Q2 2021 Booking Holdings Inc Earnings Call

August 4, 2021

[music].

Okay.

Welcome to booking holdings second quarter plenty plenty 1 conference call.

<unk> holdings would like to remind everyone. The best call may contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

These forward looking statements are not guaranteed of future performance and are subject to certain risks uncertainties and assumptions that are difficult to predict.

Therefore actual results may differ materially from those expressed implied or forecasted in any such forward looking statements ex.

Question for future goals or expectations and similar expressions.

I think something other than historical fact are intended by.

Are intended to identify forward looking statements.

For a list of factors that could cause the booking holdings actual results could differ materially from those described in the forward looking statements needs are for it that is safe Harbor statements at the end of booking holdings earnings press release.

Booking holdings, most recent filings with the Securities and Exchange Commission.

Unless required by law booking holdings undertakes no obligation to update publicly any forward looking statements, whether as a result of new information future events or other life.

A copy of booking holdings earnings press release, together with an a companion financial and statistical supplement is available in the for investors section of booking holdings website, Www Dot booking holdings dotcom.

And now I would like to introduce booking holdings true speaker for this afternoon, Mr. Glenn full golf you may begin your conference.

Thank you and welcome to booking holdings second quarter Conference call.

I'm joined this afternoon by our CFO David Glenn.

I'm encouraged by another quarter of meaningful improvement in our accommodations business with Q2 room night up sequentially, 59% versus Q1.

This compares very favorably to our pre pandemic historical pattern of a slight decline in Q2 room nights versus Q1.

Compared with 2019, Q2 room nights were down, 26%, which was significantly better than the 43 per cent decline. We've previously reported for the month of April and a 54% decline in Q1.

The acceleration in the second quarter was primarily driven by domestic international booking trends in Europe.

Growing our ramp up in vaccination rates and the relaxation of many travel restrictions in the region.

The growth for international bookings in Europe was mainly from bookings within the European region.

The very strong room night growth in the United States that we saw in April and highlighted at our last earnings call continued in May and June.

Something very strong U S room night growth for the full quarter versus Q2.2019.

David will provide additional details on our second quarter results in his remarks.

We are of course closely monitoring the impact of the Delta area on the rising Covid case count around the world as what it was from newly imposed travel restrictions, which have led to a modest pullback in our booking trends in the month of July relative to June.

Hello, The July booking trends were improved from our full Q2 results.

While the wars of adult ovarian demonstrates the volatility and uncertainty.

Timing and shape of recovery for travel we remain confident that we will eventually see a strong recovery in travel demand globally.

The sharp return to growth initially in the U S. Net of the European markets that we have witnessed this year shows us clearly that leisure travelers are eager to get back to the booking trips on our platform when restrictions are lifted and customers are able to travel.

We expect to be much closer to our 2019 revenue levels in Q3 than we were in Q2 driven by the strong booking improvements we have seen in the last few months.

As we have done throughout the pandemic.

We'll continue to build on the strengths of our core accommodation business and support its long term growth.

The strength of our core business comes from the flywheel effect, we get from our 2 sided marketplace, where we drive benefits to our traveler customers and our supply partners alike.

For our customers, we strive to deliver the best choice of accommodations or for the most value and provide the easiest booking experience all backed by excellent customer service and support.

Addressing these critical needs of choice value.

And EPS, we create a superior booking experience and strengthen our relationships with our customers I'm pleased to report that our booking dot com, we're seeing pre pandemic customers coming back to us to book their trips, while also attracting new customers and the current mix of acquiring new customers is new.

Not significantly different than prior to the tandem.

1 of the ways, we drive value for our large customer base that booking dot com is through our genius loyalty program.

This program provides discounts for genius members at hundreds of thousands of properties on our platform and also offers value and other benefits like complimentary breakfast free room upgrades and more recently discounted airport taxes just to name a few.

We will continue innovating and adding to the ways, we provide value to our genius customers, who have historically had a high repeat rate and a higher mix of direct bookings when compared to non genius customers.

Our app is an important way, we deliberate easier booking experience to our customers globally in Q2 booking dot com was the number 1 downloaded app. According to a third party research firm in.

In the U S. In Q2, we were the most downloaded major otas app downloads of the booking dot com app in the second quarter significantly increased sequentially.

We also saw U S app using Q2 meaningfully surpass the prior peak observed for the Covid pandemic.

In the second quarter, we again saw a higher mix of our customers booking directly with us than in the comparable period in 2019.

It is encouraging to see these gains even as we look for opportunities to lean into performance marketing channels, where we see attractive rois.

We have a long history.

Effectively managing our performance marketing channels to bring brokers to our platform profitably. We plan to continue with this proven approach in the future.

In addition.

Leveraging our marketing expertise and ROI focus as we test into other channels like social and digital media as well as when we deploy promotional campaigns like our back to travel campaign, which we ran the first in the U S. And then launched in the U K and across Europe.

We will continue to expand the diversity of our marketing and customer acquisition channels as we aim to drive incremental traffic to our platform.

Kris consumer awareness of our brands.

While we will remain focused on our efforts to grow and retain our customer base. We believe we will continue to benefit from the secular tailwind of more people booking their trips online instead of offline.

Historically, the accommodation industry has seen a steady increase in online share each year and looking ahead. We believe this trend will continue for the foreseeable future.

In April Mckinsey published 24 countries survey results showing that across our 11 major consumer facing industries channel.

Has the greatest percentage of customers that plan to increase their usage of digital channels. After the pandemic.

On the other side of our marketplace. We are focused on helping our supply partners reach a broader audience of potential customers our scale and global reach allows us to connect our supply partners with a significant amount of demand around the world demonstrated by the 845 million room nights.

Booked across our platforms in 2019.

In addition to being a large demand channel for our partners, we add value to our combination partners other ways by providing customer service support for travelers in over 40 languages localized partner service support teams market intelligence and debt.

Innovations in response to new traveler trends and fraud liability shift and access to alternative payment methods for payment enabled transactions.

Darren alternative accommodation.

I don't know hotel for a large global hotel chain, we strive to be a valuable partner to all types of accommodations on our platform.

In the second quarter.

We saw the first sequential increase from a number of properties on booking dot com and the lowest number of properties coming off of our platform in a quarter since the onset of the COVID-19 pandemic.

As of June 30, we had over 28 million reported listings on booking dot com.

$6.6 million were for alternative accommodation properties.

With an alternative accommodation from the U S booking dot com continue to add targeted new properties in the quarter and also saw encouraging share gains with some of our larger professional managers.

While all these for positive early developments, we recognize there is much work ahead to improve and grow our alternative a combination product in the U S market.

Our alternative accommodation for us in Europe was strong in the quarter and represented an increasing share of our European accommodations business.

I wanted to move to our key strategic priorities of expanding booking dot coms payment platform.

Building the connected tradition.

Both of which we believe will further enhance the strength of our core accommodations business and support its continued growth.

On our integrated payment platform at booking Dot com.

We made continued progress with increase the adoption of payments by our supply partners in the U S, including adding some major hotel chains in the second quarter.

Around 24% of booking Dot coms total gross bookings in Q2 were processed through its payment platform, which is up from about 22% for the full year 2020.

We recently announced the organization all of our payments initiatives and efforts into a new Fintech unit at booking Dot com.

The Fintech unit will be focused on enabling booking as core business to 1 better faster and more efficiently for both customers and our supply partners. In addition, we recognize that we have opportunities to better monetize our overall transaction flows in 2019, we did almost.

$100 billion of transaction value and we believe setting up a separate fintech EBIT better capitalized on these loans will benefit us in the long run.

On our connected trip vision I mentioned on our last earnings call that the development of the connected trip. This year will be focused on enabling travelers to book the major elements of their trip in 1 place on booking dot com.

The top priority of this on this front has been to scale up a robust flight platform on booking dot com, which will give us the ability to engage with flight bookers fully in their travel journey and allow us an opportunity to cross sell our accommodation and other services to these brokers since our last earnings call. We have launched our flow.

Product in 6 new markets and now live in 24 countries.

Tickets booked 2 bookings flight offering have continued to meaningfully exceed our expectations. However, he is still represented a small portion of our total reported air tickets, which were up 120% in Q2 versus Q2.2019, primarily this was driven by.

Price slide.

It remains early days for booking a flight product we are seeing positive data, indicating we are getting entirely new customers for booking dot com.

In addition, we are seeing an encouraging attach rate of a combination bookings from these new customers. These early data points helped demonstrate that our flight offering creates a new fund to bring incremental customers to the platform and then cross sell of an accommodation to these new customers we expect to continue.

To build on the early success, we are seeing with flight booking dot com.

In conclusion I am encouraged by the signs of recovery, we are seeing in some parts of the world and I'm confident that we will eventually see a strong recovery in travel demand globally.

We continue with our most important work to strengthen our companys position and <unk>.

Execute against our strategic priorities and our teams are working hard to support the strong summer travel season. This year in North America and Europe.

I said before we are thinking about our business beyond just getting back to 2019 levels of demand and we are focused on building a larger and faster growing business to generate more earnings after the full recovery and for the long run.

I will now turn the call over to our CFO, David Goldman Day.

Yeah.

Thank you Glenn and good afternoon.

I'll review, our operating results for the second quarter and provide some color on trends we've seen so far in the third quarter to.

To avoid comparison to pandemic impacted periods in 2020, all growth rates will be relative to comparable period in 2019, unless otherwise indicated.

Formation regarding reconciliation of non-GAAP results for GAAP results can be found earnings release now onto our results for the second quarter.

On our last earnings call, we discussed the improvement in trends in Q1, which continued into April driven by strong results from the U S and improvements in Europe.

On the earnings call, we saw the overall improvements in our trends accelerate in May and continue to get better in June which resulted in our Q2 reported room nights declined 26% versus Q2, 2019, which was significantly ahead of the 54% decline in Q1 for 43% decline we saw in April.

Expectations in May.

The improvement in Q2 room nights.

Our growth rate versus Q1 was driven by Europe, and the U S as well as better results in rest of World Europe.

Europe showed the greatest level of recovery in the quarter and actually achieved slight room night growth versus 2019 in June.

Booking trends in Europe, clearly benefited from a notable improvement in activation rates as well as loosening travel restrictions.

The U S was again the strongest performing major country in Q2, very strong room night growth versus 2019 for the full quarter.

Asia, partially offset the improvements in other regions with great room night declines in Q2 than in Q1 due to the increase in Covid outbreaks with related travel restrictions.

