The operator welcomes everyone to the Booking Holdings First Quarter 2024 Conference Call and reminds them that the call may contain forward-looking statements. These statements are subject to risks and uncertainties and may differ from actual results. Booking Holdings' speakers, Glenn Fogel and Ewout Steenbergen, report a strong start to 2024 with nearly 300 million room nights booked, exceeding expectations and growing 9% year-over-year.

The company's first quarter revenue and adjusted EBITDA exceeded expectations, with adjusted earnings per share growing significantly. Global leisure travel demand remains strong, particularly for the upcoming summer season. However, there may be some deceleration in room night growth in the second quarter due to the timing of Easter and geopolitical factors. The company's key strategic priorities, including their connected trip vision and loyalty program, all work together to improve the overall travel experience for both travelers and suppliers.

The company believes that by improving the overall travel experience for their customers, they will see increased loyalty and more direct bookings. This is supported by early proof points, such as growth in repeat travelers and an increase in the average number of trips booked per traveler. The direct booking channel is also growing faster than paid marketing channels. The company plans to continue investing in these channels to attract new travelers. The company's connected trip vision is expected to further drive positive proof points around loyalty, frequency, and direct booking behavior. In the first quarter, there was strong growth in connected transactions, although this was off of a small base. These transactions represented a high single digit percentage of Booking.com's total transactions.

Booking.com believes that by offering more value and a better overall experience to travelers, they will be more likely to book more trips and choose to book directly with the company in the future. Flight bookings have increased by 33% due to the growth of Booking.com's flight offering. The company is also seeing strong growth in rental cars and attraction bookings as part of a connected transaction. By enhancing and expanding the attractions vertical, Booking.com hopes to increase travel engagement and encourage travelers to use the platform more in the future. The company's merchant offering, which brings together different elements of travel, not only supports their connected trip vision but also benefits both travelers and partners.

The company offers various payment methods and discounts for travelers and provides fraud protection for suppliers. They believe that AI technology will play a key role in creating a more personalized and seamless travel experience. The company has a strong team of AI experts and proprietary data to develop AI-powered offerings. They have already integrated AI into their platforms, such as an AI trip planner and a travel assistant, and plan to continue improving their offerings using customer feedback. AI technology will also be used to enhance customer service through self-service tools and improving the efficiency of live agents.

Gen AI is expected to lower customer service costs and improve the customer experience for travelers, especially those in the higher tiers of the Genius loyalty program. The program is also being expanded to other travel verticals, such as rental cars, flights, and attractions. The company is focused on building a mutually beneficial partnership with its millions of supplier partners, particularly small independent businesses, in order to improve their competitiveness and profitability.

The company is seeing success in onboarding small independent businesses for their alternative accommodation offering, resulting in a 11% increase in global listings. They are focused on improving the product for supply partners and travelers, particularly in the U.S. The CEO is encouraged by the strong first quarter results and believes in the long-term resilience of leisure travel demand. The CFO is optimistic about the company's future and will continue to work with the leadership team. In the first quarter, room nights grew 9%, exceeding expectations by three percentage points.

In the first quarter, the company saw higher than expected room night growth due to an expansion of the booking window and strong demand in Europe. The direct channel accounted for a significant portion of room night bookings and the company is focused on increasing this mix in the future. Mobile apps have been a successful channel for direct bookings and the company is seeing a higher mix of room nights being booked in alternative accommodation properties. In the first quarter, alternative accommodation room night growth was 13%.

The global mix of alternative accommodation room nights increased to 36% in the first quarter of 2023, driven by a 33% increase in airline tickets booked on the platform. First quarter growth bookings exceeded expectations, with a 10% increase, and revenue also exceeded expectations with a 17% increase. Marketing expenses increased by 6%, but as a percentage of growth bookings, it was lower due to higher ROIs and a higher mix of direct business. Performance marketing ROIs also improved due to efforts to increase efficiency in marketing spending.

In the first quarter, sales and expenses were slightly higher than last year due to a higher merchant mix, but fixed expenses were lower than expected. Adjusted EBITDA was above expectations due to strong bookings and marketing efficiency, and adjusted net income and EPS were also up significantly. The company's cash and liquidity position improved due to a debt issuance and free cash flow, but was partially offset by capital returns. For the second quarter, the company expects room debt growth to slow down compared to the first quarter.

The company expects the booking window to be similar to last year in the second quarter, but predicts a more negative impact from the ongoing war in the Middle East. The April room debt growth rate was higher than expected due to Easter falling in March this year. Adjusting for this, the growth was in line with expectations. The company predicts second quarter bookings growth to be between 3% and 5%, with revenue growth between 4% and 6%. The negative impact from changes in FX will be offset by higher constant currency accommodation ADRs and positive impact on flight bookings. Marketing is expected to be neutral year-over-year, but sales and other expenses will grow faster than revenue due to a higher merchant mix. Fixed OpEx will also grow faster than revenue due to investments in new technology platforms.

The company expects second quarter adjusted EBITDA to be down low single digits year-over-year due to shifts in Easter timing and changes in FX. However, when normalizing for these factors, they anticipate mid-to-high single digit growth. The company is pleased with their first quarter results and the current leisure demand environment. They are not updating their previous full year commentary at this time and expect 2024 to be a strong year. The company thanks their colleagues for their hard work and dedication. During the Q&A portion, they were asked about changes in the shape of the year and booking window trends, but the company did not provide any further information.

