Q3 2024 Expedia Group Inc Earnings Call
Thanks for watching!
Alex: Good day everyone, and welcome to the Expedia Group Q3 2024 Financial Results Teleconference. My name is Alex, and I'll be the operator for today's call. If you wish to ask a question at the end of the presentation, please press star-flipped by 1 on your telephone keypad. If you change your mind, please press star-flipped by 2 to cancel your request.
Speaker Change: For opening remarks I will turn the call over to SVP Corporate Development Strategy and Investigations, Harshit Vaish. Please go ahead.
Speaker Change: Good afternoon and welcome to Expedia Group's third quarter 2024 earnings call. I am pleased to be joined on today's call by our CEO Ariane Gorin and our CFO Julie Whalen. As a reminder, our commentary today will include references to certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in our earnings release.
Speaker Change: And unless otherwise stated, any reference to expenses excludes stock-based compensation.
Speaker Change: We will also be making forward-looking statements during the call, which are predictions, projections, or other statements about future events.
Speaker Change: These statements are based on current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict. Actual results could materially differ due to factors discussed during this call, and in our most recent forms 10-K, 10-Q, and other filings with the SEC.
Speaker Change: Except as required by law, we do not undertake any responsibility to update these forward-looking statements. Our earnings release, SEC filings, and the replay of today's call can be found on our investor relations website at ir.xpediagroup.com. And with that, let me turn the call over to Ariane.
Ariane Gorin: Thanks, Harshit, and thank you all for joining us today. Our third quarter results reflect strong execution across our company.
Ariane Gorin: We exceeded our expectations on gross bookings and earnings with revenue landing in line despite weather and currency headwinds.
Ariane Gorin: We accelerated gross bookings in our consumer business for the second straight quarter, driven by continued strength in Brand Expedia, Vrbo returning to growth, and good results in our international points of sale.
Ariane Gorin: Our advertising and B2B businesses continue to outpace the industry, both delivering strong double-digit growth.
Ariane Gorin: We remain disciplined on costs, with costs of sales and overheads both declining year-over-year.
Ariane Gorin: Overall, we're pleased with the results of our work. We're executing in what's under in our control and capitalizing on growth opportunities to rebuild momentum after our tech re-platforming.
Ariane Gorin: The travel environment in the third quarter was healthy but mixed, with demand softer in July and then improving into August and September.
Ariane Gorin: International demand was stronger than the U.S. and compared to last year, booked room nights grew in the low single digits in the U.S., low double digits in Europe, and high teams in the rest of the world.
Ariane Gorin: Like last quarter, prices held up for both hotel and vacation rentals.
Ariane Gorin: For air and car, we saw continued pricing pressure, though air ticket prices grew in September for the first time this year.
Ariane Gorin: Turning to our consumer business, we remain focused on the fundamentals, driving more direct traffic, improving product performance, enhancing our supply, and expanding internationally.
Ariane Gorin: Gross bookings were up 3% year-on-year, which was a two-point acceleration compared to the second quarter.
Ariane Gorin: Global app downloads for our core brands was up nearly 10% year-on-year, led by EMEA at 20% growth, and the percent of bookings coming from our apps improved by three points.
Ariane Gorin: Our package product that allows travelers to dynamically bundle a huge selection of flights, hotels, and cars, all with attractive package savings, is a real differentiator for Brand Expedia.
Ariane Gorin: Last quarter, we released new features like the ability to book accommodations for only part of the trip and package searches for one-way flights.
Ariane Gorin: These make planning and booking multi-item trips even easier, and combined with our targeted promotional activity, drove a 25% increase in package bookings in the third quarter.
Ariane Gorin: Shifting to Vrbo now, we delivered our first full quarter of bookings growth this year.
Ariane Gorin: We're meaningfully improving Vrbo app performance, making the app faster and adding new features to streamline shopping.
Ariane Gorin: App traffic growth has accelerated, and more visitors are signing in.
Ariane Gorin: We've also further strengthened Vrbo's supply. We added nearly 1 million units that had previously only been available on Brand Expedia.
