Expedia Group, Inc. (EXPE) Earnings Call Transcript & Summary

Welcome back to our next session here at the 30th Annual Goldman Sachs Communacopia Conference. For those who don't know, my name is Eric Sheridan, Goldman Sachs' U.S. large cap Internet equity research analyst, and it's my pleasure to host Peter Kern, the Vice Chairman and CEO of Expedia, for our next session. Peter, thanks so much for being part of the conference.

Thank you for having us, Eric. Appreciate it. Good to see you.

Good to see you as well.

So Peter, I wanted to take a step back first. It's been around 18 months since you were named CEO of the company. I wanted to maybe level set our conversation with you reflecting back on your time in that role. What did you see as the big broad agenda items you were trying to accomplish for taking on the role at Expedia and how you feel about that agenda as we're exiting '21 and moving on into '22?

Yes. Well, that's a big question. I think when I got there, I mean, obviously, we were quickly in the throes of COVID, which sort of changed some of the focus in terms of the short term and solutions. But broadly, my big focus was and has been with the team, and I've been adding lots of great people, is to really put us in a different competitive setting. We were a complicated company, basically a holdco in many ways, and that worked for a while. But we had reached a point where we were competing with big competitors who were simpler, could move faster, could get more done more quickly. And we really had to reset what our goals were and become, in my opinion, an operating company, something where the underlying technical infrastructure really worked across the broad group, where the brands might be differentiated but were part of a whole and work together for a common good, where we could use all that great tech and everything to drive our B2B business, which is a great business and a huge opportunity for us. So it was really kind of to simplify through that. Sounds easy to say but hard to do from a very complicated organizational structure, different technology stacks and all kinds of other business process complexity. So we've been working through it. I feel really optimistic about the future, but we are in the middle of a messy transformation that there's no easy way through it. You just got to push through it. So that's what we were focused on. I think we're definitely making huge inroads and -- but it's -- but we're still a ways from being where we want to be.

Got it. And against that agenda, maybe just one last big picture question of level setting, which is what do you see as the big opportunities that you have to get right for the company when you look out over the next couple of years that sort of are just top of mind for you in terms of executing against to unlock the opportunity set for Expedia?

So not to be redundant, but I think it starts at technology. We have to get that right, and we will. We have a great new CTO. We're making tremendous strides there. But we have to get that right. And that powers everything else. And in so doing, we will have a big opportunity, as I said, in the B2B world where we will be able to bring, I think, much more capability to the marketplace. And it's important to remember, in the travel space, we are a company that employs thousands of high-paid, highly skilled engineers. Most travel companies cannot and do not. And we are really good at that. They are going to hit other things. And our ability to help power the industry is really important. And I think as COVID has shown all of the leaders of all these companies, we all want to focus on what we're good at and maybe not spend so much time on the things we're not good at. And I think that will be a big opportunity for us to help power the industry in a much more holistic way. And then on the brand side, I think we've done not the best job of being clear to our customers what the brand proposition is, again, how the brands work together and why that's good for the customer. Forget about us, who cares about us. What does it mean to the customer? And that's partly why you heard about us launching this one loyalty plan across all the brands. It's like a unification move to help the customer understand why being in our universe is really impactful and powerful for them. So I think out of that tech rewrite comes a new marketplace model on the supply side and on the consumer side of how we optimize for everybody. And that's where we're headed.

Great. I wanted to turn to the demand side of the equation and maybe come at it from a couple of different angles. Maybe first, I think you've been very fair and honest in the last year or so on earnings calls where you say this is going to be volatile, but it's getting better, and there's a lot of moving pieces. Can you give us an update or a sense of where things are playing out as we exit the summer of '21 and move into the fall of '21 and how you're thinking about the demand environment overall for travel, given there's so many moving pieces between easy comps, Delta variant, people going back to school? How should we be just level setting the demand environment?

Yes. Well, I'll say we disregard the comps because it -- so nothing is comparable right now to anything. Maybe next...

We'll never see that kind of comps again.

