440 --> 0:08:28.840 so it stuff happens in all different forms. What's Amazon's 0:08:28.920 --> 0:08:31.800 role in this, I mean in helping the police and 0:08:31.880 --> 0:08:34.360 other retailers to find these individuals. 0:08:36.920 --> 0:08:39.520 Yeah, Amazon is involved. We know they've been communicating with 0:08:39.600 --> 0:08:42.920 law enforcement that's about this particular situation. That's as far 0:08:42.920 --> 0:08:45.760 as Amazon goes with us on that, But yeah, they are. 0:08:45.840 --> 0:08:48.439 They do have, you know, entire teams dedicated to try 0:08:48.480 --> 0:08:52.520 and identify what might be stolen inventory help law enforcement 0:08:52.520 --> 0:08:55.240 if they're trying to track trace stuff back. And that's 0:08:55.240 --> 0:08:57.760 exactly the problem, right once you lose a cargo container 0:08:57.800 --> 0:09:00.560 of stuff it and it gets out of your site, 0:09:00.640 --> 0:09:02.080 if you don't catch those people in the act of 0:09:02.120 --> 0:09:05.320 doing it, how do you differentiate between what's stolen and 0:09:05.360 --> 0:09:09.000 what isn't Because there's so much inventory and circulation, and 0:09:09.040 --> 0:09:12.599 that's where Amazon can be helpful with law enforcement in 0:09:12.679 --> 0:09:15.880 terms of helping them identify. Yes, this this load was 0:09:15.880 --> 0:09:18.680 supposed to come here on this day and it never arrived, 0:09:18.760 --> 0:09:20.880 or this trailer was taken on this day and it 0:09:20.880 --> 0:09:23.560 never got to its destination. That's where companies like Amazon 0:09:23.600 --> 0:09:25.120 can can be helpful with law enforcement. 0:09:25.200 --> 0:09:27.160 Okay, Spencer for those watching on TV, they can see 0:09:27.200 --> 0:09:29.880 the boxes and palettes stacked up behind you. Do you 0:09:30.000 --> 0:09:32.600 have any understanding from authorities at this point about the 0:09:32.640 --> 0:09:35.679 size and scale of this bust, the value of products 0:09:35.720 --> 0:09:36.360 that was found. 0:09:39.040 --> 0:09:42.560 Yeah, so they're estimating about about seven truckloads right now. 0:09:42.559 --> 0:09:46.160 So these would be big eighteen wheel rigs, so about 0:09:46.200 --> 0:09:49.720 about seven of those and the estimated value of at 0:09:49.760 --> 0:09:51.000 least at least a million dollars. 0:09:51.160 --> 0:09:53.920 All right, real quickly, how often is this happening, these 0:09:53.960 --> 0:09:54.760 cargo thefts? 0:09:58.280 --> 0:10:01.760 So in the first quarter there were nearly a thousand, 0:10:01.920 --> 0:10:04.600 so I mean you're looking at several a day in 0:10:04.679 --> 0:10:08.559 southern California is a real hotspot California, Texas, Illinois or 0:10:08.600 --> 0:10:10.800 where most of the stuff is going down. So we're 0:10:10.840 --> 0:10:13.000 kind of right in ground zero of cargo fift right now. 0:10:13.080 --> 0:10:14.480 Well, you are a smack in the middle of it. 0:10:14.600 --> 0:10:18.359 Exclusive reporting Spencer, thank you so much, Bloomberg News Technology 0:10:18.600 --> 0:10:22.720 and e Commerce reporter Spencer sober there in Santa Ana, California, 0:10:22.920 --> 0:10:24.199 smack in the middle of it as they are trying 0:10:24.240 --> 0:10:27.400 to figure out exactly right the complete value of it. 0:10:27.400 --> 0:10:29.560 But he said, what seven truckloads? Did you say? 0:10:29.720 --> 0:10:32.680 Yeah, Wow, it's a lot million dollars worth of goods. 0:10:34.240 --> 0:10:37.760 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:37.800 --> 0:10:41.040 live weekday afternoons from two to five pm Eastern Listen 0:10:41.080 --> 0:10:43.240 on Apple car Play and then brought auto with a 0:10:43.240 --> 0:10:47.439 Bloomberg Business at or watch us live on YouTube. 