Ariane Gorin: These units skew more to urban areas and shorter stays, which allows Vrbo to appeal to a wider audience.
Ariane Gorin: And beyond the additional supply, we improve the quality of our existing supply with more discounts for long stays and more flexible cancellation policies.
Ariane Gorin: Looking to the fourth quarter, while October's been tougher for Vrbo due to Hurricane Milton, we believe that our focus on the basics, traffic, our product, and our supply, will continue to drive positive momentum for Vrbo.
Ariane Gorin: In the last few quarters, we've moved back into faster-growing international markets, investing surgically, and are seeing promising results.
Ariane Gorin: Bookings growth for our consumer brands outside the U.S. accelerated by five points in the third quarter.
Ariane Gorin: One particular highlight was healthy double-digit growth for Hotels.com in Scandinavia, where we already have high brand awareness.
Ariane Gorin: We believe we have a big opportunity ahead to grow internationally and to win share.
Ariane Gorin: Our advertising business delivered yet another strong quarter with revenue up 32% as we've continued to add more advertisers and evolve our products.
Ariane Gorin: We simplified our sign-up process and are testing new product capabilities like video ads and search results, which are driving a nearly 30% increase in engagement.
Ariane Gorin: All of this means we're delivering more value and better returns for our advertisers.
Ariane Gorin: In terms of our loyalty program, global active membership grew 7% year-over-year in Q3, and our 12-month member repeat rate was up 150 basis points compared to last year.
Ariane Gorin: On our three core brands, nearly half of our room nights came from silver, gold, or platinum members. And as a reminder, these higher tier members get further member discounts funded by our supply partners.
Ariane Gorin: We've also enhanced the One Key Value proposition in the U.S. and U.K.
Ariane Gorin: This quarter, we introduced member-only discounts for the first time ever on Vrbo, and have seen great early results. And on Brand Expedia, we just expanded redemption options to include more airlines.
Ariane Gorin: We're continuing to fine-tune the loyalty value proposition for each brand and each market while capitalizing on the capabilities of our underlying tech platform.
Ariane Gorin: Turning to B2B, we had another strong quarter, with bookings up 19% year-on-year, slowing only one point from the second quarter.
Ariane Gorin: Growth was broad-based and came from all partner segments and regions.
Ariane Gorin: We also secured important wins like long-term renewals with Despegar and Travaloca and a new partnership with Canadian bank CIBC.
Ariane Gorin: Just last week, we announced a new partnership with Microsoft Bing.
So overall, we continue to extend our leadership in B2B.
Ariane Gorin: Let me now spend a minute on a few highlights of how our tech platform and AI capabilities are contributing to better conversion and enhanced customer service.
Ariane Gorin: On conversion, some of the most compelling use cases so far have been property question and answer, smart and natural language filters, and review summaries.
Ariane Gorin: Over 70% of travelers read reviews before making a booking and we use generative AI to efficiently summarize reviews and provide detailed property and neighborhood information.
Ariane Gorin: This makes it easier for travelers to shop while taking less of our development time and resources.
Ariane Gorin: In customer service, we're continuing to leverage AI to allow travelers to self-serve, which both lowers costs and improves the traveler experience.
Ariane Gorin: For instance, our virtual agents now handle nearly half of all traveler inquiries through self-service.
Ariane Gorin: Additionally, our agent co-pilot feature, which summarizes voice and chat interactions, significantly reduces after-call work for our call center agent.
Ariane Gorin: Before closing, I want to share a couple of leadership updates.
Ariane Gorin: We announce today that Julie will be stepping down as CFO and is a member of our Board of Directors.
Ariane Gorin: We expect to announce a successor prior to Julie's departure to allow for a smooth transition.
Ariane Gorin: I want to thank Julie for all she's done for Expedia Group as a board member and as our CFO over the last five years. We're deeply grateful for all of her contributions and appreciate her partnership during this transition.
Ariane Gorin: We also announced last month that Ramanathumu is joining us as our Chief Technology Officer.