Yes. Maybe next year, we'll have comps to 3 years ago or something. But the -- what we saw -- I often say this, there's not a lot of secrets in travel, right? We all see it. We sense it. Actually, most of us live it, right? In the summer, everybody was feeling better. Everyone was feeling safer. People were clearly traveling domestically, certainly in the U.S. and in Europe. And then we had Delta, and that sort of changed things for a little bit. It was definitely a dulling effect on the marketplace. But as I said, I think, in our last earnings, there's also a lot we didn't know about how the fourth quarter demand trends would shape up. We have back-to-school. Some people like you are luckily back to work. Wish our teams were, too. And that starts to change things. People talk about this flexible work environment. You can work from anywhere. Well, not if your kid is in school and not if you have to be back at work, maybe work from anywhere for 3 days a week, but that's a lot different than work from anywhere. So I think we weren't really sure, and I was definitely cautious about what that would mean. Corporate wasn't going to come back as robustly in the fall. We all knew that. And leisure was going to be uncertain. And I think in general, it's been decent. Leisure remains strong. Domestic remains strong. Underlying all of that is some small and midsized independent businesses, not so much the big international scale business travel, but the small businesses are still traveling. So demand has been kind of okay. I can't say it's what we expected because we weren't sure what to expect. But I think demand, strong for the holidays, as you would expect, and a little bit day by day in the meanwhile. And of course, we're seeing the lift in interest from Europe. Now that the announcement was made about Europeans being able to travel to the U.S., I think that will be very good for us, for travel generally, but for us, too. And I think we are pretty bullish about next year. We are just starting our annual process of forecasting. And frankly, it's a lot of guesswork, as you can appreciate right now. But I am really bullish that next summer will be the best summer in travel ever. Now will Asia be back the way we all hope? Probably maybe not. Latin America may lag. There are markets that may lag. But in general, I think next year, certainly into summer and the back half, assuming COVID hasn't gotten some new scary variant, and we're all back to work, I think the back half of next year will be normal, strong, good. I don't know at what level.

Got it. One of the thing you touched upon in there is there were a lot of varieties of travel and industry themes that played out as COVID evolved over the last 18 months. One of the things I've found interesting is as you go and talk to different participants in the travel industry, everyone has different theories about what's permanent, what's transient and how travel is going to be altered. I know there's a lot of moving pieces in there, but what are some of the key learnings you've had as a company that you think inform how you want to position the company against what might be the travel landscape, whether it's alternative accommodations or business travel or cross-border? When do you think about aligning product set against broader travel themes?

Yes. Well, I'll be the one of all those travel people you talk to who says I mostly think it reverts to the mean. I heard one of my colleagues in the industry yesterday quote Bill Gates' thing about things change a lot in the long term and much less in the short term than people think. I just don't think -- I think corporate will be back. I think hotels will be back. I think VR has had a benefit. Certainly, more people have tried it. We've had a benefit because we've been able to use that time to really land our brand in Vrbo and push forward into that. We've gained share in all our key markets. That's been good for us. But in terms of long term, yes, maybe we're up the curve a little faster on VR exposure because more people were sort of forced into experiencing the product and had a good experience. So maybe it's a little more of the share than it would have been in the normal trajectory. I think corporate will largely come back. Parts of it may well be different. But I hear myriad stories about bankers or lawyers or any -- who won business because they got on a plane and went somewhere during COVID when everyone sat home and did Zoom. So as long as that's going on, people are going to start getting on planes to compete. So I think internal company travel, that may change. Other things may change. So I think I'm less of a believer that things have permanently changed. I don't think everyone's decided that staying in a cabinet -- in a national park is better than going to Paris. I think it was good. They had fun. Maybe they'll do it again some day, but they'll go to Paris. So I think we're going to see it come back strongly in big cities, in all the major destinations. And I think there'll be some slight shifts within that, and some of us will benefit from it and others won't. But I don't see any major, major macro trends that I believe will be along with. Now how long COVID goes on for and whether that's a weird factor that lasts longer than we hoped, maybe. I think for us, it was really more about revealing where we were strong and where we weren't, which became very stark when some things got good and some things got bad and weren't sure why and then you realized you were never strong at those things. They had just become stronger during COVID. So domestic European travel is not a strength of ours. Never has been. It was revealed pretty starkly during COVID, and that's something we have to plan and address for the longer term, just for the general travel market, not because domestic Europe is going to take over the world, just because it's a piece of the market where we're not strong enough, and we have to do the work.