In the second quarter, there is expected to be a shorter booking window and a pull forward of room nights from the first quarter. The Middle East is expected to have more of an impact, but Easter will provide a slight benefit. Overall, the combined first half year results are strong and consistent with full year guidance. The comps for the first and second quarter are tougher, but the second half of the year will see easier comps. Paid marketing channels have a higher ROI, and the company is pleased with their overall marketing programs. The percentage of total transactions that are connected is not specified.

The speaker discusses their holistic approach to using money and constantly evaluating and adjusting their marketing programs for the best ROI. They credit their success to the hard work of their team and highlight the growth of their connected trip program as a key factor in delivering value to customers and driving loyalty.

Justin asks for an update on the regional mix of the company and if any region is growing faster than others. He also asks about the impact of the Digital Service Act in Europe on performance marketing channels. Glenn responds by saying that the pandemic has affected regional performance and that Asia is still catching up. He also mentions the company's strong presence in Europe and their efforts to improve in the US, which have shown positive results, especially in alternative accommodations.

The company has a strong global presence in alternative accommodations and is making progress in expanding in the U.S. market. The first quarter saw high single-digit growth in Europe, mid-teens growth in Asia, and low single-digit growth in the U.S. The company believes it has outperformed the market in the U.S. and has opportunities for future growth. The changes in Google's DMA did not have a significant impact on the company's marketing efforts and they continue to see improvements and optimizations in their paid marketing approach.

The speaker, Glenn Fogel, discusses the growth and success of the Genius loyalty program, but does not provide specific numbers. He mentions that the program is expanding into new areas such as flights and attractions, and emphasizes the symbiotic relationship between the program and its partners. He also mentions that the program is optional for partners and they can choose how to participate. Another speaker, Eva, adds that the company is seeing low single digit growth in the US, but does not provide any specific reasons for this.

The speaker discusses the importance of providing value to customers in order to increase their frequency of return. They mention the term "flywheeling" and how it relates to giving more value to customers. The speaker also mentions the growth potential in the U.S. market and the various strategies that have been implemented over the years to expand their position.

Glenn Fogel, CEO of an online travel company, discusses the company's future growth in the U.S. market. He notes that there is still a lot of potential for growth in the non-online travel sector. The company has been making incremental changes that have resulted in increased market share, but Fogel believes that there will be a transformational change in the future. He mentions the use of AI and technology as potential differentiators from competitors, and acknowledges that there is still room for improvement in the travel industry.

In the paragraph, Glenn Fogel discusses the use of AI, particularly Gen AI, and its potential for improvement in the next few years. He also mentions the importance of getting it out quickly to both suppliers and travelers. He thanks Brian Nowak for introducing the term "flywheeling." In response to a question about ADR by region and summer travel trends, Fogel explains that ADRs were up in Europe and flat in North America and Asia in the first quarter. He also mentions a healthy growth in summer travel bookings, but does not provide specific numbers. Finally, he is asked about the behavior of those with access to a trip planner and does not provide any information.

The speaker acknowledges the potential for the company's research to have a positive impact on the top of the funnel and drive greater connected trip activity. However, they also note that the feature is still in its early stages and only a small number of people are currently using it. They express confidence in the potential for generative AI to simplify the travel planning and booking process, but caution that it will take time to see significant changes. The ultimate goal is to provide a holistic system that enhances the overall travel experience for customers.

Lee Horowitz asks Eva about the structural growth algorithm for online travel and where the company should invest to drive revenue growth. Eva believes the company is in a strong position for future growth due to the shift from offline to online bookings and consumers spending more on experiences. She also highlights the importance of Direct bookings and the company's success in retaining those customers.

The speaker discusses the potential for growth in alternative accommodations and the combination of traditional and alternative accommodations on their platform. They also mention the strategic benefits of their investments in generative AI and the potential for structural growth in the coming years. The increase in fixed operating expenses is linked to strategic expansions that will drive future growth, but the company plans to lower this growth from 2025 onwards, resulting in more operating leverage.

The first quarter saw positive room night trends, with an expanding booking window and strong demand in Europe. The impact from the Middle East was minimal, and the company was able to pull some room night bookings from the second quarter into the first quarter. The company also made investments in attractions and is focused on increasing supply and driving traveler behavior through the connected trip offering.

The paragraph discusses the impact of Easter on the company's attractions business, which was anticipated to be negative. The company primarily sources attractions through third parties and also acquired Fair Harbor to expand this aspect of their business. However, their current priorities are focused on flights and ground transportation. They are still working on building out their attractions offerings and plan to incorporate it into their overall connected trip experience. The use of their app allows for customers to book attractions while in destination, and the company is also implementing a Genius Program to push offers to customers and increase demand for attractions.

The speaker discusses the potential for growth in alternative accommodations and the importance of offering both traditional and alternative options on the platform. They also mention the increasing demand for both types of accommodations and the benefits of having them available together for customers to compare.

Glenn Fogel discusses the quality and quantity of inventory on their platform, noting that they cover a range of price points but may not have enough high-end homes in certain areas. He sees this as an opportunity for growth and mentions their focus on expanding in the US. When asked about obtaining more single unit inventory, he mentions working with property managers. He also briefly mentions the potential impact of big events in Europe, such as the Olympics, on travel demand.

The speaker emphasizes the importance of catering to multi-property managers and individual property owners to attract more demand. They mention recent improvements made to the platform to make it more user-friendly for managers. The speaker also mentions the upcoming Olympics, but reminds listeners to focus on the company's long-term success rather than short-term events.

The speaker thanks various groups for their support and introduces a new team member, Ewout, while emphasizing the company's long-term vision.

The operator is thanking everyone for participating in the call and announces that it is now over. They also give permission for everyone to disconnect and say goodbye.

This summary was generated with AI and may contain some inaccuracies.