0:10:47.840 --> 0:10:50.200 Well, yesterday you might recall our chat with the CEO 0:10:50.320 --> 0:10:53.600 of Carnival, Josh Weinstein. He talked about record setting demand 0:10:53.640 --> 0:10:56.920 for cruises that's helping sell tickets at high prices. He 0:10:57.280 --> 0:11:01.160 was our higher prices. He was incredibly beat. We wanted 0:11:01.160 --> 0:11:03.560 to know more when it comes to summer travel. So 0:11:03.720 --> 0:11:06.080 that brings us to our next guest and the online 0:11:06.120 --> 0:11:09.480 travel company Booking Holdings, a belt weather for global travel, 0:11:09.520 --> 0:11:12.679 and the owner of Priceline, Kayak rental Cars, Open table 0:11:12.720 --> 0:11:15.119 and so much more with us right now is Priceline 0:11:15.160 --> 0:11:18.680 CEO Brett Keller joining us from Norwalk, Connecticut. Brett, great 0:11:18.679 --> 0:11:19.240 to have you here. 0:11:19.240 --> 0:11:22.520 How are you doing very well gearing up for the 0:11:22.520 --> 0:11:23.560 Fourth of July weekend? 0:11:23.559 --> 0:11:25.640 Here we'll talk about gearing up. 0:11:25.960 --> 0:11:28.280 What are you expecting for Fourth of July and really 0:11:28.280 --> 0:11:29.480 summer travel overall. 0:11:30.559 --> 0:11:32.520 Sure, Well, let's start with the holiday, because what we're 0:11:32.559 --> 0:11:37.079 seeing this summer is demand really compressing into the holiday periods, 0:11:37.120 --> 0:11:41.400 and fourth of July is typically the biggest of the year, 0:11:41.960 --> 0:11:44.880 and I think that's certainly teen up already. At the airports, 0:11:44.920 --> 0:11:47.840 we're seeing you know, good healthy demand flowing through TSA 0:11:47.960 --> 0:11:50.440 checkpoints up anywhere from you know, six to ten percent, 0:11:51.080 --> 0:11:54.360 and we should see another record breaking I think holiday 0:11:55.440 --> 0:11:57.840 versus where we were back in twenty nineteen. Now with 0:11:57.920 --> 0:11:59.480 that said, you know, if you compare it to two 0:11:59.480 --> 0:12:01.560 thousand and ninete, we're really where we should be in 0:12:01.720 --> 0:12:05.240 twenty twenty one in terms of overall volumes. But of 0:12:05.280 --> 0:12:07.640 course with the pandemic, we're now just really coming out 0:12:07.679 --> 0:12:10.760 of that and still feeling some strength there. So things 0:12:10.800 --> 0:12:13.000 are looking good. We should have over seventy million visitors 0:12:13.000 --> 0:12:16.400 on the road, either mostly by car and then of 0:12:16.440 --> 0:12:18.840 course the rest by flight or bus. 0:12:18.960 --> 0:12:22.480 Where you seeing particular strength or maybe changes in trends 0:12:22.520 --> 0:12:24.600 that you didn't see in previous years this year. 0:12:25.880 --> 0:12:28.040 Sure, we last year it was the year of Europe, 0:12:28.080 --> 0:12:30.400 and we had a lot of outbound travel heading over 0:12:30.440 --> 0:12:32.920 to Europe. This year, we're seeing some of that mix 0:12:33.280 --> 0:12:37.040 flow back into kind of nearby zones within the US, 0:12:37.040 --> 0:12:39.840 So folks flying down to Mexico, flying to the Caribbean, 0:12:40.440 --> 0:12:43.760 even out to Hawaii. So we're seeing somewhat closer destination 0:12:43.800 --> 0:12:47.400 travel taking place, and of course some happening more in Asia. 0:12:47.440 --> 0:12:50.080 Asia has been a very hot destination this year as 0:12:50.120 --> 0:12:53.120 things now there are fully opened up, especially with the 0:12:53.240 --> 0:12:55.440 end to dollar ratio, a lot of travel