Got it. Understood. One of the things, I think, that's been a main talking point among investors in your stock early on in your tenure, you came to the market and talked about efficiencies you wanted to drive into the business, $750 million of fixed cost reductions, $200 million-plus of variable cost efficiencies. Can you talk a little bit about where you are on gaining those efficiencies in the model? Obviously, it's super noisy with where the volumes sit today versus 2019. But how should investors be thinking about the progress that's been made on gaining those efficiencies and how those show up as the business scales back into volumes over the next 12, 18 months?

Yes. So I would say on the fixed cost side, we're largely through most of it and expect to realize our declared goals. I hope to exceed them, but we're largely through most of that. And as -- in terms of annualized realized gain. The -- as you mentioned, the variable part has to do with volumes. And we're not yet at historical volume levels. So as those come back, we also believe we have made those gains already exist, but for the scale that's not there. So we've made the necessary changes to get those wins. And then longer term, I think, again, as we do the work on the technology, as we get better at it, I think there's more -- there's higher risk or more likelihood of more benefit than less as -- or the question, whether we need to invest more. We may need to invest through this period as we drive this transformation. But longer term, I think there's more efficiency to be had rather than less.

Okay. Moving beyond just what you've announced, one of the things that also, I think, is heavily debated is the cost-cutting initiatives, but how it feeds into marketing efficiencies. I think the industry sort of has had mixed messages, not necessarily you, over the last 5 years about how important is or isn't loyalty, how important is paid traffic versus direct traffic and driving your brand. You touched upon loyalty a little bit before. Maybe we take the performance piece first. Can you talk a little bit about where you are in terms of streamlining your customer acquisition strategies across your brands and how folks should think about the initiatives you're trying to implement to amplify brand versus performance or direct versus paid, and how you think about getting the right mix of that right over the long term?

Yes. There's a lot in there, as you can imagine. But I'll start with performance and say the journey has been bringing the groups together, standardizing data and measurement and algorithms and everything else. We are a long way through that. And while not finished, I'm happy to say we reached the stage where we are actually now able to do a lot of testing and learning in ways that we couldn't across the brand group as opposed to across a single brand. And that is -- that will pay, in my opinion, huge dividends. But we are in the relatively early innings of that journey of testing. Now that we have the tools now that we're aligned and how we do things, the testing is what will really unleash the efficiency and the opportunity. I would say we've also been highly kind of keyed into efficiency as a goal, and we have to be more balanced about efficiency and growth, right? We have to find the veins of growth that are also efficient and additive as compared to just tuning in into efficiency and the veins we're already in. So those things, I would say, I feel optimistic about and are well along the way, but it is now the learning that we get from this testing. And as I was just explaining in an investor group, the testing doesn't happen in 5 minutes, and you know all the answers. You turn things on and turn things off. You try different things. You get learnings. You expand the test. So it is a process. You can't just move the dial all over the place and see what happens. But I am broadly optimistic about that wholly and bringing efficiency and whether we drive that efficiency into there for more growth as opposed to more dollars to the bottom line. We will figure out the right balance of that over time. As far as brand goes, I think you know, Eric, we brought in a new head of our brands from Apple, a terrific talent, Jon Gieselman. He is retooling the entire group to, again, be optimized against the family of brands as opposed to a single brand or a bunch of single brands. And part of that was this loyalty clock that we brought together. There will be more things that unite the brands and bring them into the collective service of the customer as opposed to we were very kind of internally focused. What does this brand do, what does that brand do as opposed to what is it doing for the customer? And how do we get the most customers in the house? And how do we keep them? And how do we get them to have rewarding experience and use all the tools we have to make that happen? So that's a focus of ours. As we now reset how we approach that and get into a different mindset about brand, I would say, historically, our brand marketing has been, "You should travel." That was basically the message of any of our brands. Travel good, you should travel. And we want to migrate that to you should travel with us and here's why. And we have to be much more clear about the advantages, what loyalty brings, what the product brings, et cetera. And we believe in that. And again, married to the technical advancements we're making, et cetera, we can build a much stickier direct relationship with the customer. And as you well know, the more you can do that, greater the lifetime value is, the better you can compete to find customers in the wild and bring them into the ecosystem. So it's all kind of a virtuous cycle. And we're literally attacking every part of it. And right now, it's a lot of wars on many fronts. But as those -- as we start to tackle some of those, I think we gain a lot of velocity, and we get the customer really understanding why they want to be with us.

