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

Hello, everybody. Hi, everybody. My God, you're a lot of people. I'm very happy to be here. I'm very happy to welcome you to EXPLORE. You know I know it's a -- yes, yes, yes. I do know that it's a bromide to call something new. But there really is a new Expedia. And I hope today that we're going to be giving you some insight and some inspiration for where we have been and where we're going. See, we've now been at this for about 25 years. And we finally, yes, finally, got it right after all the topsy-turvy rollercoaster that we've been riding all these years, and let me tell you why. Our business has had its heart stopped twice. Something profound happens when your heart stops. You reassess everything. Now I first became involved 21 years ago on the eve of 9/11. We had just acquired a controlling interest in Expedia from Microsoft. We haven't officially closed by September 11. And we had this out clause, we could exercise it if, in fact, something materially changed. Well -- yes, yes, yes, they did. All travel stopped worldwide. We thought, should we get out of this thing? The debate went on for hours. And then someone said, if there's life, there's travel. So the assessment after that heart stoppage was bet on life. And of course, travel returned robustly and life won. Heart stop number 2 was the pandemic. I don't have to tell you, it was bad. Everything was canceled. We suddenly had billions of dollars of returns. We had to scramble for billions of dollars of debt just to keep us going. Our 25,000 workforce was reduced by 1/3. We just built $1 billion headquarters in Seattle that we had opened just in time to shut it down. And we lost 95% of our business overnight. We sat around and thought, "What the f***. I mean what are we going to do now?" If there's life, there's travel wasn't enough this time. It wasn't as simple as waiting a couple of months for travel to return, not this time. We decided not to let a kind of mighty tragedy go to waste. So while the world was doing jigsaw puzzles and baking bread, we took the time to decide what this company could be, to reassess. We decided to radically revolutionize the company and come out of this nightmare, not just open for business, but to reinvent all the processes where we serve travelers. In 2001, we took a leap of faith. This time, we took a leap forward. The first thing that we had always referred to the people who used Expedia, we call them customers. We realized they're not customers, they're travelers, it's a unique subset that needs to be dealt with uniquely. And the question became, what do travelers need from us? And we mean that down to the smallest molecule of what travelers need. Now I've watched this internal sausage wrangling now for the last 2 years. And it's pretty hard to impress me after all this time I've been in business. But I've watched this thing taken apart and then reassembled in so many intuitive and smarter ways. I can tell you this, in years past, when we did these meetings with all of you, we well -- I mean, I guess, to be frank, we went through all the ritualistic presentation motions, a dry report on this, a limp demonstration of an abstruse feature. And sitting in the audience, I could kind of hear sleepiness waft over the crowd. So in preparing for today, and I do hope in performance, we've spent as much time and creativity as we have in making this year's EXPLORE as good as it gets in demonstrating our new Expedia. But I don't want to foremost you. There's this great show business story that once when Danny Thomas was introduced at the Sands Hotel as America's foremost comedian as he walked confidently to the microphone, someone in the first row shouted out, "Okay, foremost me." And now that I set my colleagues up for such a high bar, let us begin. Remember, if there's life, there is travel. And here's the world's foremost travel company, Expedia for travelers. Thank you.