going into 0:12:55.480 --> 0:13:00.920 Japan and especially into Tokyo Kyoto. Those areas so hot markets. Obviously, 0:13:00.960 --> 0:13:02.760 the Olympics are going to help your pickup as we 0:13:02.800 --> 0:13:05.880 get into later in July, and so that will help 0:13:06.000 --> 0:13:07.320 props in business there as well. 0:13:07.400 --> 0:13:10.600 Hey, Brett, any sign that travelers are looking to trade down, 0:13:11.000 --> 0:13:13.640 are looking for bargains or you see that on the 0:13:13.679 --> 0:13:18.280 provider side of things where they are making deals cutting prices. 0:13:19.720 --> 0:13:22.640 Not in a material way. No, we've seen flight prices 0:13:22.679 --> 0:13:25.040 come down quite a bit over the last year. Flight 0:13:25.080 --> 0:13:28.080 prices are down almost fifteen percent, but that's largely due 0:13:28.080 --> 0:13:32.640 to expanded supply. So airlines have opened up more supply. 0:13:32.840 --> 0:13:36.360 American Airlines recently announced they've opened up eight percent more capacity, 0:13:36.520 --> 0:13:39.360 and so with that capacity that helps pull prices down 0:13:39.559 --> 0:13:42.480 for consumers, which is great. On the accommodation side, however, 0:13:42.840 --> 0:13:45.280 prices are still up a couple percentage points. And so 0:13:45.760 --> 0:13:47.960 you know, the major hotel chains here in the US 0:13:48.000 --> 0:13:50.560 are doing everything possible to keep their prices up. They 0:13:50.559 --> 0:13:52.600 don't want to see those prices fall, as that's what 0:13:52.679 --> 0:13:54.800 they lean on to drive their profitability. 0:13:55.120 --> 0:13:57.400 So they've been doing a pretty decent job of that. 0:13:57.960 --> 0:14:01.280 But again in some of the valley periods, as we 0:14:01.320 --> 0:14:03.960 move through the summer, we are hearing from our partners 0:14:04.000 --> 0:14:06.079 that there's some help needed there to fill some excess 0:14:06.080 --> 0:14:08.959 capacity as and again in the accommodation space, there's always 0:14:09.040 --> 0:14:09.800 excess capacity. 0:14:09.840 --> 0:14:11.800 They'd love to fill it all if they can, but 0:14:11.880 --> 0:14:12.960 that just isn't possible. 0:14:13.040 --> 0:14:15.040 It's interesting because you know, Carol and I have been 0:14:15.120 --> 0:14:17.600 hitting the road doing some traveling lately, and the prices 0:14:17.600 --> 0:14:19.760 that we've seen in some of the cities that we've 0:14:19.800 --> 0:14:22.640 gone to for hotels have just been absolutely astronomical. I mean, 0:14:22.680 --> 0:14:25.040 in some cases we're going from three digits to four 0:14:25.080 --> 0:14:25.920 digits a night. 0:14:26.000 --> 0:14:26.320 Brett. 0:14:27.040 --> 0:14:30.080 It's just shocking to see that the prices go up 0:14:30.120 --> 0:14:33.240 so much. Are you only seeing that in major metropolitan 0:14:33.320 --> 0:14:36.720 areas around sort of peak travel times with business conferences 0:14:36.720 --> 0:14:39.120 and the like, or is that a new sort of 0:14:39.120 --> 0:14:39.920 trend that we're seeing. 0:14:41.000 --> 0:14:43.080 Yeah, for the most part, I think that's true. Take 0:14:43.160 --> 0:14:45.880 New York City as an example, right, New York City 0:14:46.360 --> 0:14:50.800 put in some legislation that prevents alternative accommodations from really 0:14:50.840 --> 0:14:52.600 expanding there. So that's put additional pressure. 0:14:52.640 --> 0:14:54.720 Talking about the ban on airbnbs. 