Got it. Maybe just one small follow-up there because you've teased out now twice about the unification of the loyalty programs into one rewards platform. Totally understand the theory behind that. Help us understand a little bit about how that gets implemented. Is it already unified? Or are there investments needed to get made? How do you advertise that to consumers and drive awareness among consumers once implemented?

Yes. So I think the last part is the easiest part, the one I worry the least about. The beginning part involves technology, which we are already on a path to unify our loyalty stacks and get a multi-tenant loyalty stack anyway. So that's in process. And there's some -- obviously, some business logic, if you will, that has to underpin a loyalty program and underpin the migration of the existing loyalty programs into a single loyalty program. But those things are happening in concert, and one won't be done before the -- like we have time. We're not going to launch it tomorrow. We're going to do it right. We're going to do it next year, not sure when yet. And then the marketing part, again, this will be a great opportunity for us to tell the world, the consumer world, why they want to be with us, all the ways you can earn value, all the ways -- which, by the way, we provide many values to our customers as part of membership that we don't -- that they don't even realize is part of membership, certain discounts and other things. So we have to own that all in the program, and we have to be loud and proud about it. And we have to make sure the customer really -- I mean that's what this is about. It's about simplifying it for the customer so they really understand the benefit. And I don't think there'll be a better way to earn broad travel benefit than what we have. We already have 145 million people who have been in the rewards programs. That's with most of our brands still not having rewards. Admittedly, our biggest brands have. But we have tons of opportunity to bring millions and millions more people into that and again, create that sticky virtuous cycle where they come direct to us. And we will amplify the app, and all the benefit will reside in the app. And we will push people to the right behaviors that are good for them and good for us.

I know the end game of how you'll define success. But as folks like myself or investors that are watching the webcast trying to determine success with these initiatives over the next 2 to 3 years, where do you think it will show up first? Will it be in better margin because of marketing efficiencies and return on your marketing spend? Will it show up in volume growth and customer growth? All the above? Like what will you be watching or what can we be watching to define that this is working for you as a platform?

I think the easy wins easy. They weren't so easy. But the easy to notice and define wins will initially be on the cost side. We will be more efficient as an enterprise. We already are. And that will continue to play through as volumes increase and we get the other efficiencies that we're not getting yet from volume. So that will be easy to see. I think the market will come back. And yes, the more volume, we can grab it efficiently and will be another marker for how we're doing. But there'll be a lot of micro things. And I'm not saying we'll report on all of these or whatever, but from my perspective, how many members are we having? What's happening to the speed and conversion and everything in the product? How many people have the app and use the app? And how many products do we have that stay with them in trip that make them come back to us and have engagement with the app? Because ultimately, an app's great, but not if people don't engage with it. So there's a lot of really tactical measures. And then on the flip side, there's the B2B side where we have, again, a very robust business, but tons and tons of opportunity, both with our existing client base and with the potential out there in the world, all the suppliers and potential partners for us, rewards programs all around the world that we already power, but many we don't yet. We have a huge opportunity and we want to really empower the B2B world for a lot more people, if you will, to be in the travel business. So we'll be able to measure those things discretely sort of operationally. But I think it's going to be first on the cost side, then on the growth side and then probably on our B2B side.

