Expedia Group, Inc. ($EXPE)

Started. I'm Mark Mahaney, part of the Internet equity research team at Evercore ISI. I was telling Aryan. I gave a commencement address this weekend and I mentioned the AI and then I had to deal with hecklers -- and so I lost my voice shotting up, shouting over everybody the next 30 minutes. It was good to be here, and it's good to have you here, Ariane. This is, I think, your first public investor forum or conference

Second.

This is your first.

It was my first with you.

This is your first public investor conference. I'm glad you decided to do your first one with Evercore. So thank you.

Two years is on the job now.

That's right. That's right. Yes, we've had a -- we've been relatively bullish. And last year, you were one of our top picks -- and we don't -- we -- I've covered Expedia since -- actually since the IPO. And we've had a lot of management turnover at the company a lot and that hasn't been necessarily a great thing. But we may -- they're made for investors or maybe something much more investable now. I think there is. So I want you to talk about that. So I'm going to -- we're going to go through a series of questions. And if anybody wants to jump in with questions in the end, please do. So you've been there for 2 years now. You've talked about these 3 strategic pillars just to explain that to us. And you're pretty far into a turnaround. It's a relaunch and student set of turnarounds to relaunch. Let's talk about the relaunch of Expedia and what you've been able to do so far and what you want to do for the next 2 years?

SP619389981 Sure. Well, first of all, thank you for inviting me. As you said, I've been 2 years now in the role. And when I stepped in, I really said to the team, look, we need to simplify it. We need to focus and we need to execute with discipline we had come out of a platform transformation. And we were in a position where the consumer business wasn't growing the way we wanted it to. The B2B business was growing well, and it was a matter of how do you sustain that and how do you continue that growth. And so we came to 3 pillars. The first is create more traveler value because if you're in a consumer business, the most important thing is what is the value you're creating for your customers. The second one wasing where we see the biggest opportunities for growth. And the third was expanding margins. So let me talk about each one and sort of what we've done and what is still ahead. So on the topic of driving more traveler value, our consumer business has 3 big brands, Expedia, Hotels.com and [ Vrbo. ] And we started by sharpening the value propositions for each of them. So Expedia is the one-stop shop where you can bundle and save, get great deals. There's a strong loyalty program, and it's really the 1 place you go to go places. [ Vrbo ] is the trusted pure-play vacation rental marketplace and Hotels.com is the hotel pure play with a great loyalty program. So it was strengthen those value propositions and then market them well, build products that support them and have great supply. On the product, when you look at the work we've done in Expedia, it's driving up the attach rates. It's personalizing the product more. It goes from basic things like better uptime, site speed, checkout paths, kind of all of the e-commerce basics to things like driving the attach rate, driving more trust in Vrbo so trust is really important in the vacation rentals category. So making sure that with Verbocare, people trust that when they're in trip, they're going to get what they were expecting to. And then, of course, supply, ultimately, people want great assortment in prices. We've done a lot of work in our loyalty program to have better member deals. But if you take Vrbo, for example, until about a year ago, we didn't have a ton of promotions. And so last year, we ran -- we rolled out a [indiscernible] promotion suite. And in the first quarter, over 30% of our bookings were on partner-driven promotions. So there was a lot of work in driving traveler value. And what is ahead, and this is probably the #1 thing I'm most excited about is I really believe that using AI in our product is how we are going to be able to be true personalized and trusted travel agents for people. I'm sure we'll get into that later. But that's on that first pillar around traveler value. It's a lot about what are we going to do in AI and the product to make people want to keep on coming back to us directly. And whether it's for inspiration all the way down to booking and servicing. The second pillar is around investing in the fastest growth drivers or where we have the biggest opportunities. has been -- I think we've had 18 quarters in a row of healthy double-digit growth, and we're continuing to invest to expand that. So we're a leader in B2B. We've got great partner relationships -- and we've been expanding the offerings that we have. So not just hotel and vacation rental, but what are the other lines of business like hotels or activities that we can provide to our partners for them to build out their travel programs. Also growth outside of North America because that's a place where our share isn't as high as it is in North America. And so with our consumer business, having real focus on specific markets to say how can we grow there. Now our B2B business is bigger outside of North America, but we've really had a focused strategy for consumer -- and when I think about what's to come in that area of investing for growth, as I mentioned in B2B, we're growing these non-lodging lines of business. You may have seen in the last 6 months, we've done an acquisition and activity, a small acquisition in car rental that we announced last week. And it's really about expanding the offering that we can provide to the partners we have and then adding the partners. And then in international, again, that's a big opportunity for us because we underpunching our weight. And then the third pillar was about driving more productivity across the organization and expanding margins, which are 2 sort of sides of the 2 sides of the same coin. If you look in the last couple of years, in '24, I believe that we expanded margins by about 50 basis points last year by over 240. This year, our guide is $100 million to $130 million. And that really reflects the work we're doing across the P&L from how do you drive more revenue? How do you get more efficient on your cost of sales, how do we drive leverage in marketing and in overheads. And our management team is very committed to looking down the P&L and finding ways to drive more productivity while we're investing in the attractive things that I talked about earlier.