Thank you. Thank you, Barry. Thank you, everyone, for being here. It's great when your boss comes on and sets the bar really high for you, adds a little more pressure. We're really excited to be here and back together again with all of you. I know many of us are still recovering. But it's remarkable how far we've come as an industry from the depths of the pandemic. Today is a testament to our collective resiliency and drive. So how about a hand for all of us that have managed this. Now I know many of you have been to our partner conferences before. But to be clear, as Barry said, this year is different. Why? Because we've had 2 years of extreme business conditions. We've seen some of the worst traveler problems we've ever seen before. And frankly, it's because our lives were turned upside down by the pandemic. Through all this struggle, we decided it was high time to take a hard look at all the issues that have been holding back the entire travel ecosystem and what role we've been playing in it. We asked ourselves, "If we removed our old biases, how could we reimagine what was possible for travel broadly? How could we facilitate the need of change?" This self-reflection led us to a wholly new perspective on the industry and our role within it. It has pushed us to break from the old and reimagine a new way forward for all of us. So let's go back for a moment, the dawn of the internet agent travel. Online travel was an amazing innovation when Expedia launched 25 years ago. It truly democratized travel. It allowed people to discover thousands and then millions of travel options and, in turn, brought millions and then billions of travelers to your brands. It was a great innovation that helped travelers find incredible choice and helped your businesses reach new audiences. But over the course of 25 years, something went wrong. We let the market become commoditized around price. Now we are not without blame in this, but the giants of search and meta amplified the problem. And many of our competitors further exacerbated the issue by abusing rates that you never intended to have out in the world. We all let this happen, maybe even made this happen. The market started driving travelers to the cheapest alternative, even if it wasn't the right choice for that traveler. We lost sight of the fact that most travelers aren't always looking for the cheapest priced option. Yes, price is important. But more important than that, they're looking for the right travel option for their needs that delivers the best possible experience. They want the right product for them at a fair price. They want their expectations met, and maybe a little surprise in the light along the way. Travelers don't want stress and the fear of making a mistake. And if things go wrong, they want us to solve their problems, not make it harder. So this simple realization led us to rethink our entire approach, how we make things great for travelers and great for all of you because we fundamentally believe that when travelers win, we all win. So today, we're going to focus on 3 core themes that we believe will drive traveler success and, in turn, success for all of you. As John Kim will shortly explain, we are now entirely focused on driving relentless innovation to deliver better traveler outcomes. We have a goal to create greater traveler confidence, to remove stress and fear from the process and to match the traveler with what's right for them. Sometimes that's the lowest priced room in a 2-star motel on a highway, and sometimes it's a suite in a 5-star hotel in Paris, sometimes it's a business class seat to L.A., and sometimes it's a discount airline seat to Buffalo. What we know for sure is that when customers get what they want, what they really need and expect, they win; and when they win, we all win. But great product alone can only get us so far. We also recognized that the industry wouldn't change if our marketplace was still rewarding cheap over everything else. So Ariane Gorin will share our bold new thinking on the future of our marketplace and how we seek to decommoditize the way it works, a market where we will no longer reward price overall else. This year, we will begin rebalancing our marketplace towards overall traveler experience and satisfaction, allowing partners who deliver great outcomes for travelers to be rewarded for that and be more successful because every time we bring you a traveler, we create an opportunity for you to have a customer for life. And when that traveler wins, you win. So having addressed the product and marketplace issues that were holding us back, we were left with one more piece of old thinking that we needed to let go of. We realized that we've all spent too much time and energy fighting over who owns the customer, making service harder, creating customer confusion and, frankly, holding back the potential of our partnerships. We now believe this is simply the wrong way of thinking. The truth is traveler need is a question of use case. Travelers have good reasons to come to you directly and other reasons to come to us. That's how the market works. So this final realization led us to the last piece of work in our reimagining of the travel ecosystem. As Rathi Murthy will discuss, we have committed to rearchitecting our technology platform so that our innovation will be available to all of you. We are deconstructing the building blocks of online travel so that the whole market in each of your businesses can utilize these capabilities. We realized if we purpose-built this platform to provide the underlying technology that would allow all of you to supercharge your own businesses, we could, in turn, help you power more successful traveler outcomes because we know when travelers win, we all win. And before you roll your eyes and say that sounds like a bumper sticker for the industry, let me tell you a recent story. I was on a trip a few weeks ago to see our teams in India and had a few extra days to see some sites. I spent a couple of days in Jaipur, which is really fascinating, if you haven't been. Though I'd recommend a different time of year, it was about 108 degrees when I was there. Regardless, I had a terrific guide. His name's Hitesh. He took me around all the amazing sites, including the Amber Fort pictured here, which is very cool, by the way, you should go. Anyway, Hitesh was very emotional and was very concerned about whether we were having a good time. And when I told him not to worry, everything was great, he said that they've had no foreign travelers for more than 2 years. He'd even thought about giving up being a guide, which he clearly loved. But that he knew if we had a good time, we'd go home, tell our friends, tell other people and more people would come to India, and thereby, he and his fellow guys and the entire hospitality industry will thrive. This one guy in India knew the power of this maxim, when travelers win, we all win, which brings me to the most important takeaway you should have today, if perhaps not our biggest innovation. We have a huge breadth and reach in our existing marketplace. Hundreds of millions of direct customers come to our brands, and hundreds of millions more come to you through our partners that we power. In fact, many of you here today bring customers to our marketplace as well as supply. So as vast as our reach is, everything we're talking about for the next hour or so is about to explore that reach. We will expand our universe, the universe into which you sell products in unprecedented ways. That is the future we are imagining with all of you. So with that, thank you again for joining us. We are also excited to have you here truly. Today, we open up our thinking, we open up our platform and we open up our world to all of you. And now John Kim to share some of the really exciting work going on as we focus on relentless innovation to drive traveler success.