Ariane Gorin: Raman is a great leader and technologist and he's led tech teams for over two decades. More recently, he built and scaled the multi-brand platform at Fanatics, so his experience is directly relevant to our growth aspirations here at Expedia Group.
Ariane Gorin: In closing, we're pleased with our third-quarter performance and the progress we're making. We continue to see healthy travel demand and are confident in our ability to execute, which has led us to raise our full-year guidance, and Julie will talk about that in a minute.
Speaker Change: I'd like to thank our team for their hard work and the successful delivery of our third quarter. With that, let me hand it over to Julie.
Thank you, Ariane, and good afternoon, everyone.
Julie Whalen: We are pleased with our third quarter results. Despite some headwinds during the quarter, including unfavorable macro trends, weather events, and FX, we were able to deliver year-over-year room-night growth of 9%, gross bookings growth of 7%, an acceleration of over 150 basis points versus the second quarter.
Julie Whalen: But before I jump into more of the financial details for the third quarter, I just wanted to say thank you to Ariane, the board, and the management team here at Expedia. I'm proud to have been associated with Expedia Group as a board member since 2019 and more recently as CFO.
Julie Whalen: I am committed to supporting the company until and after my successor is in place to ensure a smooth transition. I am confident in this management team and our strategy, and I remain excited about the opportunities ahead for Expedia Group.
Julie Whalen: Now, back to the financial details for the third quarter. Total gross bookings of $27.5 billion grew 7% versus last year, driven by lodging gross bookings, which grew 8%, and includes our hotel business growing 10%.
Julie Whalen: We were happy to see that we have once again held or grown hotel gross bookings share in virtually all of our key markets.
Julie Whalen: Booking windows for hotels expanded in August and September when compared to last year, which provided a tailwind to our third quarter gross bookings.
Julie Whalen: Outside of our hotel business, we also saw a strong recovery in our air business driven by growth in multi-item packages and improvement in air prices. And we also saw a continued acceleration at Vrbo, which returned to modest growth on the quarter.
Julie Whalen: In addition to FX, revenue growth was also impacted from pricing actions in prior quarters, which is a reminder translate to contra revenue at the time of this day.
Julie Whalen: Third quarter revenue also saw pressure from soft Vrbo bookings in the first half of 2024, translating to stays in the third quarter. As a reminder, Vrbo has a longer booking window versus our hotel business, and the third quarter is the largest revenue quarter for Vrbo, driven by summer stays.
Julie Whalen: Total revenue margin was approximately 50 basis points lower year-over-year. The uplift from advertising growth was offset by all the previously mentioned impacts to revenue, as well as the outperformance in air bookings, which is a lower margin business.
Julie Whalen: Cost of sales was $385 million for the quarter and $24 million or 6% lower versus last year, which combined with higher revenue growth drove approximately 90 basis points of leverage as a percentage of revenue year-over-year. We continue to see our ongoing initiatives deliver transactional efficiencies.
Julie Whalen: Direct sales and marketing expense in the third quarter was $1.9 billion, which was up 11% versus last year. Sales and marketing deleveraged as a percentage of gross bookings primarily due to higher commissions to our partners from the strong growth in our B2B business.
Julie Whalen: As we have stated previously, commissions paid to our B2B partners are in our direct sales and marketing line and are more expensive as a percentage of revenue than our B2C business. However, because they are generally paid on a state basis to contractually agreed upon percentages, the returns are more guaranteed and immediate.
Julie Whalen: We also saw some deleverage in our B2C business as we reinvested back into Vrbo and our international markets to drive improving growth and global market expansion.
Julie Whalen: Excluding these investments, we saw marketing leverage in our B2C business.
Julie Whalen: Overhead expenses were $602 million, a decrease of $15 million versus last year or 3%.
Julie Whalen: This resulted in approximately 90 basis points of leverage, primarily driven by lower people costs and product and tech from our actions to rationalize our headcount, as well as overall strong expense control.