In the month of June our room nights were down 13% and our monthly active unique customer counts at booking dot com reached about 90% of the level. We saw in June 2019.

As Glenn mentioned, we are pleased to see the solid rebound in our customer base, our booking dot com as well as a healthy mix of new customers, which was only a little lower than the mix of new customers in Q2.2019.

Mobile bookings, particularly through our apps represented over 60% for our total room nights are up.

It continues to represent an increased percentage of our mobile bookings are direct channel increased by the percentage of our room nights year on year and relative to Q2.2019.

Domestic room nights grew in the mid teens in Q2.

While international room nights remained down significantly versus 2019, we saw a sequential improvement in our international bookings, resulting in the international mix of our room nights, increasing to about 25% in Q2 from about 15% in Q1.

Our cancellation rates improved from Q1 in line with Q2.2019 levels in the quarter.

The percentage of our Q2.2021 bookings made with flexible cancellation policies remained significant higher than in Q2.2019.

The booking window booking dot com remained shorter than it was in the second quarter of 2019, as we continue to see a higher mix of near term bookings. However, the booking window contracted less than it did in the prior 3 quarters.

The mix of alternative accommodation room nights from booking to come in Q2 was 32%, which is 3 points higher than Q1 in June our alternative accommodation room night growth was flat versus June 2019. The first time, we have reached 2019 levels for this segment since the start of Covid.

The sequential improvement from Q1 for Q2 was due primarily to the overall improvements in room night growth in Europe in the quarter. As we noted last quarter Europe is where we have our highest mix of alternative accommodations within Europe are mixed alternative credit as you remained about the same as Q1. This represents a continued increase from 2000.

19th 2020 and to 2021.

Gross booking declined 12% in Q2, which is less than the decline in reported room nights due to the increase in average day rates for accommodations or by 11% versus 2019 on a constant currency basis and also due to a few points of changes in FX rates and strong.

Performance in all <unk> business.

Our combination constant currency ADR benefited by about 7% from an increased mix of business in North America reached a high AUR region and a decrease of mix of business in Asia, which has a lower ADR region.

Excluding regional mix effects.

<unk> from currency.

Up approximately 4% driven mainly by rate increases in North America and in Europe.

Greece in North America grew driven by high levels of demand for beach oriented leisure destinations in Europe was driven by a higher mix of summer bookings, which have higher <unk>.

I want to take is booked in the second quarter were up 120% versus 2019, driven by strong growth of price line by flight bookings are booking dot com and Dakota, neither of which have flight for ops in Q2 to 2019.

We are encouraged to see another record breaking quarter for air ticket booking for offline business, which is a key component of our multi product connected trip strategy.

Consolidated revenue for the second quarter was $2.2 billion and decreased 44% versus 2019, which is better than our expectations revenue in the quarter declined meaningfully more than gross bookings due to bookings made in the quarter are expected to check in in future quarters at which point the revenue will be recognized.

Take rate for Q2 were about 10% largely driven by timing differences as you'll recall, we discussed the impact of timing on take rates in Q1, Q2 and for the full year. During our last call. We continue to expect these timing factors to impact for your take rates, although the second half of the year, we less negatively impacted.

First off for yet.

Removing the impact of timing our take rates on accommodation bookings in Q2 was stable versus Q2.2019.

The better than expected top line performance resulted in adjusted EBITDA of $48 million in second quarter, which came in better than our expectations with except in Q3 last year. This is the first EBITDA for the quarter since the first wave of Covid.

Marketing expense, which is a highly variable expense line decreased 29% versus 2019 marketing expense declined more than gross bookings due to higher rois in the pay channels and with the increase in our direct mix.

Sales of other expense in Q2, which is moving higher than they were in Q1, almost all basis other expenses as a percentage of revenue in Q2 was better than our expectations due to lower than expected bad debt and customer service related expenses.

Personnel expenses in Q2 for higher than they were in Q1 on a dollar basis.

Primarily due to the $176 million of expenses related to our decision to repay the government in the second quarter. Excluding this repayment personnel expenses in Q2 would've been in line with expectations for <unk>.

G&A expenses for both high in Q2's anywhere in Q1 on a dollar basis and were in line with our expectations.

We recorded a non-GAAP loss of $105 million in the quarter.

On a GAAP basis, we had an operating loss of $56 million in Q2, we recorded a GAAP net loss of $167 million in the quarter, which includes income tax expense of $126 million.

On a GAAP and non-GAAP basis in Q2, we recorded a tax expense on a pre tax loss due to higher earnings expectations for the full year relative to our expectations for Q1 for.

Full year, we expect our GAAP and non-GAAP tax rates to be slightly higher in 2019.

Now onto our cash and liquidity position our.

Our Q2, ending cash and investment balance.

<unk> $16.1 billion was down, but our Q1 ending balance of $16.4 billion. However, our Q1 ending balance benefited from the timing of the $2 billion raised in our euro bond offering, which we completed in March.

Subsequent redemption of the 2 higher coupon senior notes occurring in April adjusted.

Adjusted Q1, ending cash balance for the redemption of the 2 notes that happened in April would have resulted in an adjusted Q1 cash balance of $14.4 billion.

Q2, ending balance was harmless adjusted Q on balance primarily due to operating cash flow of $1.2 billion on $1.5 billion.

Realized gains all long term investments.

$2 billion of operating cash flow in the quarter was driven almost entirely by changes in working capital changes changes in working capital rather than the source of cash of $1.2 billion in the quarter due to the increase in our deferred merchant bookings in other current liabilities, partially offset by the increase in our accounts receivable.

We will continue to focus on maintaining a strong liquidity position given the continued uncertainty created by the Covid pandemic.

For the $16.1 billion net cash and investments into Q2 for 3 billion was related to our long term strategic investments and $11.7 billion with cash and short term investments. We ended the quarter with about $12.3 billion in debt, which is about $3.6 billion higher from a pre pandemic levels, we have a $1 billion convertible note maturing.

In Q3.

While our true of capital to shareholders will be an important components of our value creation strategy in the future. We remain on pause and we'll wait till reinitiate and so we believe each of our 3 major reasons regions is beyond the risk of a significant reversal in trends due to COVID-19.

We're not there yet given the current trends, we're seeing in Asia with our current close watch on how things are developing in Europe.

Now onto our force for third quarter.

With the recent rising tastes counts driven by Delta for the Delta variance in many countries. Some governments around the world for responded with new travel and leisure restrictions as well for some stricter vaccination and testing requirements for tourists.

However, there are indications for authorization rates are lagging the recent increases in case counts, particularly in countries with high vaccination rates, which could be an important factor in how governments plans their responses to the recent increase in Covid cases.

We're closely watching the UK, where the vaccination rate is high on the government to move forward with relaxing travel restriction, despite rising pace counts in the country, which are among the highest in Europe. We are encouraged by the recent declining new case counts and by the continued low level of hospitalizations in the EU and the U K compared with other outbreaks we.

Booking trends improve in the UK in July leading up to and after the travel restrictions are lifted on July on July 19th.

On July room nights declined about 22% versus 2019, which was a modest pullback from a 13% decline in June primarily just softening booking trends in Europe looking within Europe, we saw reductions in room nights in July across several other key countries, including Germany, France and it's.

But despite the recent pullback in these countries at the end of July we had a high amount of gross bookings on the books for the remaining summer period in Europe than we did at this same point in time in 2019.

Outside of Europe. The U S from seems to have very strong room night growth in July although modestly below Q2 levels, while Asia and rest of World room night decline for about the same in July as it were in June.

Asia continues to be the least recovered region in July and continues to be down significantly from 2019 levels.

The change in growth rates from June to July was similar for domestic and international room nights with domestic remaining positive and international room nights remaining down significantly versus 2019.

Given the recent additional uncertainty around Covid, driven primarily by the Delta Barrett, it's difficult to predict exactly how room nights in August and August and September we will compare with a 22% reduction we saw in July.

Turning to the income statement, we expect Q3 gross bookings declined several points less than room nights driven by expected improvements in reported.

My flight bookings.

We expect that the Q3 revenue decline will significantly improve from Q2, reflecting the strong improvement in bookings in the last few months I just mentioned, we have more gross bookings for summit.

This time in 2019 for Europe. The same is also true for North America.

We expect our Q3 revenue as a percentage of gross bookings will increase meaningfully from Q2 due to the high concentration of checking is expected in the third quarter and will be about in line with Q3.2019.

As a reminder, the exact relationship between revenue and gross bookings in Q3 will be impacted by how our bookings trend in August and September.

We expect marketing expenses in Q3 will decline several points less than gross bookings as we expect to invest in capturing demand and increasing awareness during the peak travel season and ahead for the continued global recovery of travel demand.

We expect sales and other expenses in Q3 were up significantly versus Q2 on dollar basis due to higher gross booking volumes in the third quarter as well as our mix as.

As well as an increase in the mix of gross bookings process on a merchant basis. However, we expect sales and other as a percentage of revenue in Q3 will be a bit lower than in Q2.

We expect our fixed expense categories in Q3 in aggregate to be about in line with Q2 on a dollar basis.

We expect Q3 EBITDA will be the highest since Q3.2019.

In conclusion, we are pleased with our better than expected results in Q2, which benefited from a recovery in travel demand and also reflects the strong fundamentals of our business and good execution by our teams we remain confidence and the eventual full recovery of travel demand globally, and we're looking for to a strong summer travel season. This year.

In North America, and Europe will continue to responsibly invest in our business to ensure we are well positioned for a full recovery of travel and for building a larger and faster growing business generates more earnings from price to the pandemic. We will now take your questions. Brent If you could open the lines for questions. Please.

Okay and at this time, if you would like to ask any questions sorry.

Sorry, 1 on your telephone keypad them for the.

Joel Your question press the pound key.

We'll pause for just a moment to compile the kidney Ross.

And your first question will come from the line of Kevin Kopelman from Cowen Your line is open.

Great. Thanks, a lot could you talk more about key drivers of your competitive share gains and it looks like youre seeing in the U S.

And would you say your growth in the U S. Over the past few months has been driven more by a traditional hotel or more by alternative accommodation.

So Kevin why don't I take a little listen I'll, let David add anything that he thinks I didn't put it that I should have said so.

So we are very pleased with the strong results that we're seeing in the U S. And that is a result of a lot of hard work for our team and a lot of it is just the blocking and tackling making sure that we're getting the right inventory at the right price to the right marketing presenting the write off for the customer at the right time and do it.