My god, it's so good to see everybody, 2 years, I haven't seen you in a long time. Thank you, Peter. Technology is accelerating at a breathtaking pace. And every year, our experiences are getting better. But technology is only as good as how we design it for the people who use it. Now over the past 2 decades, we've been focusing on scale, especially transactions. We've given people a place to find millions of great prices. Now is the time to expand our focus to not only focus on prices, but to ensure that our trips have great outcomes as well. Now during the pandemic, we went back to the core of what's most important, the whole experience for travelers. We have fundamentally shifted how we leverage our data, engineering and scale to design the best possible outcomes for our travelers. You'll start to see us focus on personalization across every single product line and across every phase of the journey, and how every one in this room can work together to accomplish better experiences because as Peter said, when the traveler wins, we all win. Today, we're going to show you our travel side priorities across trip planning, shopping and booking, all with the goal to connect travelers with the information they need when they need it, helping them reducing anxiety across the entire trip and giving them the confidence that they've made the right choices. And as the world reconvenes and travelers are hungry to explore again, this is the perfect time to make those changes. First of all, I'd like to invite up on stage Maud Larpent to talk about reducing the complexity of family and group travel.

Thanks, John. We all know that trip planning can be stressful. It's already a big task when you're traveling by yourself, but it can be especially so when you're planning with friends and family. There's so many different perspectives and opinions. I'm actually feeling the pain of this right now as I'm planning a trip to New York with my family in a few months, that's with my parents, my brother, my nieces, my sister, her partner, where should we stay, where should we go, what places should we visit when we're there? I can tell you that my stress levels from being the primary planner for this trip are pretty high. I know I'll need to take into account everyone's budget, show them some options, keep an eye on availability, and there isn't a single great way to keep track of all it right now. As a matter of fact, we know that travelers like me use a mix of tools to work through the details of their trips: spreadsheets, email, texting, even note plans. It does take a lot to talk orchestrate a great trip. These are the common problems that the Vrbo team has identified and they have been focused on addressing those for years now. And today, with Trip Boards and Vrbo, you can easily shortlist vacation rentals, collaborate into your family and your friends using votes, comments and even polling to facilitate decision-making. And we can see in the numbers that this is truly useful to travelers. Today, 1 in 3 trips on Vrbo originate from Trip Boards. And travelers who use Trip Boards to plan their trip are 5x more likely to book and 7x more likely to repeat. And now we're bringing all of those earnings across all of our major brands, across all product lines. Just imagine how powerful an experience it can be. Well, let me introduce you to Trip Boards. We're creating one place where travelers can plan, collaborate and truly enjoy their whole trip. So let's see what planning that trip to New York with my family might look like now. As I open up the app and enter our travel details, I can see that the kids-friendly hotel that my friends recommended still has availability. That's cool. I want to save it for later so I'm going to tap the heart icon and add it to the New York Trip Board that I started a few days ago. There, I'm keeping track of a few other places that meet my parents' budget as well as a few activities that I think will be fun to do as a family while we're there. Cool. I think I've got a good few options there, and now might be a good time to see what my family thinks of them. So I'm going to invite them to my Trip Board so that they can see all the places that I've shortlisted. Almost immediately, my niece is adding another property for us to look at. And a few comments and likes later, we seem to have a consensus. Wow, that sounds so much easier, right? I was able to do all of this in one place. And as the main planner, that was fun, not stressful. With Trip Boards, you can save items, book items and continuously build your trip with the confidence around your choices and the knowledge that Expedia has got your back. Trip Boards launches this summer on Expedia with additional collaboration features later in the year, which will radically simplify how travelers make their trip decision. And now I'd like to introduce you to Michael Gulmann, who will talk to us about shopping.

Thank you, Maud. Very exciting. Well, you all just saw how Trip Boards are going to help travelers plan their trips with others. Now let's take a look at the travel product selection process. You, our travel partners, give us millions of rates and fares. And frankly, we know that you want us to bring you more than just the lowest room rate and the basic economy fare. But the problem is customers don't always know what they're buying. As travelers, we're all looking to find the best value when we're trying to find a place to stay, not just the best price, but the best overall experience. There just hasn't been a simple and smart way for travelers to compare room rates and understand the benefits of each choice. The problem for travelers is that they have to read through every single room description to understand what's included. And as a result, we see that they picked the simplest choice, often the cheapest price. Then too often, travelers are surprised when they realize they booked a nonrefundable room or when they shop to the room and realize it doesn't include parking or have the view they expected. Well, in hotels, we're solving that problem. Introducing Smart Shopping. We built technology and intelligence to read for those millions of rate descriptions, to pull out and organize all the attributes and benefits of every single room rate. Travelers get easier comparison with an increase in transparency control. And by better matching customers to what they want, we're seeing customers shift to premium products. This new experience let's travelers clearly see each room type and pick the things that matter to them. Well, let me give you an example. So often, a traveler has to compare and pick from dozens of room rates. And the only difference could be refundability or whether or not it includes high-speed Internet. Now we've restructured the display for easier comparison, allowing travelers to pick the things that they value, like a room with breakfast. It gives the customer control, clearly shows the prices, price differences in a single view. In addition, the Smart Shopping experience makes recommendations for you based on what we know about you as a traveler and the trip you're planning. In this case, suggesting for me a superior room. Smart shopping is live today for hotels and coming soon for flights. And we're rolling it -- as we're rolling it out for hotels, we see that it's really working. We've seen a 6% increase in travelers booking premium room rates and customer satisfaction is up as well. By better matching the right offer to the right traveler, we're shifting the focus from what's the cheapest to what's best. The traveler is winning, and you, our hotel partners, are also winning. Now I'd like to introduce Rachel Kobetz, who's going to share one of our most exciting innovations.