Julie Whalen: We remain committed to driving efficiencies across our P&L, and we're pleased to see another quarter of reduced costs and strong overhead leverage.
Julie Whalen: On the bottom line, we delivered 3rd quarter EBITDA of $1.25 billion, which was up 3% year-over-year, with an EBITDA margin of 30.8%, slightly deleveraging approximately 16 basis points year-over-year. This was better than expected due to our effective expense management.
Julie Whalen: As far as our EBIT performance, which includes the impact of stock-based compensation, depreciation, and amortization, we delivered $892 million of EBIT with a margin of 22 percent, deleveraging approximately 100 basis points year-over-year in the third quarter.
Julie Whalen: This quarter's results included the accelerated vesting of our former vice-chairman's RSUs, which drove a one-time $51 million increase in stock-based compensation.
Julie Whalen: Excluding this acceleration EBIT would have leveraged approximately 27 basis points year-over-year this quarter.
Julie Whalen: Our year-to-date free cash flow remained robust at $2.3 billion, up 3% year-over-year, driven primarily by higher EBITDA and lower capital expenditures.
Julie Whalen: Moving on to our balance sheet, we ended the quarter with strong liquidity of $7.2 billion, driven by our unrestricted cash balance of $4.7 billion and our undrawn revolving line of credit of $2.5 billion.
Julie Whalen: Our debt level remains at approximately $6.3 billion, with an average cost of 3.7%.
Julie Whalen: Our gross leverage ratio at a further reduced 2.2x continues to make progress towards our target gross leverage ratio of 2x, driven by our ongoing strong EBITDA growth.
Julie Whalen: In addition, our strong cash position enabled us to repurchase 1.6 billion or 12 million shares year-to-date.
Julie Whalen: We continue to believe that our stock remains undervalued and does not reflect our expected long-term performance of the business. As such, we expect to utilize the strong cash-generating power of our business to continue to buy back our stock opportunistically.
Julie Whalen: And we have approximately $3.2 billion remaining on our share repurchase authorization.
Julie Whalen: As a result, we expect revenue growth to be about one point lower than our gross bookings growth. And we expect EBITDA and EBIT margins to be relatively in line with last year, as we will continue to lean into our marketing investments in Vrbo and international markets.
Julie Whalen: Moving now to Full Year 2024 Outlook. Based on our strong third quarter results and our improved fourth quarter outlook, we are raising our full year guidance.
Julie Whalen: We now expect gross bookings growth to be approximately 5% versus last year, up one point relative to our prior outlook. And we now expect our EBITDA and EBIT margins to be slightly up versus last year, an improvement from our prior outlook of flat levels.
Julie Whalen: Before I open the call for questions, I also want to extend a big thank you to our Expedia associates and partners for their ongoing dedication and support, which has enabled us to deliver these third-quarter results and gives us the confidence to be able to deliver our full-year results and beyond.
Julie Whalen: And with that, let me open the call up for questions.
Thank you for watching!
https://www.patreon.com
Speaker Change: Thank you. As a reminder, if you'd like to ask a question, please press star followed by 1 on your telephone keypad. If you'd like to retract your question, please press star followed by 2.
Thank you for watching!
Speaker Change: Our first question for today comes from Lee Horowitz of Deutsche Bank. The line is now open, please go ahead.
Speaker Change: Great. Thanks for the question, and Julie, a pleasure working with you. Maybe on marketing investments at Vrbo and HCOM and international markets, I guess, how should we think about your ability to maybe deliver aggregate marketing leverage on a go-forward? We know this year is a big investment year for those brands, but presumably they're not back to the level that you'd expect and you'll remain invested. Do you need these businesses to get back to market-level rates before you can perhaps deliver marketing leverage for the whole business? Thanks so much.
Speaker Change: Yeah, from a marketing leverage perspective, I mean, obviously, as we said, B2B sales and commissions are in that line. So that does put pressure given their level of growth on that line. But if you speak just to B2C business,
Speaker Change: X those investments in Vrbo and international markets, we have seen leverage. So essentially, as we get those businesses back to where we need to get them, we expect to see that we'll be able to see some leverage going forward.