Bunch of things that we've been doing it for so long interest improving conversion Robert.

Testing all the things, we've always done blocking and tackling theres no silver bullet, there's no sense of Oh. This is the magic key to unlock extra demand in the U S. It's just a lot of very good work and <unk>.

Turns of alternative accommodations talked a little bit about how we are pleased to getting.

More inventory there, we're pleased with gaining some share with some of our professional managers, that's going well, but overall, it's everything that we do to improve our business to provide a better service for both sides of that marketplace for both the customers and offer and working with all of our suppliers from the biggest international change to a small.

The alternative accommodations and everything in between to make sure we're providing them with the demand they need to make their business successful David anything specific you want to answer that.

Glenn I think you summed it well just in response to your last.

Part of the question Kevin as.

As we said all our business in the U S is more heavily mixed 2.

Hotels alternatives that are global average. So therefore the growth rate has to be driven by volume. We don't have levels of growth that we're seeing without seeing strong growth in the hotel business.

Yes understood. Thanks, Glenn Thanks, David.

Your next question will come from the line of Mario Lu from Barclays. Your line is open.

Great. Thanks for taking the question I ask you on alternative accommodations.

So I believe you mentioned youre gaining share.

On the managed properties globally.

Can you provide some color on.

So what drove the share gain whether it was just mostly geo based or specific actions that you guys made on your end and then similarly, if you could share what percentage of the $6.6 million.

Listings are actually managed properties versus by individuals.

Yes.

Got a little backwards on that so we don't disclose the breakdown of all the different categories of our alternative accommodations. How many are professionally managed how many are single property owners and everything in between I have said in the past I'll repeat it that 1 of the areas that we do need to add more too is the single property owners. So we know that.

Is there a need to focus on in regards to your other question about how we're doing any share.

We spoke a little bit about that.

Prepared remarks, and what I just said now.

This is just working hard with people or the property owners for the managers people, who have inventory that want to get it filled it's a wonderful thing in this business that everybody knows empty bed at night zero revenue until that debt and you get an incredible margins.

They want to fill up their properties. So we are there to make sure that they know we're there to help fill that and doing all the things I mentioned before are making sure that we can bring to that demand.

David anything you wanted to disclose for them, but is there any different items I'm not sure if there's anything further debt.

No no no additional data points on the mix of $6.6 billion, while I would just clarify Mario is this the current that Glenn made about gaming.

Share gains with our larger professional managers are really related to how we're doing and that you asked the other specific U S. So as you can.

I'm not saying that's not the case, why but I'm, just saying that if you remember our strategy is to really get a lot of additional properties in the U S was the target.

More of the perpetual minded weighted.

On a quality supply available through those marriage again single property owner owned properties available for <unk>.

So the current we were making was there relative to what we're doing in the U S.

That's helpful. Thank you.

And your next question will come from Nevada, Ken from current Securities. Your line is open.

Yes, Thanks, a lot a couple of questions I think day.

I think I heard you say marketing efficiency.

<unk> was higher versus 2019, and I did some rough amount of bell for the bookings number.

No.

It was higher in the last quarters can you just maybe talk about.

What other drivers of efficiency and marketing and then.

Maybe 1 for 1.

1 for Glenn.

Maybe can you just talk about some reported certainly new flash sales being tested on the side, maybe David this year and what kind of interest and my understanding from hotels in terms of per station.

So David you want any debt first 1.

Yes, let me talk a little bit about box you what was going on I think I understood.

A question, but basically what you see was in Q.

Q2.

Our marketing expense the decline of our gross booking which is the way to look at it because if you look at your gross revenue for all different booking to say timing things in there. So look at it as a percentage of our gross bookings.

Does that ratio improved in the second quarter, So said differently.

Marketing expenses declined more than gross bookings debt 2 factors, we do see higher rois across.

Many of our.

Hey, Charles and we saw a couple of years ago, but we also saw a nice increase in mix towards direct as well. So the more we have direct makes analysis.

In the last week met with bank of marketing to attract those are new customers. So I'd say, nothing particularly unique to fall out in that.

The market environment is still.

I'd say fully stable, yet clearly, we're still going through a stage of recovery in the industry. So normal factors.

Comparable with where we were with 2019, but we were pleased to see that.

Why should improve now for my what I said about for Q3 implies that the opposite is likely to happen in Q3, obviously, we're only a month into Q3, but we also have forgotten.

Marketing spend in Q3, it is historically the core where we spend the most.

As for peak season, we wont recount for demand.

Customers are out that will also be increasing our spend brand spend in Q3 relative to Q2s for that 1.

Contributors to essentially what will be from deleveraging marketing spend relative to gross bookings in Q3.

So we'll see how the quarter develops but that's what we expect to happen in the third quarter and the first 2 quarters. We did see that in ROI are helping us create some leverage on the bottom line.

And regarding your question about flash deals if you read the same already from that I did I think there was something in there about there is no official response from booking so let me say that I have nothing to say specifically about this but let me reemphasize that we are putting a lot of effort into working cooperatively with our supply partners.

To get that incremental demand through all different ways being a better merchandize are providing more value to both sides of the marketplace is where we're going.

Understood. Thank you both.

And your next question will come from Deepak Matthew <unk> from Wolfe Research. Your line is now open.

Great.

Thanks, guys. Thanks for taking the question I wanted to ask a little bit about your experimentation with a more diversified marketing strategy historically performance marketing has been the 1 day.

Look the best for the space, how should we think about your approach with some of the other channel. So their specific objectives that you look for as kind of travel comes back to leverage into those channels.

And then the second question.

Kind of related to that but how should we think about your market share. During this time I know, it's still early and there's not a lot of data points yet but.

Any color that you can provide on how your market share is trending in some other markets where travelers recovering that'd be great. Thank you.

So regarding <unk>.

Diversifying our marketing efforts you are absolutely correctly built this company on doing a great great job with performance marketing channel. So we know that but what a lot of people don't know is that price same dotcom was very very successful in its early days in brand marketing and of course, we booking dot com regard for the U S. We have.

Lots of brand marketing the key thing in any type of marketing program is making sure that you are getting the ROI that you aren't again and we are going to continue to do that as I mentioned in my prepared remarks about how we are looking at new channels like social channels, you've seen by hope some other things that we've been putting out and we're going to continue to experiment.

All different ways to make sure we are reaching out for every pocket of demand, but we will always do it with the knowledge that is going to be cost effective it's got to produce in the long run because it takes longer for brand actually produce results. So we recognize that but in the long run is Scott at Brazil produced the results that we want and we're going to keep on doing that and I believe I really.

Believe that in the long run we will have many different ways that we're going to be bringing.

1 of the key things before you start spending a huge amount on our brand marketing campaign is making sure that you had the priorities where you want it and Thats 1 of the things that we are keen to do and perhaps the alternative accommodations area is really working to make sure in the U S. For example, so we've got that price the way we want.

For us to market shares.

Pleased with how we are doing right now I haven't seen results from some of our competitors and I'm not really day and go down country by country in terms of what our share sorry, but I am pleased with the results that we're achieving now let David say, if you want to give any specificity.

So Glenn I think you said it well.

We are pleased.

Have to wait and see when the dust settles I think market share is a better measure of of course of all the year.

For 2 quarters, we're only 2 quarters into the year.

But we're pleased with things with how things are going.

Growth rates relative to what we see happening out there, but well counts per count that as debt.

And over that it become more at the end of the year, we got some more concrete data on how the market actually developed.

Okay. Thank you so much.

And your next question will come from the line of Justin Post from Bank of America. Your line is open.

Great a couple of questions I guess first David can you revisit your comment about July traveler bookings being better than summer of 19, and what that means for revenues in the third quarter any any thoughts on that.

And maybe Glenn I.

I think you said June was back to 13% for.

From 2019, how does that make you feel about the confidence of a full travel recovery and then when we do recover maybe any high level thoughts on could your market share be higher could your margins be higher than 19, any any new thoughts you have on either of those items would be really helpful. Thanks a lot.

Alright, well, David you want to figure for you.

Yes, Scott with just to kind of make sure that.

What we're saying so to re calibrate with restate, what we said.

We have more gross bookings for.

For the summer for the remains some.

Bumps.

The same time in 2019 items.

And July in 2019 than we had.

At that same time for Europe, and North America, So assuming that cancellation rates stayed at the same day and that would potentially result in more revenue in those markets for.

For the summer months for the remains.

No I did notice.

I'd also point out that we will have debt.

We have a high percentage of cancel bookings out of that.

Refundable bookings out there that we had at the same time in 2019 as well so theres obviously some risks.

More of those bookings council when they were done in the same period of time that means basically that.

For potential revenue base for the summer is higher now in those new markets than it was in 2019 now obviously the offset debt is what's happening in Europe, sorry in Asia, and what's happening in rest of world.

We don't have that situation the revenue for the bookings on the books, which will be potential revenue in those markets up substantially below where they were at the same time.

July in 2019.

Ken.

I would say that nobody knows when this full recovery is going to happen.

And I think everybody is able to throw a dart viceroy throwing darts given all the variations that are happening. These new variance come out we've seen the impact there come from the thing that I continue to assess how much we are very confident and I think everybody is debt. This will end at some point and we will come out of it strongly now we've talked to.

About this a bit.

In the past about how we want to come out of this we want to have a bigger business, making more EBIT dollar.

Growing faster, but we've also talked a bit about margins, where we have a commitment we want to be a leader in the index. The leader in the industry in terms of our margin or EBITDA margin, but we recognize that a lot of things that we're doing nowadays can actually end up with a lower margin. Obviously are for example, I mean, it's.

Wonderful when we say 120 per cent increase over 2019 and air tickets I ask wonderful, but we all know those margins are nowhere near what they are and the combination business and I can go on a different examples the key thing for us and for our shareholders. I believe is coming back with more EBIT dollars.

We continue to grow that business. So there's more of that that's the way we're looking at it.

Great. Thank you.

Yeah.

And your next question will come from Doug Anmuth from JP, Michael Your line is open.

Hi, This is day to day on for Doug Thanks for taking the questions.

For Glenn.

In your prepared remark you talked about better monetize the transaction flow and the 1 other drivers.

2 the accretion of the spin.

So just curious what's the opportunity that you're seeing there.

That will affect.

User experience as well or more focused on the Bakken and then second 1 for David a follow up question on the sales and marketing ROI.

I will call new higher Rois thoughts for US again this quarter, just so I am curious if this.