Thank you, Michael. We are so excited that people are traveling again. And we're starting to see a real increase in people coming to shop for their next trip. When we're planning that next trip, a lot of us start with flights. And we've all been in that situation. You're checking out flight options, but you're unsure of when to buy. The prices keep changing, but you never know quite when to book. You don't have real confidence in making the purchase, and it's a little bit stressful. Historically, the industry has shown prices and availability as a snapshot of just one moment in time, giving travelers flight results without any context of what may happen in the future. That changes today. Introducing price tracking and predictions. Price Tracking and Predictions removes the stress of searching for flights and gives travelers the confidence to know when to buy. It maps past trends and future predictions and sends alerts to keep travelers informed so they can book with confidence and feel great about their purchase, which means more bookings for you. So let's take a look at Price Tracking and Predictions in action. I'm interested in flight prices for our New York trip. And since we just booked our hotel, Expedia has already suggested some flights to help us get there. Here's the current lowest price, and Expedia thinks it's only up from here. But the price trends have really been up and down over the past few weeks. And a better price would be great, but I don't want to have to keep coming back and checking every few days. So let's start on tracking, and let Expedia do the heavy lifting. Wow, even cooler that my preference for business class goes along with it. A few days later, I get a notification that prices are going up. Expedia still thinks this is the best price we'll see. With trend data and a view of where prices may head next, I'm going to lock in the slide. Having the right information at my fingertips, I am confident I made a great choice. Now Expedia is uniquely equipped to do this. Travelers search for and book more flights on Expedia than on any other OTA. We can take 100 million searches a day, 8-plus years of historical trends and give travelers the confidence to book. Price Tracking and Prediction is available today for flights with hotels later this year. It's just the beginning of something much, much bigger, a truly personalized experience. Now we hope what we've shown you is inspiring, but there's more to come. These innovations set the foundation of where we're heading next. Relentless innovation to create best-in-class experiences for travelers is what drives us on our mission to power global travel for everyone everywhere. Our next generation brings our expertise and data together to provide a personalized experience that's with travelers throughout their journey. It's an experience that connects travelers with what they need, when they need it, understand their preferences, their history and their context, an experience with a stunning new design that gets better the more travelers interact with it. What will this look like? Let me show you. [Presentation]

Wow, I'm so energized about what we've shared here today. To recap, we're introducing Trip Boards to reduce the complexity of group and family travel, Smart Shopping to give travelers exactly what they want, Price Tracking and Predictions to reduce the uncertainty of when to book. Now these are not just new features. They're features built with a different mindset, designed to give travelers much better outcomes. Collectively, these features promise way more traveler success, which leads to much more partner success. And we think that's a great package along with incremental bookings and more premium demand. Now we share a preview of what we're planning, but this is just the beginning. We're building an engine that will relentlessly continue what we started from today here at EXPLORE and into the future. It's all about the entire traveler experience from discovery to planning to booking and in trip. Now I'd like to introduce Ariane Gorin to talk about and share our bold new approach towards a better marketplace.

Thanks, John. Those were such exciting new traveler experiences, from planning, to shopping, to booking. But once the traveler's trip starts, their experience comes down to all of you in this room; the homeowners who open their homes and make personalized touches, the hoteliers who welcome guests with a smile on their faces, the airlines who make sure that passengers arrive safely to their destinations, the car rental companies who find the perfect car for a traveler's road trip, the technology companies who make sure that connectivity works so that travelers can actually book what they see, and all the other companies who contribute to making traveler dreams come true for their customers. As leaders in our industry, all of us in this room like to solve problems. And in our industry, there are plenty of challenges to tackle. In the past couple of years, we've been tested; change in travel restrictions, credits, refunds, schedule changing, staffing shortages, issues we never imagined and we didn't have the infrastructure to deal with. When we get it right, we delight travelers, and we all win. But when we get it wrong, it's a terrible traveler experience, and we all lose. Together in the last year, despite the lingering challenges of the pandemic, we've delivered over 365 million stays and over 92 billion miles traveled. And with this, we've created amazing moments of delight. So thank you for everything you do for travelers all around the world. Together, we truly make the magic of travel happen. Now one question I often get from partners is, "How can I get more demand from Expedia Group?" Last summer, Peter and I were talking to a hotelier in Madrid right at the time the travel was picking up again. He asked us what he could do beyond providing great content, rates and availability to really make his hotels stand out. Our answer was simple, treat our travelers well, delight them on property, make their check-in experience excellent. And if problems do come up, then fix them quickly. And that's when we realized, our marketplace, our algorithms don't actually do enough of this, driving more demand to partners who put traveler experience first and deliver on what they promised when the traveler book their trip. We've spent the last few months reimagining the ideal booking experience, talking to travelers to understand what matters most to them, reexamining the experience we provide today and then pressure testing our solution with many of you, our partners. Today, I'm so happy to share that we're completely redesigning our marketplace to fit traveler experience at its core because we all know the travelers who have great experiences spend more, review more and travel more, and that's good for all of us. Let's hear from Clayton Nelson on how we're going to do this.