Okay. You talked a little bit about alternative accommodations, but I want to go back to Vrbo within the portfolio. Maybe even before the pandemic, there was an effort afoot to sort of reposition Vrbo in the market early in your tenure. And then obviously, you saw the benefit that alternative accommodations had, especially in the last summer period as people felt a little more free to travel. Talk a little bit about what your key learnings have been around alternative accommodations pre and through the pandemic and how you're investing against Vrbo as a brand and alternative accommodations as inventory, supply to position to capitalize on that industry theme longer term.

Yes. So I think you referenced that we went -- we were changing the brand from HomeAway to Vrbo kind of in 2019. I would say, in retrospect, we probably underspent that and never really landed the move. I think the pandemic gave us the tailwind and the enthusiasm to really lean into it without fear of, "Oh, we spent too much and it didn't really work." And so we've spent into it. We really had the opportunity, fortunate for us, to land the brand in a new way that we hadn't yet. And that continued enthusiasm and the continued appeal of that use case has given us the further conviction to keep going and to keep driving it. Right now, I would say, a lot of our brand spend in this period is weighted towards Vrbo. So -- and certainly way more weighted than it ever was towards Vrbo. So I think we now feel really good about that in terms of landing the brand and the proposition to consumers, et cetera. I think we believe -- as I think I mentioned earlier today to some investors, we've used the time to clean up the proposition and make sure we're competitive and make sure consumers understand it and our supply partners understand that you referenced growing supply. We weren't highly focused on that initially. And then we started to see a lot of compression in some of these key leisure markets. And so we started to get after that. We haven't formulated the longer term, do we -- this isn't a do we want to be everywhere? Do we want to go head to head with Airbnb in every market? That's not our plan. But we do have tremendous opportunity to continue to expand in our key proposition, which is a whole home largely for vacation, largely in vacation destinations. And there's lots of opportunity in Europe. There's lots of opportunity in other places. So we will continue to push into that. And we feel good about that. So we feel like there's plenty of growth. As I've said, we've grown share in all our major markets. We're not trying to beat Airbnb in $60 New York City apartments. That's not where we're going to compete. We're going to compete in what we're good at and stick to that and -- so the consumers understand the proposition. And I would only say, just to extend some of the other ideas, that as we get Vrbo, as we get the technical platforms all wired together in one platform, we will be able to externalize Vrbo in a way we haven't before, including through our B2B partners, our rewards partners, et cetera, which is a huge opportunity for those homeowners and managers as suppliers and for a different group of consumers through rewards or other ways to consume that product.

Okay. Probably the -- one of the last big industry events I attended at the end of 2019 was Focusrite. And the talk of that conference was the connected trip, owning more of the trip, expanding the offerings that a lot of travel platforms offer to consumers to expand wallet. Can you give us your update on your own initiatives around owning more of the trip, what that means for Expedia's business over the long term and how you see some of the opportunities and challenges of building inventory, supply, matching demand with supply as you try to grow that aspect of your travel platform in the years ahead?

Sure. I was smiling because I get asked about the connected trip, which our competitor likes to talk about frequently. And I always say, do you mean a trip? Because I think that's what a trip is. Expedia has been in the trip business for 20 years, and we've always been the biggest full service, every product kind of player. Now some of our products are better than others. You may have seen in activities, we used to get our own supply. Now we -- we're doing deals with the major activities companies, bring their supply into our universe because we think that's the best way to give the consumer the right experience. So we're losing some of the religion we used to have around some of those ideas and saying, "Right, let's get the right supply in. And if that can be done through a third party who already has great supply and the economics make sense, we'll do things like that." So -- but for us, the real opportunity, it's not so much the connected trip. I think we've been doing connected trips for 20 years. I think if you want to focus on the connected part, for me, it's not the connected, as in I had a plane and I got a hotel and then I got an activity, it's really, I got those 3 things and now we're with you along the way. And if something cancels, changes, if you need -- if your flight is delayed, if you're walking down to San and there's an activity that's 60 feet away, and that activity wants to send you a discount coupon if you go right now, like that's where it becomes really sticky and connected in a way that is different. And that's about creating a great product for the consumer and great propositions for why, as I said, they want to stay engaged with your app, they want to stay with you and they understand what they're getting for you. And that goes all the way through to service, right? They have to trust that you're going to provide them with the right service if something goes wrong, all of those pieces. And we are focused on all of those pieces. So I would say we were connected trip before connected trip was cool. But now we have to -- we want to be better in every part of our game and we're working on it.