As a result for something that Youre doing there from the hours, there's just more on the outcome.

Due to the competitive dynamic.

Advertising channels.

Yes.

So in terms of the Fintech unit there are many opportunities for us with a slow in $2019.100 billion worth of transaction volume through there. We know that there are ways that we can save money for the consumers and suppliers both sides and we can make good money on it to a new.

Long run so it is coming up for things like providing better FX tool.

Things for example, making sure that if somebody wants to pay in an alternative.

Payment method that we're able to provide that it means making sure that we can do a better job with different types of regulations in terms of.

Making sure that any type of transaction is not fraudulent it's all sorts of things as a player at.

At scale, we can do things that many many many other partners with our partners could not do any sales or providing convenience to our customers who want it but our suppliers can't do it on their own and there are lots of different things that we can do even things as simple as our Fintech unit setting something up like our <unk>.

Electronic wallets that enables us to easily provide value to that customer, which can come from a supplier or it can be some net we're promoting ourselves all different things. So what I see is not only the basics that we need to make our connected trip work, which of course you have to have that if you want to create a connected.

Trip with a single price 0.1 person pays what amount, but it's all the other types of things that we can provide that others really can't do on their own right now.

Yes.

On the on the second quarter Rois, all playbook really has not changed in our strategy and the performance marketing channel did not change we continue to seek new high quality traffic at the right price and to us high quality means on converting traffic low lower probability cancellation, which worked very carefully on a hyper growth coming back for us on a day right.

The notice for things that kind of go into operating strategy plus all the dynamics that occurred in each of those marketplaces. So we expect there'll be ROI volatility throughout the recovery.

Of course, we also look at what the available demand is when their time, Scott leading versus leading more we are certainly looking at least have an opportunity to win customers onto our platform and get new customers and we mentioned a very healthy mix of new customers on.

In the business quite similar so it makes as it was in the Q2 thousand 19. So we're pleased with how things are going we like the way that we are bringing back existing customers. We like the way we are winning new customers. We are pleased to see for existing customers come back generally much more directly from the new customers, which you would expect.

The playbook so.

Many factors going to those ROI calculations, including cost per click conversion rates cancellation rates and we're still in a period of relatively high volatility in each of our compared to where we were in 2019.

Got it thank you.

And our next question will come from Brian Nowak from Morgan Stanley. Your line is open.

Hi, This is Alex Wang on for Brian. Thanks for taking the question 2 questions.

I think you mentioned.

Your monthly traffic on booking dot com is back to about 90% of pre pandemic, which is encouraging particularly as from the headwinds you're calling out in Asia. Just curious if youre able to segment out any differences in behavior on that new versus existing cohort and going forward any strategies to <unk>.

Sort of grow those bases.

Separately.

Second question around air like it sounds like there is a lot of momentum there I was just curious on your views on some.

Some of the <unk>.

Remaining execution hurdles you see for for that initiative and any plans for sort of grow consumer awareness for the new air product.

So I'll take the Air Force and we'll see what David wants to say or not say about breakup of our customer base.

<unk> Air obviously price line has been doing it forever since the company started because in the U S only and booking dot com only got going this very very recently as I mentioned.

24 countries nice, but that's a lot of countries that we havent touched yet that has to be done and there are certainly things that need to be done to really true air product at booking dot com.

I'm not going to list them, all but I see a lot of ways, we can make that even better than it is and thats a little bit while we haven't done any real large marketing effort on.

On the air side, Yes, we kind of have talked a little bit before us before you start really market. So to make sure you got the product the way you want it. So it is so encouraging that we're doing well with it right now even though I see a lot of things that still need to be done to improve that product.

Net we're really pleased with is seeing.

The attachment rate again from something that we obviously.

Obviously, the reason that we wanted to do this is not just to sell tickets to actually get some of those higher margin for those combinations and build out that connected trip. So it's nice to see it as very early stage.

<unk> listened carefully I think very early stage, we're seeing good results. So I do see a lot of opportunity here in the future, but we won't be breaking out any sort of marching on it until I feel that we have the product where we wanted to be.

And David if you want to talk about the other 1.

A lot more to say I think we wanted to actually help will give you some data points understand how the active customers, but it has to be brought to you.

We are booking on the site.

Have recovered in the mix.

Healthy mix of new customers only slightly below what we saw in Q2.19 I think those are good signs so I don't want to get into the segmentation.

And our customers. Obviously, there are some customers who book very often from coast to total book quite as much and we kind of love the mall, but we want to make sure we kind of treat it differently I would say that's part of the reason why we have a genius program of course.

For the more often you work with us or bookers on booking dot com or you can move up the genius louder and you get more benefits.

From a genius program, which I think a nice way of driving loyalty. So other than the data point for you given outflows, which we thought would just be helpful.

Sales in the grounds people understand what's going on within the business I don't want to get into any further details.

Okay. Thank you.

And your next question will come from Mark Mahaney from Evercore. Your line is open.

Hey, thanks.

I guess I'll just follow up on that keeps sticking with the air and I guess learnings to date and.

Talk about this is is this a new customer acquisition tool. As this is just this is a this is a cross sell product do you notice greater engagement.

With the with the people in those 24 markets, where you've rolled it out with booking.

Does this increase the overall spend frequency of purchase.

Have you seen so far and maybe it's all too early.

I guess, if youre going to respond that way then I'll ask when do you think youll have a decent read into what impact if any permanent if it's had a permanent impact on your booking dot com customer base. Thanks.

Hi, Mark.

So it's just what you said and say too early but I will add a little bit more than half of that a little more to that in a sense.

Very pleased because we haven't been out really marks from this yet new customers are coming to the site and then we're seeing them get.

Attractive.

Cross sell debt, then I really like seeing that as a sign that this is the right direction that we're going in now.

I had a good sense that was going to happen anyway, because we didn't seem to happen in price line for sure.

2 decades, where that's been happening.

Good confidence that this would happen, but it's something that I believe we want to have a lot more.

Data before we share coming back you'll start showing you here is what the attachment rates are heroes compares to price lines here for what we see industry and how many new people are coming from the air funnel versus the others.

Leave everyone with a sense that we're very pleased this is bringing us new customers new customers, who are buying not just flight tickets for some of them are buying hotels too. This is proving out a little bit of our long term vision on this connected trip now do I expect that to happen with something like a.

Activities.

I'm not really think a lot of people are going to come for an activity first and then they're going to buy a flight or then theyre going to buy a hotel that's going to be a lot more the other way and helping produce the loyalty and the repeat business that we talked about and then goes into the all the things I was talking about in terms of using a wallet. So we can give credits now different suppliers being able to promote different offerings and different ways to different customer.

All of that spin together, increasing that flywheel and that's what we're trying to achieve and it is just so great to see it start happening right now even though it's very early.

Okay. Thanks, Glenn.

And your next question will come from Vince CFL from <unk> your.

Your line is open.

Great. Thanks for taking my question I wanted to talk a little bit about your perspective on leisure versus corporate I believe you historically see about 80% of the business and leisure. So first there are some markets are running 15%, 20% ahead of 19 levels and I'm curious your perspective on.

The long term trend line within leisure and how Covid has changed that maybe people's ability to work remote.

You mentioned more leisure business shifting online with debt Mckinsey study, but just curious how you think about leisure over the long run and then the second part is on the corporate side any early indications of recovery there and how you think that evolves through the second half of this year.

Yes, let me give generalities about what I think about leisure versus business in our core business General and what I think is going to be happening in the future. David go back and talk about what we've disclosed in the past about the mix. So you are right in the sense that we are much more leisure oriented and much of our business travel.

As small business people. These are people who are doing their own travel. This is not part of the big travel management company operations. So it's a little bit differently, when we have business travelers.

Ex somewhat similar to leisure sometimes.

As we've all seen this debt leisure is out of the out of the gate much faster than any business trial, which makes perfect sense because on 1 hand you.

You have business people will say there is a risk factor when you put people in travel et cetera, and there's also the issue of course, why how people travel, but you don't have to that second part I think is very key for the future of the business I believe that they are still going to be resistance by CFO and other people who are cost conscious and their businesses about do we really have to have all the trials.

In the past, maybe not because with these new technologies, so that we seem to be pretty effective.

S M somebody from New York to London, and $15000 for a 1 day meeting.

That's going to somewhat change.

The business travel was done yes, there'll be fewer people upfront of the plane and spending a lot of money on those very high cost 5 star hotels, et cetera, which will change things a little bit for us.

So it's not going to impact us negatively so much in fact, it may help US is there is more availability that needs to get filled up.

The other thing you mentioned zone, which means you see how it plays out though with more people being able to work from home and deciding G. I think Friday is going to work from somewhere else and have a Friday Saturday Sunday for a Thursday Friday Saturday Sunday.

Many holiday somewhere working Thursday, Friday, but in a different location how much is that going to actually build more travel uncertainty. This time since everybody is still shifting around what's the way to work in the future how many days for our officers. How many days are we not in August nobody knows the answer to that yet and its going to take a long time to play out but.

New hope that we'll hopefully build out more travel we'd like more travel. So there's a lot of uncertainty about this and nobody really knows and even as much as I've heard the encouraging signs from some of the suppliers, particularly from the airlines I saw a Deloitte report came out a couple of days ago, maybe yesterday and what's the expectation of corporate travel was new.

Not as optimistic in the near term. So I think we would have to say, we don't know, we'll find out as it rolls out and David I know if you want to give anything more to that just for the numbers for us in business travel.

He quoted im not sure those right or not.

No. The number first of all we haven't given a recently but.

Over 80%.

Leisure.

As we said.

Business first of all it's a self declared metric when you make a booking so it's hard to be precise about it but the <unk>.

Business travel, we do have as much more organized business travel as Glenn explained so we're heavily biased towards the larger segments.

Thank you.

And our last question will come from Jed Kelly from Oppenheimer. Your line is open.

Okay, great. Thanks for taking my question 2 if I may just as you sort of you mentioned earlier in your prepared remarks that youre gaining share with professional property managers can you sort of talk about like your supply strategy heading into this winter in the U S trying to increase that single unit.

Inventory.

Then can you give us an update on our APAC is treading trending, particularly with <unk>. Thank you.

I'll, let David talk.

Day about Asia in general and regarding the share I just would be a little careful we said we're pleased with debt. We are doing better we are gaining share.

Gaining share with the professional managers and I like what we're seeing there is going to be a long haul in terms of building out the U S inventory for all types of alternative accommodations, whether it be professionally managed and getting as many as we walk there for single property is going to be a while to get to where we want to be in that I just want everybody to understand.