It's a long walk. Thanks, Ariane. Every signal on a traveler's experience is valuable, from guest reviews to in-state feedback, to call propensity, relocations, posts on social media, virtual agent chats, service interactions over the phone. At Expedia Group, we have an unparalleled amount of data on traveler experiences. And today, we're introducing a way of making all of that data work for you and for our travelers. Introducing the Guest Experience Score. We are bringing together all the data signals we have, adding richness and insights beyond just traveler reviews to paint the clearest and most accurate picture of what experience guests can expect when they arrive in your hotel. Our goal is to build trust with travelers. We want more travelers to have great experiences, and we want to make sure that you get credit for the great experiences that you deliver. I'll share more about how this will work by showing a few designs we're testing. Now this score, the Guest Experience Score, is the foundation of our new marketplace. We'll display the Guest Experience Score to travelers so they have a clear understanding of what they can expect when they arrive at your property. It will also give more visibility across our marketplace to properties with higher guest experience scores. That means that they'll show up higher in sort and more frequently in our merchandising and campaigns. It's a big change. Until now, sort and visibility have been mostly dictated by availability and price. And so we're so excited to add Guest Experience as a powerful new driver within that mix. So if you're a hotel, providing great experiences to travelers, you will get credit for it as travelers decide where to stay. Now to help all of you deliver these great experiences in Partner Central, we're going to provide you with data on the guest experience at your properties with intuitive and transparent score and on the factors that are within your control. We'll also show you how your property and your experience compares to other properties and other experiences. And we're going to make it actionable by providing with the insights you need to improve and recommendations on where to focus based on what we know matters most to travelers. And as a sneak peek, for those of you that deliver the best guest experiences, you'll also have access to an exclusive program launching later this year. Hotels in this program will get additional benefits, including more visibility, new tools, greater access to our high-value loyalty members, skip the line support and so much more. It's dead silent in here because this is a big change. And we want you to have the opportunity to understand how this works before it's out in the world. So we're making the Guest Experience Score available in Partner Central today. And we will wait until later this summer to share the score with travelers and embed it in a sort for our brands. So that will give each of you the opportunity to understand and improve your scores before travelers begin engaging with them. Now all of these changes will begin with our hotel partners, but we plan on adding other partner types in the months to come. I can't say it enough. We're truly excited for what this means for all of you in this room that deliver great experiences for our partnership together and, most of all, for travelers. Back to Ariane.

Thanks, Clayton. So I have to say this is a long stage to walk on. And it's been 2 years in COVID that I haven't worked -- walked in high heels on a stage, so I was ready just in case right now. Anyway, thanks, Clayton. Now you're probably all thinking, wait a minute, there are a lot of things that are out of my control, like extreme weather events or changing travel restrictions. There are always going to be things that are out of our hands, but it's about how we react to these and how we solve these challenges together. I know there are many of you in this room who have gone to great lengths to preserve the traveler experience in the face of some of the hardest challenges. And we want to help travelers know that and see that when they're booking their trip for you to get credit for your commitment to traveler experience. You might also be thinking, does this mean that only high-end, 5-star hotels are going to get demand? No, of course, not. Travelers search for the right experience at all price points at all levels of star rating. And as John Kim showed earlier, we're building tools to give travelers the confidence to book what's right for them. And that includes the new guest experience score. As long as you're meeting traveler expectations, you'll do well in our marketplace. We know that if you give a traveler a great experience, they'll come back to your business. But when a traveler has a bad outcome, it reflects on all of us. None of us alone is responsible for every step in a traveler's journey. And for too long, we've allowed poor traveler experiences to persist because we haven't partnered well enough to understand and really solve problems. When we work together with a common goal of great traveler experience, when we have the right data and when our teams have a partnership mindset, we can create satisfied and happy travelers, no matter what the world throws at us. Another key part of our partnership promise to all of you is to bring you valuable travel demand. And I'm thrilled to introduce Jon Gieselman, my colleague, to share what we're doing for all of you on behalf of our brands.