Maybe just one follow-up there because you kind of referenced it. As I talked to folks in the industry, feel free to tell me I'm wrong on this, but the biggest challenge seems to be scaling supply at a level that allows for conversion and also allows for good economic returns. Can you talk a little bit about the opportunities and challenges of like finding good supply at a level that makes sense to you to add those offerings to your consumers as their trip sort of proceeds or evolves? Is that the biggest challenge to that of just aligning that supply with demand? Or is it something I'm missing?

I don't think so. I mean I think, again, one of the things we did as a company that we were really good at and had an army of people to go make happen was get supply. Now we can debate booking has the long tail of supply. We were never that great there. As I say, we're bringing in activities. We found some different solutions to make sure we have the activity supply. But I don't think supply broadly is the make or break for the connected trip. We have everything we need to make that a real thing. And I'm going to stop saying connected trip because I don't think it's a thing. But we -- that is not the hindrance. We have all the air supply. We have all the hotel supply we need. We could be better in the long tail in some places, but plenty millions of opportunities for people, VR, everything. So for us, it's just making it simple for customers to put things together, to build their trip, to have the information, to make good choices on their trip, to change things, to modify -- to build on top of it the right CRM platform to help them, again, advise them along the way, the right app connectivity to advise them along the way. So I don't think it's a supply problem. I think it's really just a -- maybe for all of us, a product problem or whatever. We all just have to -- we have to be better at giving the customer an experience that makes them want to buy multiple things with us, makes them want to get rid of all the friction of having different itineraries and other nonsense that nobody wants and give them the trust and confidence that if they do it all in one place, they're going to have a better outcome. That's what we're trying to do.

Okay. I want to turn to maybe some longer duration questions in the few minutes we have left. Obviously, one of the big topics for you guys is how capital is going to get allocated. You've done some things with the asset portfolio through COVID-19. I think in my role, we're always asked about what's Expedia going to do with their asset portfolio over the longer term. And obviously, you have some leverage. You had to do some capital moves in the mix of the pandemic. Maybe we can split this into a couple of pieces. From your perspective, what do you see as the biggest priorities to compete for allocating capital inside the business to drive growth and to capitalize on the opportunity set you have first? Maybe I'll ask that first, then we'll go to a couple of follow-ups.

Yes. I would say for us right now, internally, it's really about having the right resources, think of that as people generally, to drive the technical outcomes we're looking for, and then having the right allocation of capital to marketing and within marketing to drive the business, if you will, in the interim while we're getting the machine tuned up to be great. So those are the -- broadly, the competing interests for capital. But we have ample capital to do both. So I don't think it's really the competition. And it's not a zero-sum game. We're taking more money to the bottom line, too. So we're -- but those are the big agenda. That's where we're putting the most intellectual calories against and capital to follow where required.

Okay. And then maybe turning to the balance sheet side of the equation. Obviously, you had to do the moves you needed to do with capital at the low point of the pandemic. How should investors think as we return to more normalized volumes and the industry repairs back to those levels? What you see is maybe the comfort level for debt in the balance sheet. How do you think about aligning the balance sheet and debt levels against, again, sort of the business opportunities looking out over the medium to long term?