So this is a goal that we're working on hard by having boots on the ground talking with managers, sending out the right information getting people to understand why we have a great proposition for them and I'm confident we're going to do that when you look from what we've achieved in Europe, you look at the share of our Ontario accommodations in Europe, you say boy that's the goal to have in the U S.

2 we should be pushing for that Theres. No reason, we showed customers are similar the proposition is similar there is nothing that we shouldnt be no reason, we shouldn't be able to achieve that over time, but it's going to take time.

And David I know, if you want how about a little bit there.

Yes, So Asia.

APAC I mentioned that the room night growth was was worse in Q2 that was in Q1, so that region deteriorated counteract some of the benefits from strength, we saw in Europe and North America.

With booking and Dakota sizable businesses in.

In APAC from a low clearly that's the majority of <unk>. So the whole region very depressed as you know vaccination rates are lagging in most parts of Asia also response to Covid outbreaks tends to be more aggressive.

And restrictions are put in place more quickly.

Based upon outbreaks in the Asia region across almost all countries. So.

So travel levels very low, particularly in.

International travel levels exceptionally low and still a long way to go no recovery in Q2, it got worse in Q2 versus Q1.

Thank you.

And that concludes our Q&A I will turn the call over to back to Glenn Fogel for closing remarks.

Thank you.

So in closing I want to reiterate our strong belief.

Industry is full recovery will be hastened by everyone, who can get a vaccine going out and getting it.

All people, who are approved for a medically able to be vaccinated to do their part to make our society safer and go out and get a vaccine and.

And as always I want to thank our partners our customers dedicated employees and our shareholders. We appreciate your support as we continue to build on our long term vision for our company.

Thank you and please be safe Goodnight.

And that concludes our conference call. Thank you for participating you may now disconnect.

[music].

Okay.

Yes.

[music].

Welcome to booking holdings second quarter plenty plenty 1 conference call.

Booking holdings would like to remind everyone that this call may contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

These forward looking statements are not guarantees of future performance and are subject to certain risks uncertainties and assumptions that are difficult to predict.

Therefore actual results may differ materially from those expressed implied or forecasted in any such forward looking statements.

Expressions of future goals or expectations, and similar expressions, reflecting something other than historical fact are intended by.

Are intended to identify forward looking statements.

For a list of factors that could cause for booking holdings actual results could differ materially from those described in the forward looking statements. These are for it that is safe Harbor statements at the end of booking holdings earnings press release as well as booking Holdings', most recent filings with the securities.

And Exchange Commission.

Unless required by law booking holdings undertakes no obligation to update publicly any forward looking statements, whether as a result of new information future events or other life a.

A copy of booking holdings earnings press release, together with an a compelling financial and statistical supplement is available in the for investors section of booking holdings website, Www Dot booking holdings dotcom.

And now I would like to introduce booking holdings free speaker for this afternoon. Mr. Glad for golf you May begin your conference.

Thank you and welcome to booking holdings second quarter Conference call.

I'm joined this afternoon from by our CFO David go.

I'm encouraged by another quarter of meaningful improvement in our accommodations business with Q2 room night up sequentially, 59% versus Q1.

This compares very favorably to our pre pandemic historical pattern of a slight decline in Q2 room nights versus Q1.

Compared with 2019, Q2 room nights were down, 26%, which was significantly better than the 43% decline. We previously reported for the month of April and a 54 per cent decline in Q1.

The acceleration in the second quarter was primarily driven by domestic international booking trends in Europe.

During a ramp up in vaccination rates and the relaxation of many travel restrictions in the region.

The growth of international bookings from Europe was mainly from bookings within the European region.

They're very strong room night growth in the United States that we saw in April and highlighted at our last earnings call continued in May and June.

A very strong U S room night growth for the full quarter versus Q2.2019.

David will provide additional details on our second quarter results in his remarks.

We are of course closely monitoring the impact of the Delta Barry on the wires in Covid case count around the world as well as some newly imposed travel restrictions, which have led to a modest pullback in our booking trends in the month of July relative to June.

Hello.

July booking trends were improved from our full Q2 results.

While the wars of adult with Barry and demonstrates the volatility and uncertainty.

M timing and shape of the recovery for travel we remain confident that we will eventually see a strong recovery in travel demand globally.

The sharp return to growth initially in the U S. Net of the European markets that we have witnessed this year shows clearly that leisure travelers are eager to get back to booking trips on our platform when restrictions are lifted and customers are able to travel.

We expect to be much closer to our 2019 revenue levels in Q3 than we were in Q2 driven by the strong booking improvements we have seen in the last few months.

As we've done throughout the pandemic.

We'll continue to build on the strengths of our core accommodation business and support its long term growth.

The strength of our core business comes from the flywheel effect, we get from our 2 sided marketplace, where we drive benefits to our traveler customers and our supplier partners alike.

For our customers, we strive to deliver the best choice of accommodations offer the most value and provide the easiest booking experience all backed by excellent customer service and support.

Addressing these critical needs of choice value.

And EPS, we create a superior booking experience and strengthen our relationships with our customers I'm pleased to report that booking dot com, we're seeing pre pandemic customers coming back to us to book their trips, while also attracting new customers and the current mix of prior of new customers is new.

Not significantly different than prior to the tender.

1 other ways, we drive value for our large customer base that booking dot com is through our genius loyalty program.

Our app is an important way, we deliberate easier booking experience to our customers.

Globally in Q2 booking dot com was the number 1 downloaded app.

According to a third party research firm in.

In the U S. In Q2, we were the most downloaded major otas app downloads of the booking dot com app in the second quarter significantly increase sequentially.

We also saw U S app user in Q2 meaningfully surpass the prior peak observed for the Covid pandemic.

In the second quarter, we again saw a higher mix of our customers booking directly with us than in the comparable period in 2019.

It is encouraging to see these gains even as we look for opportunities to lean into performance marketing channel, where we see attractive rois.

We have a long history.

Effectively managing our performance marketing channels to bring brokers to our platform profitably. We plan to continue with this proven approach in the future.

In addition.

Leveraging our marketing expertise and ROI focus as we test into other channels like social and digital media as well as when we deploy promotional campaigns like our back to travel campaign, which we ranked first in the U S. And then launched in the UK and across Europe.

We will continue to expand the diversity of our marketing and customer acquisition channels as we aim to drive incremental traffic to our platform.

Kris consumer awareness of our brands.

Historically, the accommodation industry has seen a steady increase in online share each year and looking ahead. We believe this trend will continue for the foreseeable future.

In April Mckinsey published 24 countries survey results showing that across our 11 major consumer facing industries channel.

Has the greatest percentage of customers that plan to increase their usage of digital channels. After the pandemic.

On the other side of our marketplace. We are focused on helping our supply partners a broader audience of potential customers our scale and global reach allows us to connect our supply partners with a significant amount of demand around the world demonstrated by the 845 million room nights.

Across our platforms in 2019.

In addition to being a large demand channel for our partners, we add value to our accommodation partners other ways by providing customer service support for travelers in over 40 languages localized partner service support teams market intelligence and debt.

Innovations in response to your new traveler trends and fraud liability shift and access to alternative payment method for payment enabled transactions.

Darren alternative accommodation or independent hotel for a large global hotel chain, we strive to be a valuable partner to all types of accommodations on our platform.

In the second quarter.

We saw the first sequential increase in the number of properties on booking dot com and the lowest number of properties coming off of our platform in a quarter since the onset of the COVID-19 pandemic.

As of June 30, we had over 28 million reported listings on booking dot com.

$6.6 million were for alternative accommodation properties.

And alternative accommodations in the U S booking dot com continued to add targeted new properties in the quarter and also saw encouraging share gains with some of our larger professional managers.

While all these for a positive early developments, we recognize there is much work ahead to improve and grow our alternative accommodation product in the U S market.

Our alternative accommodation for this in Europe was strong in the quarter and represented an increasing share of our European accommodations business.

I wanted to move to our key strategic priorities of expanding booking dot coms payment platform.

And building the connected trip vision.

Both of which we believe will further enhance the strength of our core accommodations business and support its continued growth.

On our integrated payment platform at booking Dot Com. We've made continued progress with increase the adoption of payments by our supply partners in the U S, including adding some major hotel chains in the second quarter.

Around 24% of booking Dot com total gross bookings in Q2 were processed through its payment platform, which is up from about 22% for the full year 2020.

We recently announced the organization all of our payments initiatives and efforts into a new Fintech unit as booking dot com.

For the Fintech unit will be focused on immediately booking as core business to run better faster and more efficiently for both customers and our supply partners. In addition, we recognize that we have opportunities to better monetize our overall transactions loans in 2019, we did almost.

$100 billion of transaction value and we believe setting up a separate fintech EBIT better capitalized on these flows will benefit us in the long run.

On our connected trip patient volume.

Mentioned on our last earnings call that the development of the connected trip. This year will be focused on enabling travelers to book the major elements of their trip in 1 place on booking dot com.

Net top priority of this on this front has been to scale up a robust flight platform on booking dot com, which will give us the ability to engage with flight bookers fully in their travel journey and allow us an opportunity to cross sell our accommodation and other services to these brokers since our last earnings call. We have launched our flight.

Product in 6 new markets and now live in 24 countries.

Air tickets booked 2 bookings flight offering.

To meaningfully exceed our expectations. However, you still represented a small portion of our total reported air tickets, which were up 120% in Q2 versus Q2.2019, primarily this was driven by price slide.

It remains early days for booking flight product, we are seeing positive data, indicating we are getting entirely new customers for booking dot com.

In addition, we are seeing an encouraging attach rate of a combination bookings from these new customers. These early data points help demonstrate that our flight offering creates a new fund to bring incremental customers for the platform and then cross sell of an accommodation to these new customers we expect to continue.

To build on the early success, we are seeing with flight booking dot com.

In conclusion.

Encouraged by the signs of recovery, we are seeing in some parts of the world and I'm confident that we will eventually see a strong recovery in travel demand globally.

We continue with our most important work to strengthen our companys position and M.

Execute against our strategic priorities and our teams are working hard to support the strong summer travel season. This year in North America and Europe.

I will now turn the call over to our CFO, David Goldman Day.

Yeah.

Thank you Glenn and good afternoon.

I'll review, our operating results for the second quarter and provide some color on trends we've seen so far in the third quarter.