Speaker Change: Great, thanks. And then, Ariane, you know, you're seeing really strong growth out of your media solutions with an acceleration this quarter against that.
Speaker Change: and Trevor Combs. Maybe if you could just unpack what the driver is there. Is it pricing? Is it the expansion of the media network? Any understanding of what's driving that? And then maybe just framing up the opportunity of how large you see that business over time. What's the big opportunity? Where is the clear white space?
Speaker Change: So on the growth, you know, we have a sponsored listing business and the display business.
On both of them, we've got a lot more partners.
that are participating, especially in sponsored listings.
Speaker Change: And as I mentioned in the prepared remarks, we've done quite a bit of work on making the sign-up process easier, doing sort of marketing activities to bring more partners into the auction. At the same time, as I mentioned, we're testing new things like video ads and the like such that those ads are even more effective, which then translates to pricing.
Speaker Change: So I think there continues to be big opportunity on sponsored listening and on display.
Speaker Change: And if you look at the advertising as a percentage of our overall revenue and compare to some other big retail companies, you can see that we've got quite a bit of white space in order to grow that in the years to come.
Thanks so much.
Thank you for watching!
Speaker Change: Thank you. Our next question comes from Deepak Madhavanan of Canter Fitzgerald. Your line is now open, please go ahead.
Speaker Change: Great, thanks for taking the question. Maybe I'll start with Vrbo. Now that the business has kind of returned to moderate growth,
Speaker Change: What is required to accelerate further and get the growth rate on par with, you know, the results that we're seeing from some of the alternative accommodations providers in there? And then second question, maybe for Ariane, you know, I'm not sure if you're ready to comment about 2025, but maybe you can qualitatively discuss how we should think about kind of the...
Speaker Change: cost side that's required to grow the business further and maybe the implications on margins for 2025. Thank you so much.
Thank you for watching!
Okay, we'll also, so on the Vrbo question,
Speaker Change: As we all know, Vrbo went through a migration at the end of last year, and that's why it had such a slow start to this year.
Speaker Change: And I would say the teams have been doing great work this year in adding black product features, you know, making the app faster, as I sort of described in my prepared remarks, doing work on supply.
Speaker Change: I would also call out, we had this great marketing campaign with Nick Saban in the last couple months, perhaps people saw it, it was a great performing campaign and drove a lot of conversion.
As you think about Vrbo going forward,
Speaker Change: We need to continue that formula of continuing to improve the product.
continue to expand the supply and having great marketing.
And as I mentioned, we've got some new supply that's
Speaker Change: in more urban destinations. I would say that we're underpenetrated in the markets that we're in internationally. So we have a new general manager who's in, who's running Vrbo. We're looking at what are the longer-term growth plans. So I'm confident that the basic formula we have right now, layered on top of it where the market opportunity is, will be what will drive growth.
And I just add one other thing, which is
Speaker Change: All the work that we're doing to sell vacation rentals well on Vrbo.
Speaker Change: will also help us sell vacation rentals on Expedia. We've had so much going on the last few years as a company that we haven't made a big concerted effort to sell vacation rentals well on brand Expedia. And again, all the work on Vrbo, on servicing, on communications, and the like will then help us as we turn to that for brand Expedia.
Speaker Change: And then as far as 2025, yeah, we're not going to be providing any commentary in this call for that. We'll plan to give more updates on that for next call. But I would just say generally that, you know, we are very focused on both the top and the bottom line.
Speaker Change: And as you can see, we've done, you know, made incredible progress with getting costs out of, you know, cost of sales and overhead.
Speaker Change: And we're going to continue with that as we move forward in the next year. Obviously, you know, top line revenue growth is a play on what will happen on the bottom line. But I think the biggest line, clearly, as everyone knows, is the marketing line. And so as we get these businesses, you know, back up to where they need to be, as the product starts to get optimized more and more, we should be able to drive more repeat and direct behavior, and therefore drive more marketing efficiencies, as we've been seeing in Brand Expedia.