Thanks, Ariane. Our Expedia Group brands have tremendous reach and awareness. As Barry said earlier, it's the result of 25-plus years of material investment. We connect with hundreds of millions of travelers each and every month. And in the last decade, we delivered well over 1 billion trips, all those travelers, all those trips discovering your products. That's great. But to some degree, our brands have actually competed with one another in the past. Travelers don't understand that we're actually a family of brands. Frankly, we've never tried to make that connection before. But that connection is actually our superpower. This past Super Bowl, we began to relaunch all of our brands around the world with new creative and messaging that differentiates us in the market and begins to pull the brands together in a way that actually makes sense to customers. We'll continue to do this in countless ways across all of our marketing, but one of the most significant changes that's coming is in the area of loyalty. Today, our loyalty programs have 154 million members. And every month, we add about 2 million new members to that count. And to put that into perspective, if you added up all of our rewards members, we'd actually be the ninth largest country in the world by population. It's not only incredible, it's a pretty amazing opportunity. But that's across 4 different programs, each with different currencies, different benefits, different rewards mechanics. And then to add to the complexity, some of our brands don't even have loyalty programs, like Vrbo and Travelocity. All of this is confusing, it's limiting and it's not in the best interest of travelers at all. We spend hundreds and hundreds of millions of dollars each year in loyalty rewards to drive incremental bookings to all of you. No one else in the industry does that. But we have to make all of this even simpler, even easier for travelers to enjoy their rewards and do it all in one place. So today, we're announcing One Key, One Key. One Key is the one place where all of our travelers will soon earn and redeem their rewards across all of our brands, across all of our products. For example, travelers will earn rewards on Vrbo that could later be used for a flight on Expedia. You book to stay in Hotels.com, great. Soon you can use those points for a dream stay in a Vrbo or even another hotel. The whole point is it will be up to the traveler to decide. You may not know this, but our gold loyalty customers today booked 15x more than a non-loyalty customer. That is precisely why we want to make it even easier for our customers to enjoy their rewards so they book again and again on your properties and premium products. Frankly, all of this will supercharge revenue and additional bookings for all of you. So with all the innovation that John Kim shared with you and Ariane's marketplace redesign that will work on behalf of all travelers, brands and a loyalty construct that are unmatched in the industry, we're going to deliver far more travelers to you, for you to then turn into lifelong customers. Billions of travelers a year, all looking for the perfect flight, car, experience and an amazing place to stay. I've got one more thing. I'd like to share some of our new creative with you. But instead of me setting it up, let's hear from somebody who shares our passion for travel and appreciates memories over things.

Thank you, Jon, and hello, everyone. Travel is a really big part of my life. And in fact, some of my greatest memories have happened while I've been out there traveling. And it's these experiences that have the power to open minds and changes all for the better. And it's you all that are helping to make those experiences possible, which is amazing. For the Super Bowl, we talked about these experiences and how they are more valuable than things. And now Expedia's new campaign goes beyond just talking about them and starts giving glimpses of some of the incredible travel experiences waiting for us out there. Here's a sneak peek of the work. [Presentation]

Thank you, Ewan. He's actually in the midst of promoting a little show. You may have heard about it. If you haven't, watch Kimmel tonight. So this week, we caught up with him in one of our Vrbos, and we got a fun conversation to share with you tomorrow, so we're going to do that. But we're so excited by where we are and where our brands are headed and everything else that we've shared with you today to help drive your businesses. So now I'd like to hand it off to Cheryl Miller to talk about the hundreds of millions of additional customers we reach through our partners and many of you. Thank you.

Thank you, John. I had to get a head start since Ariane wanted to talk about heels. One thing that is clear to me, there is a huge opportunity for all of us. But let me ask you this. Are you getting everything you need to be successful? Are you taking advantage of everything that Expedia Group has to offer? We're here to help. And I'm hoping that I can inspire you and provide some examples of how we can succeed together. Bringing you traveler demand is paramount to us. Most people know us for our consumer brands. But what you may not know is that by working with Expedia Group, you also benefit from our tremendous global partner network. Travelers buy from many places. They pick up the phone and call a travel agent. They book online using rewards from their bank or their credit card or from their membership programs. They book through their company's travel management provider. In emerging markets, they may book from a national champion online travel agent, who understands their individual local needs. And this is why partnerships are so important. We connect the supply that fuels our marketplace to harder-to-reach markets and travelers. Using your existing connections to Expedia Group with no extra work, we provide you access to a powerful ecosystem that allows any one of you in this room to expand your reach to these unique pockets of travelers. For the past few years, in the background of our consumer business, we have built a massive B2B ecosystem, reaching over 50,000 incremental partners driving additional demand for you. We power tens of thousands of offline travel agents and the biggest corporate travel agencies of the world. We power hotel programs for some of the largest airlines in the U.S., along with regional online travel agents and some of the biggest financial institutions. Back in 2014, we signed a distribution deal with a small start-up in Indonesia, Traveloka. They've now become one of the leading online travel agencies and are known as Southeast Asia's lifestyle super app. As they've grown, many of you in this room have welcomed their travelers through your partnership with Expedia Group. Let's take a look at Traveloka's success. [Presentation]