To avoid comparison to pandemic impacted periods in 2020, all growth rates will be relative to comparable periods in 2019, unless otherwise indicated.

Information regarding reconciliation of non-GAAP results for GAAP results can be found earnings release now onto our results for the second quarter.

On our last earnings call, we discussed the improvement in trends in Q1, which continued into April driven by strong results in the U S and improvements in Europe.

On the earnings call, we saw the overall improvements in our trends accelerate in May and continues to get better in June which resulted in our Q2 reported room nights declined 26% versus Q2, 2019, which was significantly ahead of the 54% decline in Q1 for 43% decline we saw in April.

Expectations in May.

The improvement in Q2 room night.

Our growth rate versus Q1 was driven by Europe, and the U S as well as better results in rest of world.

Europe showed the greatest level of recovery in the quarter and actually achieved slight room night growth versus 2019 in June.

Trends in Europe, clearly benefited from a notable improvement in vaccination rates as well as loosening travel restrictions.

The U S was again the strongest performing major country in Q2, very strong room night growth versus 2019 for the full quarter.

<unk>, partially offset the improvements in other regions with great room night declined in Q2 than in Q1 due to the increase in Covid outbreaks with related travel restrictions.

In the month of June.

<unk> were down 13% and our monthly active unique customer counts at booking dot com reached about 90% of the level. We saw in June 2019.

Mobile bookings, particularly through our apps represented over 60% for our total room nights are up.

It continues to represent an increased percentage of our mobile bookings are direct channel increased as a percentage of our room nights year on year and relative to Q2.2019.

Domestic room nights grew in the mid teens in Q2.

Our cancellation rates improved from Q1 and were in line with Q2.2019 levels in the quarter the.

The percentage of our Q2.2021 bookings made with flexible cancellation policies remained significant higher than in Q2.2019.

The mix of alternative accommodation room nights from booking about calling Q2 was 32% which is 3 points higher than Q1.

In June our alternative accommodation room night growth was flat versus June 2019. The first time, we have reached 2019 levels for this segment since the start of Covid.

The sequential improvement from Q1 for Q2 was due primarily to the overall improvements in room night growth in Europe in the quarter. As we noted last quarter Europe is where we have our highest mix for alternative combinations within Europe are mixed alternative credit as you remained about the same as Q1. This represents a continued increase from 2000.

19th 2020 and to 2021.

Gross booking declined 12% in Q2, which is less than.

The decline in reported room nights due to the increase in average day rates for accommodations or by 11% versus 2019 on a constant currency basis and also due to a few points of changes in FX rates and strong performance in all flights business.

Our combination constant currency ADR benefited by about 7% from an increased mix of business in North America reached a high AUR region.

Decrease in mix of business in Asia, which has a lower ADR region.

Excluding regional mix effects current.

And currency.

Approximately 4% driven mainly by rate increases in North America and in Europe to.

The increase in North America were driven by high levels of demand for beach oriented leisure destinations in Europe was driven by a higher mix of summer bookings, which have higher <unk>.

I wanted to take this booked in the second quarter were up 120% versus 2019, driven by strong growth of price line by flight bookings are booking dot com on the go to neither of which have white box in Q2 to 2019.

You are encouraged to see another record breaking quarter for air tickets booked through off price business, which is a key component of our multi product connected trip strategy.

Take rate from Q2 were about 10% largely driven by timing differences as you'll recall, we discussed the impact of timing on take rates in Q1, Q2 and for the full year. During our last call. We continue to expect these timing factors to impact for your take rates, although the second half of the year, we less impacted.

The first half for yet.

Removing the impact of timing our take rates on accommodation bookings in Q2 was stable versus Q2.2019.

The better than expected top line performance resulted in adjusted EBITDA of $48 million in second quarter, which came in better than our expectations with except for Q3 last year. This is the third.

EBITDA for the quarter since the first wave of Covid.

Marketing expense, which is a highly variable expense line decreased 29% versus 2019 marketing expense.

Climbed more than gross bookings due to higher rois in the pay channels and with increased mix.

Sales.

In Q2 was significantly higher than they were in Q1, almost all basis other expenses as a percentage of revenue in Q2 was better than our expectations due to lower than expected bad debt and customer service related expenses.

Personnel expenses in Q2 for higher than they were in Q1 on a dollar basis, primarily due to the $136 million of expenses related to our decision to repay the government in the second quarter. Excluding this repayment personnel expenses in Q2 would've been in line with our expectations.

G&A expenses for both high in Q2 than they were in Q1 on a dollar basis were in line with our expectations.

We recorded a non-GAAP loss of $105 million in the quarter.

On a GAAP basis, we had an operating loss of $56 million in Q2, we recorded a GAAP net loss of $167 million in the quarter, which includes income tax expense of $126 million.

On a GAAP and non-GAAP basis in Q2, we recorded a tax expense on a pre tax loss due to higher earnings expectations for the full year relative to our expectations for Q1 for <unk>.

Full year, we expect our GAAP and non-GAAP tax rates to be slightly higher in 2019.

Now onto our cash and liquidity position.

Our Q2, ending cash and investment balance of $16.1 billion was down, but our Q1 ending balance of $16.4 billion. However, our Q1 ending balance benefited from the timing of the $2 billion raised in our euro bond offering, which we completed in March.

Subsequent redemption of the 2 highest coupon senior notes occurring in April.

Adjusted Q1, ending cash balance for the redemption of the 2 notes that happened in April would've resulted in net.

Adjusted Q1 cash balance of $14.4 billion.

Q2, ending balance was higher mix adjusted Q on balance primarily due to operating cash flow of $1.2 billion and $1.5 billion.

Unrealized gains all long term investments.

For $2 billion free cash flow in the quarter was driven almost entirely by changes in working capital.

Change in working capital represented a source of cash of 1 for Cuba and all in the quarter.

The increase in orders for a bunch of bookings in other current liabilities, partially offset by the increase in our accounts receivable.

We will continue to focus on maintaining a strong liquidity position given the continued uncertainty created by the Covid pandemic.

In Q3.

We're not there yet given the current trends, we're seeing in Asia with our current close watch on how things are developing in Europe.

Now onto our force for third quarter.

With the recent rising taste accounts driven by Delta for the Delta variance in many countries. Some governments around the world for responded with new travel restrictions as well for some stricter vaccination and testing requirements for tourists.

However, there are indications that authorization rates are lagging the recent increases in case counts, particularly in countries with high vaccination rates, which could be an important factor in how governments plan their responses to the recent increase in Covid cases.

We are closely watching the UK, where the vaccination rate is high on the government to move forward with relaxing travel restriction. Despite rising page counts in the country, which are among the highest in Europe. We are encouraged by the recent declining new case counts and by the continued low level of hospitalizations in the EU and the U K compared with other outbreaks we.

So our booking trends improve in the UK in July leading up to and after the travel restrictions were lifted on July on July 19th.

Our July room nights declined about 22% versus 2019, which was a modest pullback from a 13% decline in June primarily just softening booking trends in Europe looking within Europe, we saw reductions in room nights in July across several other key countries, including Germany, France and its.

Outside of Europe. The U S continues to have very strong room night growth in July below modestly below Q2 levels, while Asia and rest of World room night decline for about the same in July as you were in June.

Asia continues to be the least recovered region in July and continues to be down significantly from 2019 levels.

The change in growth rates from June to July was similar for domestic and international room nights with domestic remaining positive and international room nights for remaining down significantly versus 2019.

Given the recent additional uncertainty around Covid, driven primarily by the Delta Darren it's difficult to predict exactly how room nights in August and August and September will compare with a 22% reduction we saw in July.

Turning to the income statement, we expect Q3 gross bookings declined several points less than room nights driven by expected improvements in reported.

My flight bookings.

This time in 2019 for Europe. The same is also true for North America.

As a reminder, the exact relationship between revenue and gross bookings in Q3 will be impacted by how our bookings trend in August and September.

We expect marketing expenses in Q3, we will decline several points less than gross bookings as we expect to invest in capturing demand and increasing awareness during the peak travel season and ahead of the continued global recovery of travel demand.

We expect sales and other expenses in Q3 to be up significantly versus Q2 on dollar basis due to higher gross booking volumes in the third quarter as well as the mix as.

As well as an increase in the mix of gross booking process on a merchant basis. However, we expect sales and other as a percentage of revenue in Q3 will be a bit lower than in Q2.

We expect our fixed expense categories in Q3 in aggregate to be about in line with Q2 on a dollar basis.

We expect Q3 EBITDA will be the highest since Q3.2019.

In North America, and Europe will continue to responsibly invest in our business to ensure we are well positioned for a full recovery of travel and for building a larger and faster growing business generates more earnings than price for the pandemic. We will now take your questions. Brent If you could open the line for questions. Please.

Okay and at this time, if you would like to ask any questions Press star 1 on your telephone keypad.

Your question press the pound key.

Pause for just a moment to compile the <unk> roster.

And your first question will come from the line of Kevin Kopelman from Cowen Your line is open.

Great. Thanks, a lot could you talk more about the key drivers of your competitive share gains is it looks like youre seeing in the U S.

And would you say your growth in the U S. Over the past few months has been driven more by a traditional hotel or more by alternative accommodation.

Yes.

So Kevin why don't I take a little listen I'll, let David add anything that he thinks I didn't put it that I should've said. So we are very pleased with the strong results that we're seeing in the U S and that is a result of a lot of hard work for our team.

Lot of it is just the blocking and tackling and making sure that we're getting the right inventory at the right price to the right marketing presenting the write off for the customer at the right time and doing a bunch of things that we've been doing it for so long in terms of improving conversion a lot of AB testing all the things we've always done blocking and tackling there is no.

Silver bullet Theres no sense Oh this is the magic key.

Unlock extra demand in the U S. It's just a lot of very good work.

In terms of alternative accommodations, you've talked a little bit about how we are pleased to getting.

More inventory there, we're pleased with gaining some share with some of our professional noninterest ex going well, but overall, it's everything that we do to improve our business provide a better service for both sides of that marketplace for the customers paid off for and working with all of our suppliers from the biggest international chains small.

For alternative accommodations and everything in between to make sure we're providing them with the demand they need to make their business successful David anything specific you want to answer that.

Glenn I think you summed it well I'll just in response to your last.

Part of the question Kevin as.

As we said all our business in the U S is more heavily makes 2.

Hotels alternatives on a global average so therefore the growth rate has to be driven by both we have levels of growth that we're seeing without seeing strong growth in the hotel business.