Thank you for watching!
Great. Thank you so much.
Speaker Change: Thank you. Our next question comes from Trevor Young of Barclays. Your line is now open, please go ahead.
Speaker Change: Great, thanks. First one just back to Vrbo. On the modest growth in the quarter, can you just speak to the actual cadence throughout the quarter? It wasn't clear last go-around whether July was still positive relative to the positive.
Speaker Change: These were all March and June exit rate, and then similarly for October, I think you would tapped out some of the increment weather issues. Was Vrbo still positive here at the start of 4-Q.
Speaker Change: Yeah, we're not going to give out sort of the monthly comps, if you will. But I think what the great thing is that we're seeing is that business is continuing to accelerate. So, I mean, as we move to the quarter, we definitely saw that business accelerate. I would say that, you know, certainly when you are impacted by hurricanes and things, it creates some, you know, bumpiness in the results. But, you know, out of coming out of July, we saw incredible acceleration from that point forward.
Thank you for watching!
Speaker Change: That's helpful. And Ariane, maybe one bigger picture one for you. You're now roughly six months into this new role. Can you highlight, you know, two or three things that have been positive surprises to you and maybe a few things that stood out as maybe more challenging than you had anticipated when you first got into the seat?
Thank you. Thank you. Thank you.
Ariane Gorin: Yeah, I think, look, I obviously knew the B2B, the private label business, and the advertising business, and the supply part of the company quite well, because I've been running those for a period of time. The consumer business, while I've been in the management team, and I knew it well, that's the part that I've gotten much closer to in the last six months.
Ariane Gorin: On the positive is just how much passion and, I would say, awareness and love there is for our three big brands, Expedia, Hotels.com, and Vrbo. So that's sort of the positive surprise, is just how much, just how much sort of love there is there.
Ariane Gorin: On the sort of what's been tougher is, you know, I think I appreciated all of the technology work that we've done on our platform, and it is really enabling us to innovate faster, to have one customer identity and the like.
but connecting that directly into the brand value propositions.
We had done that quite well on Expedia.
Ariane Gorin: And I'm now appreciating just the work that we needed to do to get that into hotel.com and Vrbo. And again,
Ariane Gorin: What's been wonderful to see is how quickly the organization and the brands are responding to that. And that's, you know, when I look at the acceleration we've had in the consumer business.
Ariane Gorin: from Q1 to Q2 to Q3, it's seeing those daily improvements in the way that we're connecting in our brands themselves, what the value proposition is, what the marketing is, and what the product and platform can do that gives me real confidence in the future.
Great. Thank you both.
Thank you.
Speaker Change: Thank you. Our next question comes from Connor Cunningham of Mellius Research. Your line is now open, please go ahead.
Speaker Change: Hi everyone, thank you. I'm going to move to add a million rooms from expedient of our votes.
Speaker Change: Just curious on what drove that outcome. And as you think about additional supply going forward for Vrbo, is the urban market something that you're focusing on a little bit more than before? And is there any difference in returns from that move? Thank you.
Speaker Change: Thanks for the question. So we took the about million units that had been listed on Expedia and we moved them over to Vrbo. And these are, this is inventory that's a little bit different from the other inventory that we had on Vrbo, so we've needed to figure out, you know, what's the right UX and design, what's the pattern for people shopping and discovering on them.
Speaker Change: But as I said in the prepared remarks, we've actually seen that that's allowed us.
Speaker Change: to go after a part of the market that's more urban, that's shorter stay than we've been in before.
Speaker Change: And it's true that historically, Vrbo has been a brand that has tended to be sort of beach and mountain and the like. And we think there's still opportunities for us to grow there. And we'll also be looking at where else can we grow.
Speaker Change: In terms of, you know, are there different returns? Again, it's early days for us in exploring that part of the inventory. But, you know, ultimately what we want to do is make sure that people know the Vrbo brand. They understand that when they come to Vrbo, they're going to have whole homes and apartments. They won't have shared spaces. They'll get to, you know, redeem their one-key cash.