This connection of supply and demand through our marketplaces and partnerships create a unique ecosystem for each of you to tap into. I'd like to show you an example from a boutique hotel in the U.S., Tabard Inn, where we've helped them scale and grow, so you can imagine how this might work for you. [Presentation]

As we've grown our partnerships and invested more and more in technology and solutions for all of you, we realized we can help solve some of the thorniest issues that are facing our industry. Back at our 2019 conference, we unveiled optimized distribution in a landmark deal with Marriott. Let's hear from them how we've helped solve some of their biggest challenges. [Presentation]

This is just one example of how we're powering the travel industry. Optimized distribution provides expanded reach while protecting your wholesale rates and content and driving your direct business. In the past few years, we've managed to help many more hotel partners, including another one of the biggest hotel companies, IHG. Let's hear from them how we're enabling their growth. [Presentation]

This is what we mean by expanding opportunity for all of us. It's amazing to see how optimized distribution is improving hotel sales and more generally, how we're helping many of you succeed in the universe of travel. We have learned that our most successful partnerships are the result of each of us focusing on what we do best. As Rathi will explain, we want to nourish this ecosystem, helping every one of us to thrive, doing what we do best, delighting travelers, creating connections. This is just the beginning. I'd like to welcome Rathi Murthy to talk about our next frontier.

Thank you, Cheryl. I'm so happy to be here and share how technology will and can deliver for all of you. It's really amazing how far we have come as a company to be able to deliver all these technology solutions for our partners. Let's hear from one of our partners, who is utilizing our technology for their needs today. [Presentation]

What an incredible example of a great partner in AARP, taking advantage of our complete technology solution, everything, including search, sort, to content, to service, all the traditional building blocks of an OTA. Now we could only do this for our larger scale partners because of all the complexity involved. So we spent the last 2 years reimagining what a purpose-built platform could be that would serve any size partner and be simple to use. So looking at this solution, we use to power our large partner, like AARP, we found a game-changing new way for more to take advantage of our technology. We are now deconstructing the building blocks of online travel, like commerce, conversations and service. We're creating a platform unlike anything else in the industry that will open new revenue opportunities for every one in the room, and in fact everyone outside of it, a solution tailor fit to your needs. Consider this, if you're an airline and you want to offer cars to your travelers, we will have the building blocks for you; or if you're a hotelier and you just want payments and service, here are those building blocks; or let's say, you're a surf shop and you want to offer online travel to help people book amazing surf vacations, we will provide all the building blocks to create a complete travel store. No matter what, we will be opening the entire e-commerce suite for you. Everything will be available in configurable ways to suit the specific needs of your business all in a flexible, quick and self-service-enabled manner. Now I would like to officially welcome you to the Open World. With the introduction of the Open World platform today, every one, from TikTok influencers to travel and tourism boards to developers, will be able to access Expedia Group technology, bringing millions more into the travel ecosystem and expanding reach and demand to entirely new levels for all of you. This is a purpose-built platform where any size partner will be able to leverage and configure the products and services they need to participate and win in travel. As we are simplifying and accelerating our core technology to build this platform, we are focusing on many of your pain points all so we can easily deliver these building blocks all in one place. And we're doing this because we want you to succeed. We want your travelers to be happy, and we want you to be able to expand your own business. While we were on our journey rearchitecting our platform for Open World, one of the key building blocks we wanted to improve was around service for travelers, an issue we all face. Pre-pandemic, we had virtual conversation capabilities that could handle many interactions. When the pandemic hit, the sheer volume in service requests hit a level nobody anticipated. And while this was a challenge for all of us, we saw an opportunity to accelerate our growth in this technology and rebuild it in a way that now powers more than 29 million virtual conversations, saving more than 8 million hours in real service time with an agent. And what's exciting is that today, many of our enterprise partners already benefit from this service. And now with Open World, any partner will be able to access this technology to help be more efficient and take care of our travelers with greater ease so they can prioritize other efforts. Here's Marc Silbey to show us this technology in action.