Yes understood. Thanks, Glenn Thanks, David.

Your next question will come from the line of Mario Lu from Barclays. Your line is open.

Great. Thanks for taking the question I ask you on the alternative accommodation.

So I believe you mentioned youre gaining share.

On the managed properties globally. So can you provide some color on.

So what drove this share gain whether it was just mostly geo base or specific actions that you guys made on your end and then Tim.

Clearly you could share what percentage of the $6.6 million.

Listings are actually managed properties versus by individuals.

Got a little backwards on that so we don't disclose the breakdown of all the different categories of our alternative accommodations. How many are professionally managed.

Our single property owners and everything in between I have said in the past I'll repeat it 1 of the areas that we do need to add more to the single property owners. So we know that has merit.

In regards to your other question about how we're doing any share.

We spoke a little bit about that.

Barry remarks from what I've, just said now.

They want to fill up their properties. So we're there to make sure that they know we're there to help fill that and doing all the things that I mentioned before making sure that we can bring in that demand.

David anything you wanted to disclose for them, but is there any different I'm not sure if there's anything further debt.

No no no additional data points on the mix for $6.6 million why we're just clarify Mario is that the current that Glenn made about gaming.

Share gains with our larger professional managers are really related to how we're doing and you asked about the specific U S.

I'm not saying that's not the case, why but I'm, just saying that if you remember our strategy is to really get a lot of additional properties in the U S with the targets.

More of the perpetual module, whereas low.

Quality.

<unk> available through those marriage again single property owner.

These are available.

So the current we were making was there relative to what we're doing in the U S.

That's helpful. Thank you.

And your next question will come from Nevada, Kim from <unk> Securities. Your line is open.

Yes, Thanks, a lot a couple of questions I think.

David I think I heard you say marketing Gibson.

Was higher versus 2019 and income.

Michael from a bookings number it does not.

Isn't it goes higher in the last quarters can you just maybe talk about what other drivers of efficiency and marketing and then.

Maybe 1 for.

1 for Glenn.

Maybe.

Can you just talk about some reports definitely your flash sales being tested on the side, maybe Nathan this year and what kind of interest you my interest income hotels in terms of per station.

So David you want any debt first 1.

Yes, let me talk a little bit about Marc you what was going on I think I understood. The question.

But basically what you see was in Q.

Q2.

Our marketing expense the decline of our gross booking versus the way to look at it because if you look at your adjusted revenue for all different booking to say timing things in there to look at it is essentially our gross bookings.

That ratio improved in the second quarter, So said differently.

Marketing expenses declined more about gross bookings debt 2 boxes, we did see higher rois across.

Many of our pay.

Hey, Charles and we saw a couple of years ago, but we also saw a nice increase from mix towards direct as well. So the more we have dark makes analysis.

Thus with bank of marketing to attract new customers. So I'd say, nothing particularly unique to call out in that.

The market environment is still I would say is fully stable yet clearly, we're still going through a stage of recovery in the industry. So normal factors that they're comfortable with where we were with 2019, but we were pleased to see the ROI should improve now bear in mind, what I said about for Q3.

<unk>.

What happened in Q3, obviously, we're only a month into Q3, but we also have forgot our marketing spend in Q3. It is historically the core where we spend the most.

Peak season, we won't recapture demand.

The customers that are out there we will also be increasing our spend brand spend in Q3 relative to Q2s for that 1.

Contributors to essentially what will be from deleveraging marketing spend relative to gross bookings in Q3, So we'll see how the quarter develops but that's what we expect to happen in the third quarter and the first 2 quarters, we did see that that ROI, helping us create some leverage on the marketing line.

And regarding your question about flash deals if you read the same already from that I did I think there was something in there about there is no official response from booking so let me say that I have nothing to say specifically about this but let me reemphasize debt, we are putting a lot of effort into working cooperatively with our supply partners.

To get that incremental demand through all different ways being a better merchandise from providing more value to both sides of the marketplace is where we're going.

Understood. Thank you both.

And your next question will come from Deepak Matthew <unk> from Wolfe Research. Your line is now open.

Great.

Thanks, guys. Thanks for taking the question I wanted to ask a little bit about your experimentation with a more diversified marketing strategy historically performance marketing has been the 1 day.

And then the second question.

Kind of related to that but how should we think about your market share. During this time I know, it's still early and there's not a lot of data points yet but.

Any color that you can provide on how your market share is trending in some other markets where travelers is recovering that'd be great. Thank you.

So regarding <unk>.

Diversifying our marketing efforts you are absolutely correct. We built this company on doing a great great job with performance marketing channel. So we know that but what a lot of people don't know is that price Lane dotcom was very very successful in its early days in brand marketing and of course, we booking dot com regard for the U S. We have.

Lots of brand marketing the key thing in any type of marketing program is making sure that you are getting the ROI that you aren't yet and we are going to continue to do that as I mentioned in my prepared remarks about how we are looking at new channels like social channels.

I hope some other things that we've been putting out and we're going to continue to experiment.

All different ways to make sure we are reaching out for every pocket of demand, but we always do it with the knowledge that has got to be cost effective. It's got it produced in the long run because it takes longer for brand actually produce results. So we recognize that but in the long run. It for you Scott at Brazil produced the results that we want and we're going to keep on doing that and I believe I really.

I believe that in the long run we will have many different ways that we're going to be bringing in.

Marketing 1 of the key thing sales before you start spending a huge amount on our brand marketing campaign is making sure that you had the priorities where you want it and that's 1 of the things that were changed to do than perhaps the alternative accommodations area is really working to make sure in the U S. For example, so we've got that price the way we want.

The market shares.

Very pleased with how we are doing right now I haven't seen results from some of our competitors.

Really good go down country by country in terms of what our share so what I am pleased with the results that we're achieving and I'll, let David say, if he wants to give any specificity.

So Glenn I think you said it well.

We are pleased we'll have to wait and see when the dust settles I think market share is a better measure of of course of all of the year.

Quarter of 2 quarters, we're only 2 quarters into the year.

But we're pleased with things with how things are going.

Growth rates relative to what we see happening out there, but well count will count that as debt.

So for that if we kind of more at the end of the M. We got some more concrete data on how the market actually developed.

Okay. Thank you so much.

And your next question will come from the line of Justin Post from Bank of America. Your line is open.

Great a couple questions I guess first David can you revisit your comment about July traveler bookings being better than summer of 19, and what that means for revenues in the third quarter.

That's on that.

Maybe Glenn.

I think you said June was back to 13%.

Alright, well, David you want to take a true.

Yes, Scott with just to make sure that.

What we're saying so to re calibrate or restate, what we said.

We have more gross bookings.

For the summer for the remains.

<unk>.

The same time in 2019.

Thanks, Tom and July in 2019 than we had.

At that same time for Europe, and North America, So assuming that cancellation rates stay. The same then that would potentially result in more revenue in those markets for.

For the summer months for the remainder.

No I did notice.

It also pointed out that we will have debt.

We have a high percentage of cancel bookings out there.

Refundable bookings out there that we had at the same time in 2019 as well so there's obviously some risk.

More of those bookings council when they were done in the same period of time for it means basically debt.

Potential revenue base for the summer is higher now I know to market than it was in 2019 now obviously to offset that is what's happening in Europe, and Asia and what's happening in rest of world.

We don't have that situation.

Revenue for the bookings on the books, which will be potential revenue noted mark you saw substantially below where they were at the same time.

July in 2019.

Ken.

I would say that nobody knows when this full recovery is going to happen and I think everybody's able throw a dart viceroy throwing darts given all the variations that are happening. These new variance come out we've seen the impact there come from the thing that I continue to say as how much we are very comparable.

Everybody is debt. This will end at some point and we will come out strongly now we've talked about this a bit.

For the past about how we want to come out of this we want to have a bigger business, making more EBIT dollars.

Growing faster, but we've also talked a bit about margins, where we have a commitment we want to be a leader in English for the leader in the industry in terms of our margin.

Our EBITDA margin, but we recognize that a lot of things that we're doing nowadays can actually end up with a lower margin. Obviously air for example, I mean, it's wonderful when we say 120 per cent increase over 2019 and air tickets, that's wonderful, but we all know those margins are nowhere near what.

They are in the combination business and I can go on a different examples the key thing for us and for our shareholders. I believe is coming back with more EBIT dollars and continuing to grow that business. So there's more of that that's the way we're looking at it.

Great. Thank you.

Yeah.

And your next question will come from Doug Anmuth from JP, Michael Your line is open.

Hi, This is David.

For Doug Thanks for taking the questions 1 for Glenn is there for.

For clarity Mark you talked about better monetize the transaction flow in debt.

Just 1 other drivers.

2 the accretion of the spin.

Just curious what's the opportunity that you're seeing there if theres something that.

User experience as well or more focused there on the.

Okay, and then second 1 for David.

Blow up question.

The sales and marketing ROI, you're asking for.

Continental higher Rois thoughtful growth again this quarter, just so I am curious if discipline.

As a result for something that you are doing differently or is this just more on the outcome.

Due to the competitive dynamic on the performance advertising channels.

So in terms of the Fintech unit there are many opportunities for us with a slow in $2019.100 billion worth of transaction flow answer there. We know that there are ways that we can save money for the consumers and the suppliers both sides and we can make good money.

On it too in the long run so it was coming up for things like providing better FX tool.

For example, making sure that if somebody wants to pay in an alternative payment method that we're able to provide debt. It means making sure that we can do a better job with different types of regulations in terms of.

And making sure that any type of transaction is not fraudulent it's all sorts of things as a player in it.

Scale, we can do things that many many many other partners with our partners could not do it sounds from providing convenience to our customers who want it but our suppliers can't do it on their own and there are lots of different things that we can do even things as simple as our Fintech unit setting something up like our E wallet.

Electronic wallets and enables us to easily provide value to that customer, which can come from a supplier or it can be something that we're promoting ourselves all different things. So what I see is not only the basis that we need to make our connected trip work, which of course you have to have that if you want to credit.

Connected trip with a single price 0.1 person pays what amount, but it's all the other types of things that we can provide that others really can't do on their own right now.

Yes.

On the second quarter Rois, all playbook really has not changed in our strategy in the current marketing channel did not change we continue to see high quality traffic at the right price and to us high quality means higher converting traffic low lower probability cancellation with watch very carefully on a hypo growth coming back for us on a direct basis.

And those are things that kind of go into operating strategy plus all the dynamics that occurred in each of those marketplaces. So we expect there'll be ROI volatility throughout the recovery.