Speaker Change: and they'll have a full supply of whatever it is that they're looking for that we can fulfill for them.
Speaker Change: Brand Expedia is multi line of business. So air car hotel activities cruise is all of that and so we have a long history of being able to attach whether it's attaching when you start with one product and add another for doing the actual dynamic packaging at the same time.
Speaker Change: So I would say that that's always been at the core of the strategy for Expedia I highlighted the growth in our dynamic package travel, but also the multi item attach is something we.
Speaker Change: Continue to work on it certainly.
Speaker Change: Improved overtime not only in the UX and the design, but also in the recommendations so being able to personalize. What's the next best thing to recommend to a traveler by category and also by item.
Speaker Change: I guess I would just conclude by saying it is important to us it's a core part of brand Expedia.
Speaker Change: I appreciate it thank you.
Speaker Change: Thanks.
Speaker Change: Thank you. Our next question comes from of B.
Speaker Change: Riley Your line is now open. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Great. Thank you very much so yes.
Speaker Change: You shared with US about 150 basis point improvement in the <unk>.
Speaker Change: And our repeat rates.
Speaker Change: <unk> users, how does that compare versus your own sort of expectations.
Speaker Change: You sort of launched this program last year and what are the things that you control.
Speaker Change: Drive further improvement from these levels. So that's that's one question. The other one I had is on <unk> maybe just.
Speaker Change: Really strong growth does give us a sense of where the pipeline and it looks like that.
It can continue to drive this strong traction.
Speaker Change: Yeah.
Speaker Change: I'd say on one key right. It's been we launched it in the summer of 'twenty three.
Speaker Change: So we've been pleased with the results so far I shared some of the stats in my prepared remarks I'd.
I'd say, we're especially pleased with our tiered member deals so the silver gold and platinum members, they're available everywhere, but we're seeing that that's about 30% of our travelers that 50% of our room nights.
Speaker Change: We also when we launched <unk>, we're looking for cross sell across our brands and as I shared last quarter, 30% of travelers who are redeeming their one key cash on Volvo after earning it on the other brands are actually net new to Volvo. So that's great that were seeing and finally I'd say the one.
Speaker Change: Key technology is giving us capabilities that we didn't have before so things like gifting one key cash that has an expiry date.
Speaker Change: Which allows us to be more promotional in order to sort of drive purchases in a.
Speaker Change: Window.
Speaker Change: At the same time that theres been a lot of positives, we're continuing to work to tune the value proposition by brand and by geography. So for example, I said on <unk>, we know that <unk> is driving new travelers, but we're still assessing the impact of verbal earn on travelers shopping decisions everyday.
Speaker Change: So the one key program, obviously as Julie talked through it it's in our Contra revenue and we're interrogating the spend on loyalty in the same way that we do our marketing spend and the like and making sure that we're able to tune the program and the good news is the way. The technology is built allows us to configure it.
Speaker Change: So that's what I would say for one key.
Speaker Change: On the question about <unk> as you said, we had another strong quarter at 19% growth only a point down from last quarter.
Speaker Change: And.
Speaker Change: The <unk> business has a massive market.
Speaker Change: We can work with corporate travel agencies offline travel agencies online travel agencies.
Financial institutions that have their own loyalty programs.
Speaker Change: So it's true the last set of quarters, it's grown at a very elevated rate some of that was Asia.
Speaker Change: Really coming back.
Speaker Change: We believe in this business, we believe it will continue to be healthy double digit rates, even if perhaps not at the elevated levels that we've seen.
Logan: Thanks Logan.
Logan: Thanks.
Logan: Thank you.
Speaker Change: Our next question comes from Mark Mahaney of Evercore ISI.
Speaker Change: Your line is now open. Please go ahead.
Speaker Change: Thank you. This is Austin Riddick actually speaking for Mark Mahaney Congrats on the quarter, we would just love to hear your thoughts on the use of alternative accommodations market, particularly as it relates to the recent regulatory updates.