0:14:54.120 --> 0:14:59.480 Here, yes exactly, and so that obviously drives prices higher 0:14:59.640 --> 0:15:02.080 on the the hotel side. And New York has had 0:15:02.120 --> 0:15:04.400 a lot of inflow from outside of the US in 0:15:04.480 --> 0:15:06.920 terms of traffic coming in again now that it's fully 0:15:06.920 --> 0:15:09.560 opened up from other countries, a lot more visitors coming 0:15:09.600 --> 0:15:11.760 in from China, which was not the case a year ago. 0:15:11.800 --> 0:15:13.880 So that's helping to keep prices up in New York. 0:15:14.280 --> 0:15:17.560 As you move to some other marketplaces, though, like Vegas 0:15:17.600 --> 0:15:22.760 and Orlando, which are really high leisure destination centers, you know, 0:15:22.840 --> 0:15:25.920 those seem to be not pushing up as high on 0:15:25.960 --> 0:15:28.280 the pricing point, and especially if you're not traveling in 0:15:28.320 --> 0:15:31.840 the peak vacation periods, you can get some amazing and 0:15:31.880 --> 0:15:34.520 incredible deals in those markets because there is so much 0:15:34.560 --> 0:15:35.920 supply in those markets. 0:15:36.280 --> 0:15:38.320 Right, you talked about the importance of the July fourth 0:15:38.360 --> 0:15:41.440 holiday and your expectations around it. How does what happens 0:15:41.880 --> 0:15:45.240 July fourth, the week around it, if you will, and 0:15:45.320 --> 0:15:47.240 what that kind of how it sets the tone maybe 0:15:47.240 --> 0:15:48.400 for the rest of the summer season. 0:15:49.920 --> 0:15:52.400 Well, that's a great question, and it's always hard to 0:15:52.440 --> 0:15:55.480 predict because you know, the fourth of July is really 0:15:55.520 --> 0:15:58.520 the peak travel period in the summer, and then people 0:15:58.600 --> 0:16:01.200 usually anchor their other vacation in time off around that. 0:16:01.400 --> 0:16:05.040 So it is a good indicator that leisure demand will 0:16:05.120 --> 0:16:08.760 continue through the summer at a healthy pace. However, again 0:16:08.800 --> 0:16:10.960 it's really business is carrying a lot more of the 0:16:10.960 --> 0:16:13.400 weight right now, I think in the travel industry than 0:16:13.680 --> 0:16:16.480 is the leisure traveler. So while it's great to see 0:16:16.560 --> 0:16:20.120 leisure demand peaking during the fourth of July, the industry 0:16:20.160 --> 0:16:22.120 is going to lean a lot more heavily on the 0:16:22.160 --> 0:16:24.040 business sector as we move through the rest of the 0:16:24.120 --> 0:16:27.600 year because business is growing at a healthier clip than 0:16:27.720 --> 0:16:29.880 leisure demand is. Right now, I think leisure travelers are 0:16:29.880 --> 0:16:32.080 really filling the pinch when it comes to the cost 0:16:32.080 --> 0:16:35.720 of airline tickets especially, and all of the other expenses 0:16:35.720 --> 0:16:38.840 that they're trying to fill, whereas on the business side, 0:16:38.920 --> 0:16:41.280 there's still growth there and that I think is predicted 0:16:41.280 --> 0:16:43.280 to growing. Where from seven to eight percent, which will 0:16:43.320 --> 0:16:45.680 be a real help and offset to some of this 0:16:45.760 --> 0:16:46.800 softening leisure side. 0:16:46.840 --> 0:16:49.520 As Tim said, we have been doing more traveling as 0:16:49.560 --> 0:16:52.800 of late. The business sector in terms of travel, how 0:16:52.840 --> 0:16:54.720 much does it still have to kind of catch up 0:16:54.760 --> 0:16:56.200 to where it was pre pandemic. 0:16:57.280 --> 0:16:59.800 Yeah, we're still about ten percentage points off of where 0:16:59.840 --> 0:17:02.640 we we're in twenty nineteen, so a little bit more 0:17:02.680 --> 0:17:02.920 to go. 0:17:02.960 --> 0:17:05.199 Whereas leisure exceeded. 