We also look at what the available demand is when there are times, Scott leading versus leaving more we are certainly looking at least have an opportunity to win.

<unk> customers onto our platform and get new customers and we mentioned a very healthy mix of new customers on.

And the business quite similar so it makes as it was in 2019. So we're pleased with how things are going and we like the way that we're bringing back existing customers. We like the way we are winning new customers. We are pleased to see the existing customers come back generally much more directly from the new customers, which you would expect.

Playbook so.

Many factors going for those are my calculations, including cost per click conversion rates cancellation rates.

Still in a period of relatively high volatility in each of those compared to where we were in 2019.

Got it thank you both.

And your next question will come from Brian <unk> from Morgan Stanley. Your line is open.

Hi, This is Alex Wang on for Brian. Thanks for taking the question 2 questions..1 I think you mentioned that.

To grow those bases.

Separately.

Second question around air It sounds like Theres a lot of momentum there I was just curious on your views on.

Some of the.

Remaining execution hurdles you see for for that initiative and any plans for sort of grow consumer awareness for the new air product.

So I'll take the Air Force and we'll see what David wants to say or not say about breakup of our customer base. So are obviously price signs has been doing it forever. So just companies started but in the U S only and booking dot com only got going this very very recently and I mentioned.

<unk> for countries nice, but that's a lot of countries that we havent touched yet that has to be done and there are certainly things that need to be done to really true air product at booking dot com.

I'm not going to list them, all but I see a lot of ways, we can make that even better than it is and thats a little bit why we havent done any real large marketing effort on.

On the air side yet.

Talk a little bit before us before you start really market. So it make sure you got the product the way you want it. So it is so encouraging that we're doing well with it right now even though I see a lot of things that still needs to be done to improve that product.

Nothing that we're really pleased with is seeing okay.

The attachment rate again, and something that we obviously obviously the reason that we wanted to do this is not just to show a slight tick edits to actually get from those higher margin with those combinations and build out that connected trip. So it's nice to see actually very early stage.

Average you listened carefully I think very early stage, we are seeing good results. So I do see a lot of opportunity here in the future, but we wont be bringing out and you sort of marching on it until I feel that we have the product where we wanted to day.

And David if you want to talk about the other 1.

A lot more to say I think we wanted to be health will give you some data points to understand how the active customers by other people actually are actually booking on the site.

Have recovered in the mix.

A healthy mix of new customers only slightly below what we saw in Q2.19 I think those are good signs so I don't want to get into the segmentation.

And our customers obviously, there are some customers who book very often some coastal for quite as much and we kind of lump them all but we will make sure we kind of true differently and I'd say, that's part of the reason why we have our genius program of course the more.

For the.

The more often you work with us or bookers and booking dot com are you move up the genius later and you get more benefits.

From a genius program, which I think a nice way of driving loyalty. So other than the data point for you given outflows, which we thought would just be helpful.

Sales in the grounds people understand what's going on within the business I don't want to get into any further details.

Okay. Thank you.

And your next question will come from Mark Mahaney from Evercore. Your line is open.

Hey, thanks.

I guess I'll just follow up on the keep sticking with the air and I guess learnings to date and.

Talk about this is is this a new customer acquisition tool. As this is just this is this was a cross sell product do you notice greater engagement.

With the with the people in those 24 markets, where you've rolled that out with booking.

Does this increase the overall spend frequency of purchase.

Have you seen so far and maybe it's all too early.

I guess, if youre going to respond that way then I'll ask when do you think youll have a decent read into what impact if any permanent if it has had a permanent impact on your booking dot com customer base. Thanks.

Hi, Mark.

So it's just what you said and say too early but I will add a little bit more than half of that a little more to that in a sense.

Very pleased because we haven't been out really marketing this yet new customers are coming to the site and then we're seeing them get.

Attractive.

Cross sell debt.

Really like seeing that as a sign that this is the right direction that we're doing it now.

Have a good sense that it was going to happen anyway, because we didn't seem to happen in price line for 2 decades, where thats been happening so good.

Good confidence that this would happen, but it's something that I believe we want to have a lot more debt.

Before we share coming back you'll start showing you here is what attach rates are heroes compares to price lines here for what we see it for industry and how many new people are coming from the air funnel versus the other I would just leave everyone with a sense that we're very pleased this is bringing us new customers new customers, who are buying not just flight tickets for some of them are buying hotels too.

This is proving out a little bit of our long term vision on this connected trip now do I expect that to happen with something like a <unk>.

<unk> no I am not really I think a lot of people are going to come for an activity first and then they're going to buy a flight or then they're going to buy a hotel that's going to be a lot more the other way and helping produce the loyalty and the repeat business that we talked about and then goes into the all of the things I was talking about in terms of using a wallet. So we can give credits now different suppliers being able to promote different offerings.

Current ways to different customers all of that spins together, increasing that flywheel and that's what we're trying to achieve and it is just so great to see it start happening right now even though it's very early.

Okay. Thanks, Glenn.

And your next question will come from Vince Seatbelt from Cleveland Research. Your line is open.

Active on the long term trend line within leisure and how Covid has changed that maybe people's ability to work remote.

You mentioned more leisure business shifting online with debt Mckinsey study, but.

Just curious how you think about leisure over the long run and then the second part is on the corporate side any early indications of recovery there and how you think that evolves through the second half of this year.

Yes, let me give generalities about what I think about leisure versus business in Corpus General what I think is going to be happening in the future. David go back and talk about what we've disclosed in the past about the mix. So thank you.

Right in the sense that we are much more leisure oriented and much of our business travel is small business people. These are people who are doing their own travel. This is not part of the big travel management company operations. So it's a little bit differently, when we have business travelers.

Ex somewhat similar to leisure sometimes in.

In fact, as we've all seen this debt leisure is out of the out of the gate much faster than any business trial, which makes perfect sense because on 1 hand.

Business people will say there is a risk factor when you put people in travel et cetera, and there's also the issue of course why have people trials. If you don't have to that second part I think is very key for the future of the business I believe that theres still going to be resistance by CFO and other people who are cost conscious and their business is about Gee do we really have to have all the trials that we did in the.

Past, maybe not because with these new technologies, so we seem to be pretty effective without having to send somebody from New York to London at $15000 for 1 day meeting.

And I think thats going to somewhat change.

The business travel it's done yes, there'll be fewer people upfront of the plane and spending a lot of mining those very high cost 5 star hotels, et cetera, which will change things for a little bit for us where leisure. So it's not going to impact us negatively so much in fact, it may help us because there's more availability that needs to get filled up.

The other thing you mentioned, which means you see how it plays out though with more people being able to work from home inside A&P, I think Friday, I'm going to walk from somewhere else and have a Friday Saturday Sunday for a Thursday Friday Saturday Sunday.

Many holiday somewhere working Thursday, Friday, but in a different location how much is that going to actually build more travel uncertainty. This time since everybody is still shifting around what's the way to work in the future how many days for our offices. How many days are we not in all of this nobody knows the answer to that yet and its going to take a long time to play out but I do.

Hope that we'll hopefully build out more travel we'd like more travel. So there's a lot of uncertainty about this and nobody really knows and even as much as I've heard the encouraging signs from some of the suppliers, particularly from the airlines I saw a Deloitte report came out a couple of days Scott maybe yesterday.

The expectation of corporate travel was not as optimistic in the near term. So I think we'd have to say, we don't know, we'll find out as it rolls out and David I know if you want to give anything more to that interest from our numbers for some business travel correct I heard a note for he quoted im not sure those right or not.

No. The number first of all we haven't given a recently but.

Over 80%.

Leisure.

As we said.

First of all it's a self declared metric when you make a booking so it's hard for it.

To be precise about it but the type of.

Business travel, we do have as much more organized business travel as Glenn explained so we're heavily biased towards the larger segments.

Thank you.

And our last question will come from Jed Kelly from Oppenheimer. Your line is open.

Great. Thanks for taking my question 2 if I may just as you sort of you mentioned earlier in your prepared remarks, how you are gaining share with.

Professional property managers can you sort of talk about like your supply strategy heading into this.

This winter in the U S trying to increase that single unit inventory and then can you give us an update just on how APAC is treading trending, particularly with <unk>. Thank you.

I'll, let David talk for you I'll.

Say about Asia in general and regarding the share I just would be a little careful we said we're pleased with that we are doing better we're gaining.

We're gaining share with the professional managers and I like what we're seeing there is going to be a long haul in terms of building out the U S inventory for all types of alternative accommodations, whether it be professional managed and getting as many as we walk there for single property, it's going to be a while to get to where we want to be in that I just want everybody to understand.

This is a goal that we're working on hard by having boots on the ground talking where managers sending out the right information getting people to understand why we have a great proposition for them and I'm confident we're going to do that when you look from what we've achieved in Europe, you look at the share of our alternate combinations in Europe, you say boy that's the goal to have in the U.

2 we should be pushing for that Theres. No reason, we should now customers are similar the proposition of similar there's nothing that we shouldnt be no reason, we shouldnt be able to achieve that over time, but it's going to take time.

David I know, if you were talking about Asia, a little bit there.

Yes, So Asia.

APAC I mentioned that the room night growth was worse in Q2 net wells in Q1, so that deteriorated counteract some of the benefits and the strength, we saw in Europe and North America.

Booking and Dakota sizable businesses in.

In APAC, although clearly that was the majority of our goes so the whole region Barry.

As you know vaccination rates are lagging in most parts of Asia also response to Covid outbreaks tends to be more aggressive.

And restrictions are put in place more quickly.

Based upon outbreaks in the Asia region across almost all countries. So.

So travel levels very low, particularly in international travel levels exceptionally low.

Still a long way to go no recovery in Q2, it got worse from Q2 versus Q1.

Thank you.

And that concludes our Q&A I will turn the call over to back to Glenn Fogel for closing remarks.

Thank you.

In closing I want to reiterate our strong belief in.

For our industry is full recovery will be decent.

Everyone, who can get a vaccine going out and getting it.

We urge all people who are approved for medically able to be vaccinated to do their part to make our society safer and go out and get a vaccine.

And as always I want to thank our partners our customers dedicated employees and our shareholders. We appreciate your support as we continue to build on our long term vision for our company.

Thank you and please be safe Goodnight.

And that concludes our conference call. Thank you for participating you may now disconnect.

Q2 2021 Booking Holdings Inc Earnings Call

Request a DemoDemo

BKNG

Booking Holdings

Earnings