Speaker Change: Coming out of California, Hawaii et cetera.
Speaker Change: Do you think these are basically one off situations or the start of a broader trend. Thank you.
So I would just say all up but we work with.
Speaker Change: With local government to make sure that obviously, we are we're abreast of the regulations, where we're taking those into consideration I think there's always a balance between the contribution to the local economy and following the regularly and the regulations, but.
We believe there is a big market out there for alternative accommodations, just like there is for hotels and the like.
Speaker Change: And that's not impacting our view of our growth potential.
Speaker Change: Thank you.
Speaker Change: Thanks Keith.
Speaker Change: Our next question comes from Jed Kelly of Oppenheimer Your.
Speaker Change: Your line is now open. Please go ahead.
Speaker Change: Oh, great. Thanks for taking my questions you mentioned integrating verbal would be.
Speaker Change: Brand Expedia can you talk about the opportunity to integrate verbal.
Logan: Thank you.
Speaker Change: Our next question comes from Kevin Kopelman of TD Securities.
Speaker Change: It sounds open. Please go ahead.
Speaker Change: Okay.
Speaker Change: Hi, This is Jacob in for Kevin You mentioned, the Hurricane impact in October, but can you talk more about quarter to quarter to date trends and what youre seeing across your consumer brands and maybe you could color on your efforts to regain share in international markets. Thank you.
Speaker Change: Yeah.
Speaker Change: Yes, we definitely saw an impact in October from Hurricane Milton.
Speaker Change: But I would say that it's.
Speaker Change: It's and it's material, but not anything that we thought it would be originally so it came it came in better than our expectations.
Speaker Change: The reality is that if you take things out out of the picture for things like the hurricane for the election et cetera, we are actually seeing the underlying health of the business being really strong. So we're excited to see that as we've entered into the fourth quarter.
Speaker Change: And then on international.
Speaker Change: As we said last quarter.
Speaker Change: We're being surgical we're looking market by market understanding which of our brands has brand strength, there and then going in with a full funnel market plan and marketing plan.
Speaker Change: In order to start to regain share, but we're being quite surgical about it.
Speaker Change: Great. Thanks.
Speaker Change: Thanks.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from Anthony Post of Bank of America.
Speaker Change: Your line is now open. Please go ahead.
Anthony Post: Great. Thank you I apologize. If this has been asked already but wanted to get into selling and marketing I know <unk> is a big contributor there, but when you back that out how do you think about your efficiencies versus competitors and are there costs that you think you can take out of their own over the long term. Thank you.
Speaker Change: Yes, I mean, I would say that that is an opportunity for us to I think <unk> said in the past that we want to interrogate every line.
Speaker Change: And so it is something that we're looking at and we are delivering efficiencies I think obviously as we've said we've been investing at the same time back into <unk> in international markets and if you exclude that.
Speaker Change: Investment, we are actually seeing efficiencies, particularly in brand Expedia and so this is more about us sort of getting the flywheel back on these other businesses getting back to where they need to be and we think we have an incredible opportunity to be able to deliver more efficiencies when that happens at the same time, we need to be optimizing the product the supply.
Speaker Change: And putting all of that together for these businesses to be able to deliver.
Speaker Change: Value to the traveler that encourage them to return to our sites.
Speaker Change: As repeat behavior and direct and so when that starts to happen is when we also start to see some of that leverage but it's certainly something that we are laser focused on going forward.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: We have further questions. So I'll turn the call over to see.
Speaker Change: Gordon for any further remarks.
Speaker Change: So thank you all for your questions today I am very pleased with our Q3 results. We remain focused on accelerating growth in our consumer business, ensuring our <unk> business remains industry, leading and leveraging our unified tech platform to drive more innovation, we have a strong foundation in place to drive sustainable.
Speaker Change: <unk> profitable growth and I'm confident that we'll continue to create value for our travelers partners and shareholders.
Speaker Change: That concludes today's call. Thank you all for joining you may now disconnect your lines.
Speaker Change: [music].
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.