WEBVTT - Expedia CEO Ariane Gorin Talks Second Quarter Earnings

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Expedia it posted better than expected second quarter results. However,

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<v Speaker 2>the company did warn of like a softening in travel

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<v Speaker 2>demand and the current quarter, and therefore it adjusted its

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<v Speaker 2>expectations for the rest of the Year's dig into the details,

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<v Speaker 2>expedia CEO is with us Arianne Goren and arian you

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<v Speaker 2>managed to get the nuance because shares absolutely popped on

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<v Speaker 2>the fact that you'd managed to do what you needed

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<v Speaker 2>to do and delivered for the quarter that we were

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<v Speaker 2>posting on, but then New downgraded for a second time.

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<v Speaker 1>What is the consumer telling you right now?

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<v Speaker 3>Well, first, thank you for having me. We were very

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<v Speaker 3>happy with our second quarter results. We saw an acceleration

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<v Speaker 3>in our consumer business, which is what we were looking for,

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<v Speaker 3>and then continued strength in our B to B segment

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<v Speaker 3>and in advertising. But it's true as we look at

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<v Speaker 3>the third quarter, we have seen some softness.

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<v Speaker 1>It's been a few quarters.

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<v Speaker 3>In a row that air ticket prices have been coming down,

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<v Speaker 3>that the pre car rental days have been coming down,

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<v Speaker 3>and we just started seeing a bit of that also

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<v Speaker 3>in the third quarter.

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<v Speaker 1>So we're keeping an eye on it.

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<v Speaker 4>And good morning. It's ed in San Francisco, away from

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<v Speaker 4>the United States, It's been an incredible summer in Europe,

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<v Speaker 4>the Euros football or soccer tournament, the Olympics. Why is

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<v Speaker 4>that sort of event driven process not more of a

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<v Speaker 4>confidence giver for you in your outlook?

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<v Speaker 3>Yeah, Well, first of all, I would say events driven

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<v Speaker 3>travel is a true trend, whether it's sports, whether it's concerts.

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<v Speaker 3>You know, with Taylor Swifts concert tour the last year,

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<v Speaker 3>you see that that really drives travel into destinations. So

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<v Speaker 3>that certainly plays into our optimism.

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<v Speaker 1>But again, you know, when we.

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<v Speaker 3>Look at our forecast, we're looking at what's happening on pricing,

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<v Speaker 3>what's happening in demand, and again in the long term,

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<v Speaker 3>people certainly want to travel, which is what makes us

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<v Speaker 3>sort of optimistic in the long term.

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<v Speaker 4>Arian, what's the technology story for you? If you're going

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<v Speaker 4>to drive that outlook a little higher than you've already given,

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<v Speaker 4>is there a way you can more closely match what

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<v Speaker 4>people are searching for maybe the budget conscious consumer as well,

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<v Speaker 4>if the consumer is in real time pulling back.

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<v Speaker 3>Well, you know, the great news is that because of

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<v Speaker 3>the work that we've done on our platform in the

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<v Speaker 3>last few years, in particular around having a customer identity

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<v Speaker 3>across all of our brands. We have a better understanding

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<v Speaker 3>of the traveler across all of our brands, looking at

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<v Speaker 3>what are they searching for, what are they interested in,

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<v Speaker 3>which allows us to make more personalized recommendations that are

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<v Speaker 3>more relevant for each traveler.

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<v Speaker 2>Let's talk about the brands and brand loyalty. Before we

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<v Speaker 2>do that, we just want to a minor audience of

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<v Speaker 2>TV and radio. We have sat down with the Expedia CEO,

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<v Speaker 2>Arianne Goren, and what's really interesting is you have this

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<v Speaker 2>rollout of sort of a brand loyalty program one Key

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<v Speaker 2>beyond the US and UK, but you're slowing it slightly

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<v Speaker 2>and there was an impact perhaps to Hotels dot Com

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<v Speaker 2>users in the loyalty programs they had. Can you tell

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<v Speaker 2>us about what the ultimate goal is there and why

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<v Speaker 2>you've slowed it a little bit?

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<v Speaker 1>Sure?

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<v Speaker 3>So, we actually just came up on the one year

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<v Speaker 3>anniversary of our one Key loyalty program. We launched it

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<v Speaker 3>last summer in the US and it's a program that

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<v Speaker 3>ties together Expedia, Hotels dot Com, and Verbo, which are

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<v Speaker 3>our three biggest brands. It allows travelers to earn and

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<v Speaker 3>burn one key cash across all of the brands and

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<v Speaker 3>also benefit from higher discounts, especially in hotels.

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<v Speaker 1>Sort of the more loyal they are.

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<v Speaker 3>We've been pleased with the results in the US and

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<v Speaker 3>we've just launched in the UK, But as we step

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<v Speaker 3>back and looked at other countries, what we realized is

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<v Speaker 3>this is a program that works the best when we

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<v Speaker 3>have all three of our big brands operating at scale,

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<v Speaker 3>and in many countries outside of the US and.

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<v Speaker 1>UK, we have one leading brand.

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<v Speaker 3>So what we're doing now is we're looking at how

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<v Speaker 3>do we make sure that we have the strongest loyalty

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<v Speaker 3>value proposition in each country for the brands that are there.

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<v Speaker 3>And the good news is, even before making any changes,

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<v Speaker 3>all of the loyalty members outside of the US and

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<v Speaker 3>UK are already benefiting from the higher member discounts.

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<v Speaker 2>You are relatively new in this seat May twenty twenty

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<v Speaker 2>four as CEO, you were on the board a bit

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<v Speaker 2>before that, but arian you came from the B to

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<v Speaker 2>B offering advertising offering, which you've just articulated.

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<v Speaker 1>Is going really well.

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<v Speaker 2>How therefore, can you bring your learnings from that to

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<v Speaker 2>the consumer? How you focused on driving better margins growth

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<v Speaker 2>from a consumer that, as you say at the moment

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<v Speaker 2>is nervous.

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<v Speaker 3>So I would start by saying, our consumer business has

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<v Speaker 3>three very strong and well loved brands in Expedia, Hotels,

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<v Speaker 3>dot Com and Verbo, and they all have great value propositions.

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<v Speaker 3>My experience, and I think anybody's experience in business, is

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<v Speaker 3>always that you want to make sure you understand what

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<v Speaker 3>is your customer need and then how do you have

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<v Speaker 3>a value proposition that matches it. And so what I'm

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<v Speaker 3>focused on with the team is making sure that from

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<v Speaker 3>our technology, to our supply to the way we market,

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<v Speaker 3>each of our brands is very strong in addressing a

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<v Speaker 3>particular customer need.

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<v Speaker 4>Mary Anne, what's the one single biggest headwind or risk

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<v Speaker 4>to you and to a consumer's choice to travel for

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<v Speaker 4>the remainder of this year.

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<v Speaker 3>Look, I would go back to what I talked about earlier,

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<v Speaker 3>which is, you know, prices coming down somewhat. You could

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<v Speaker 3>say that's sort of a headwind in the sense that

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<v Speaker 3>you know, as you report earnings, obviously prices have an impact.

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<v Speaker 3>But I like to see the glass half full rather

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<v Speaker 3>than half empty. And when you consider it that way,

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<v Speaker 3>you think we'll travels may be becoming more affordable.

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<v Speaker 2>It's great to have some time with you. Arianne Goran

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<v Speaker 2>exped at a CEO here in New York.

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<v Speaker 1>We thank you, thank you for having me