Yes. I don't think there's any question that as the business returns to, as you say, more normal levels, that we intend to and will delever the enterprise. That's been our commitment. We've said we were going to do it. And we have traditionally stayed at fairly modest leverage and investment grade, and that's where we intend to stay. As far as what we do with the rest of the capital, if you will, since hopefully, we'll be much more profitable, and that's the expectation, I think, we've always been good about trying to return capital to investors in efficient ways. It's always been a top-of-mind issue for the company, and I'm sure it will stay that way. And as an operator, I also hope that there's plenty of opportunity to put the money to work to grow the business faster. We have been historically highly acquisitive. You mentioned some of the things we have gotten out of. And largely, that was to simplify the company, right? All those things take -- create friction, take calories. Somebody has to worry about them. They're not necessarily determinative of our long-term success. So we were trying to skinny down the problem. And I think we've done an excellent job of doing that. In the future, I think -- not to say we won't be interested in buying things, but I think at the service of making the technology better and stronger and faster or the supply side opportunity is better or I think less of just reach for reach's sake. And I think that will probably be our bias. But again, I think, first, we're going to take down the leverage, then we're going to look at return -- the best way is to return capital as against what the opportunities are in the business to drive growth.

Got it. Do you still see -- maybe as one follow-up question, do you still see room to sort of rationalize the asset portfolio that Expedia has? Or do you -- with some of the moves you've announced in the last 6 months, it seemed like the message coming out of the last earnings call was that you feel pretty good that most of the moves on the asset portfolio are behind you, not ahead of you. Just want to make sure we understood that messaging right.

Yes, I think that's broadly right. I mean, again, we'll look for every opportunity we can to make the work simpler and faster and focus the most resource on the most important stuff. But I think we've called through pretty much everything I can think of. And it doesn't mean there won't be something you've never heard of or a couple of little things you've never heard of now and then, like no promises. We've got a few of everything. But no, we've done a pretty good job. Eric, our CFO, and his team have -- we've really run the traps, and we think we've cleaned up most of what doesn't -- most of what we had to look at and everything else, we're fine with. And never say never, but I think we're -- you won't see much more of that.

Maybe I'll just ask one follow-up as we come to the end of time. When you think about the assets you have, and we think about travel volumes, at some point, returning to where they were in '19, and you struck up, in my opinion, sort of an optimistic tone that we're going to get back to those levels and travel is going to be a pretty great component of the global economy going forward, where are the areas you think you're particularly well positioned as either cross-border travel opens up or North America travel opens up, things like that, to capitalize on the trends we might see over the next 1 to 2 years?

Yes. I think, look, we've definitely been hurt by this combination of trend of lack of international travel, which in turn drives big cities where we have traditionally been strong. And that collective coming back, meaning the Europe to the U.S., more U.S. outbound to Europe, that's a big opportunity that we over-index to, at least against ourselves. And that's a really great opportunity. I think, again, we have a lot of big ambitious things that we think will just drive us better in our -- in all our markets, as we've talked about. But we also have some things we clearly historically have not been as good at, and I mentioned domestic Europe, for example. And those are opportunities for us to focus on and get right. And we haven't gotten it right historically. And I think our approach now is less of a there's one simple answer to the question and more of a we're going to go market by market and figure out how to attack and where we want to be and where we want to heavy up. And I think we will learn and we will come up with methodologies to go build ourselves into other place -- in some of these areas where we have historically been weak. So there's no reason we shouldn't be good at domestic European travel. We just didn't have a good approach to these markets in general. And we let the international business, which was better, sort of hide the fact that we weren't as strong in domestic. And so we've got to go address those issues, and we will.

Great. Okay. I think with that, we're pretty much out of time. Peter, I want to thank you for being part of the conference this year. I really appreciate you making yourself available to share your views and to share us where Expedia is right now as a company.

Thanks, Eric. I wish I could have joined you in person in your fancy building but -- downtown, but it's great to see you, and I'm glad you all are back to work.

We're doing it in person next year. I guarantee it. That's my view.

I look forward to it. Take care.

Thanks, everyone. Take care.