Thank you, Rathi. Thank you. I hope you are all as excited about Open World as I am. As Rathi said, let's look at our conversation platform as an example. When we spoke with travelers and partners and agents, we realize the communication preferences were changing. Most travelers don't want to pick up the phone, possibly being put on hold, only to talk with a human to get help. I think we've probably all experienced this. Travelers want the tools and information to help themselves, and they expect to get help immediately. They want to communicate on other channels, like chat and social, and not be held captive over the phone, as you know. We looked at the market for solutions and really, there was nothing tailor made for the travel industry. So we set out to build these new capabilities and channels ourselves. We built a virtual agent platform to help travelers self-serve. Over the last 2 years, teams across Expedia have built hundreds and hundreds of skills. For example, travelers can easily look up amenities, like the pool, which you'll see here in just a minute. Behind the scenes, there's a robust architecture that leverages our data and our AI, and it gets smarter and smarter with every interaction. It knows who travelers are, and it can predict what they need next, offering personalized suggestions. We also built capabilities that allowed travelers and supply partners, like many of you in this room, to communicate directly together without bringing in an Expedia agent. We've come a long way, and the virtual agent can do some pretty amazing things. Michael showed you Smart Shopping, and we're building on that. We're enabling travelers to use their voice to guide the experience, travelers can say a whole paragraph and we understand it. [Presentation]

And so what you see here is that the virtual agent understands what she just said, and now it's confirming it with her. It collects a little bit more information that it didn't get. It heard her say family, so it's asking how many adults and how many children. It heard her say beach, so it's showing her recommended beach spots. And the virtual agent also picked out filters, like spa. So you see that pretty selective here. Now it's summarizing it for her, and it's going to take her directly to the search results. Travelers have absolutely loved it. Over 60% of travelers are self-serving in the chat channel today. And we've saved over 40% in variable agent costs. It is simply a faster, better, more efficient solution. And given this success, we've expanded to other business segments and partners. Egencia now has a virtual agent for corporate travelers, and Partner Central also has a virtual agent for supply partners. These are the types of foundational building blocks that we want to make available to all of you through our platform, Open World. All partners will be able to come onboard and take advantage of self-service skills or even build their own for their own unique needs. And now back to Rathi.

Thank you, Marc. The virtual agent is one great example of hundreds of platform products all of you will have at your fingertips in the future. At the heart of Open World is our ability to use data, AI, ML and all our tech capabilities to drive better traveler outcomes. Today, we process more than 600 billion AI predictions a year, powered by more than 70 petabytes of data. So every moment someone interacts, our responses are becoming smarter and more personalized. Processing speed also matters. Every second, we price more than 4 million hotel days. So in the time I just spent sharing that stat, we priced more than 28 million hotel days for travelers. In other words, the capabilities we are opening up to you are getting smarter every day for your benefit and ultimately for the traveler. Just to give you one more specific example today and a sense of how we can provide the right technology to optimize your business, let's take the shopping experience. We have tested our shopping experience for years with human intelligence in an effort to personalize the experience. Today, we are doing it with the power of our immense AI and ML capabilities and can now evaluate more than 600 and -- 360,000 permutations of a page on one of our brand sites, meaning travelers see what is most relevant to them. This is just the beginning. Just as we democratized online travel 25 years ago, we are now democratizing the business of travel. This means all of you and more will be able to use our technology as you wish, so you can focus on your own areas of expertise, creating more successful experiences for travelers. Our commitment to you today is this, we will open our world to you. And as the Open World platform evolves, the benefits compound and the universe of travel expands. It ultimately leads to more travelers coming to you, more places to reach travelers and an increased growth for all. At its most mature, the Open World becomes a place where developers, data scientists, marketers and others can come and create new channels of commerce. And with that, it is my great pleasure to hand it back to Peter for some final thoughts.

Thank you, Rathi. Thanks to our amazing team today and our partners who presented with us. And thanks to all of our Expedia team who made all this work happen. So no big deal, right? All we did was completely change everything. We completely changed our thinking around what we were solving for travelers and how to do it. We changed the marketplace, the construct, so it would feed the flywheel of more traveler success and, in turn, more travel. And then we completely rearchitected our platform so that we will be able to externalize all of our capabilities to all of our partners. And this is really just the beginning. There is so much more to come. But before I leave you, I want to be clear about what we believe and how it has led us here. We believe there's nothing more important to our collective success than traveler success. We believe the market should reward partners who deliver that traveler success. We believe we should all be open to working together to simplify our processes to take the stress out of the travel experience. We believe that every traveler we bring to you is a chance to build yourselves a long-term loyal customer. And that for every traveler who comes directly to you, we can help you serve them better and more efficiently so that you can put more value back into their travel experience and build your businesses. And ultimately, that by opening our world to the entire travel market and by extending the power of our platform to each of you and millions of partners around the world, together, we will enjoy unprecedented reach and success. So today, we welcome all of you to the Open World platform, the platform that will drive the next decade of growth for all of us, bring capabilities never before thought possible to both our largest and smallest partners, and ultimately help us all build a thriving travel ecosystem that does what we are mission-driven to do, create joy for travelers. So thank you again for all being here. Thanks to all our teams that did the hard work to make this event possible. And we hope, like us, you will come away from this week with renewed energy and enthusiasm for what lies ahead. And with that, have a great EXPLORE. Thank you.