0:17:04.720 --> 0:17:07.240 Twenty nineteen and twenty twenty two at the end of 0:17:07.240 --> 0:17:10.359 twenty two, so the leisure side really rebounded first and 0:17:10.440 --> 0:17:12.440 is now starting to, you know, kind of move into 0:17:12.440 --> 0:17:16.000 a more normal cyclical pattern, whereas business is still trying 0:17:16.000 --> 0:17:18.680 to catch up. And so the more business that can 0:17:18.760 --> 0:17:21.200 lay on top of that leisure demand, which already has 0:17:21.280 --> 0:17:24.439 caught up, it just makes for you know, a there 0:17:24.520 --> 0:17:27.360 is still growth happening in the in the travel business 0:17:27.400 --> 0:17:28.720 here in North America. 0:17:29.080 --> 0:17:30.919 Hey, Brett, how are you feeling in terms of your 0:17:30.960 --> 0:17:34.800 comfort being in the online travel agency space right now? 0:17:35.240 --> 0:17:39.600 Given that anytime you go on an airline or call 0:17:39.640 --> 0:17:43.040 an airline, they remind people, okay, the best place to 0:17:43.080 --> 0:17:45.480 book is directly with the airline. How comfortable are you 0:17:45.520 --> 0:17:47.640 feeling being this sort of middle person right now. 0:17:48.520 --> 0:17:52.200 Sure, Well, you know, listen, any company wants their customer 0:17:52.240 --> 0:17:55.439 to book directly with them, and the reason that online 0:17:55.440 --> 0:17:59.119 travel agencies exist is because we provide really compelling value. 0:17:59.200 --> 0:18:01.240 So the question is, okay, so what's the value we provide, 0:18:01.440 --> 0:18:03.520 And there's a number of points here to offer. One 0:18:03.760 --> 0:18:07.679 is clearly our ability to drive comparison shopping. So you know, 0:18:07.680 --> 0:18:09.280 when you come to price Line, we don't show you 0:18:09.359 --> 0:18:13.400 one or two suppliers. We literally show you everybody, every airline, 0:18:13.720 --> 0:18:16.960 every hotel, chain partner, every independent property, and so you 0:18:17.000 --> 0:18:20.040 can make a really educated decision as a customer. The 0:18:20.080 --> 0:18:23.679 second is we're constantly fighting for you to find the 0:18:23.800 --> 0:18:25.960 very best deal that we can get from our partners, 0:18:26.080 --> 0:18:30.240 and oftentimes when you come here you sign in, we're 0:18:30.280 --> 0:18:32.280 going to get you a better price than what you 0:18:32.320 --> 0:18:35.119 can find in many other locations around the world. And 0:18:35.160 --> 0:18:37.840 so those are the couple of values that we provide. 0:18:37.840 --> 0:18:40.440 We provide packaging where we can bundle these things together 0:18:40.480 --> 0:18:41.760 and drive our prices even more. 0:18:42.040 --> 0:18:44.280 Brett ten seconds. Where are you going this summer? 0:18:45.200 --> 0:18:45.360 Oh? 0:18:45.640 --> 0:18:48.520 I'm heading to Idaho. My favorite day in the summer. 0:18:49.000 --> 0:18:50.920 Got to get out into the woods, do a little running, 0:18:50.920 --> 0:18:53.640 a little fishing, and just enjoy some decompression time. 0:18:53.680 --> 0:18:55.239 All right, sounds pretty magical. All right. 0:18:55.240 --> 0:18:57.840 Brett Keller, thank you so much, Chief executive officer at Priceline, 0:18:57.920 --> 0:18:59.920 joining us from Norwalk, Connecticut. 0:19:01.480 --> 0:19:05.359 You're listening to the Bloomberg Business Week podcast. Listen live 0:19:05.440 --> 0:19:08.359 each weekday starting at two pm Eastern on Apple car 0:19:08.359 --> 0:19:11.320 Play and Android Auto with the Bloomberg Business App. You 0:19:11.359 --> 0:19:14.639 can also listen live on Amazon Alexa from our flagship 0:19:14.680 --> 0:19:18.480 New York station, Just say Alexa, Play Bloomberg eleven thirty 0:19:20.920 --> 0:19:21.520