Okay. That's you covered quite a lot. Let's dig into a few of those. I want to start with B2B because that's, I guess, the most consistently impressive growth that you've been able to string together. And so just talk again about the sustainability of that growth. I guess it's going into the nonlodging lines of business and international expansion. But maybe a little bit more on how you sustain that for another 18 quarters.

So yes, I would say, one, the way to think about B2B is the travel industry is over $3 trillion -- and if you look at our consumer business, last year it was $85 billion. So there's a big gap there. And then half of that is supplier direct or a couple of other big OTA so there's still a huge amount of travel that happens in the world that our B2B business can go power. And we think of it as how do you grow wallet share within our existing partners -- so it can be from adding new lines of business. It can be if our own partners are moving into new geographies or they're developing ideas to grow their business, how do we participate in that. It can be adding new customers. So we may talk about -- we saw the deal with Uber recently. We signed a deal with Bank of Montreal and Canada. So we're constantly going and looking at new businesses we can sign. And then it's just in general, what is all of the value that we can add to these B2B partners in various ways.

And then I guess the core Expedia business, that seems to have required the least management attention lease turnaround. Is that right?

Maybe it's externally that it seems like that Look, I would say for all 3 of our big brands, the challenge and opportunity has been to take the work that was done in a lot of our replatforming, which was building these platform capabilities and then bring them to bear in a way that makes sense for each of the brands. Now Expedia has such an amazing value proposition. There's 1 place you go to go places, bundle and save, package deals, loyalty program. So maybe it seems like it required the lease management attention because maybe how we talk about it, but it's got such a great existing customer business, a great value proposition. But it's been amazing to see the work the team has done with better recommendations, with driving better attach, having travelers better understand the value proposition around packaging. A lot of work has gone into servicing. I think for those of us in the industry, we all know that certain lines of business have more complexity in service requirements than others because Brand Expedia cuts across all of them. We've done a lot of work in Expedia on servicing across our consumer businesses, we have over 30% of service at self-serve, but then when someone does need to call us, how do we make sure they're short wait times, we're able to resolve things quickly because that also is then a driver of people repeating more directly.

And then let's talk about Vrbo. That seems to have been -- and this is from externally, but it seems to be that's the 1 that you've most recently been able to kind of turn around, get back into growth. I think you talked about $1 billion run rate now. So what have been some of the drivers behind the recovery to modest growth in Vrbo? And how much better can you get that business

Yes. So one thing is when I talked in the last earnings call about $1 billion run rate it was vacation rentals on Brand Expedia. So we think about vacation rentals as a category. We can distribute it on Vrbo. We can distribute vacation rentals on Expedia or Hotels.com or through our B2B business. And one of the important things we did last year is we were building out Expedia is really the one-stop shop where you could get everything was to better tune the way that we surface vacation rentals. So that's where we're very proud that we got to $1 billion annual run rate. When it comes to Vrbo, the brand, which is a pure-play vacation rental play, it has been a combination of things that have allowed it to get to growth that we're pleased with. One is the work I talked about earlier on supply. So we -- having more promotions, whether it's early bird promotions, long-stay promotions, member deals, if you are a blue silver or gold member. So obviously, making sure we have competitive and great pricing. There's been a lot of work around trust. So what our research shows is that 70% of people when they're looking at a vacation rental are concerned about is what I see actually going to be what I get. It's a bit different from when you're looking at a hotel where you may have more large brands. So we've done work around trust. It's how to make sure that people can trust that what they're seeing and the listing is what they'll get. And then when they get to the property that their experience is going to be what they expected. We launched a guest favorite badge. We increased the threshold for sort of our preferred, our premier hosts and our premier properties. We relaunched VrboCare. So Vrbocare is our proposition that basically says if something goes wrong in your stay or before this day, we'll take care of you. So all of these things together that drive trust in the traveler. You need to have the assortment, but you also need to have the trust. And then there's all the work in the product of just speed, uptime, better content, easier checkout and all of the myriad things that any e-commerce company would do. And then the cherry on the cake, and this is 1 of my favorites is that we rolled out something called Weather promise. And weather promises Basically, it's an offering where if it rains over a certain number of days during your holiday, you're going to get your money back. And so as we're helping people not only make sure that they're going to get what expected when they're in trip but also given the ability to purchase something that will be an added protection.

It was clever. I didn't know about that. All right. I want to ask you a couple of questions about AI, but you mentioned already the Uber deal. So let's just touch on that briefly. The potential impact of the Uber deal and why you decided to do the deal with them?

Yes. So first, I'll start by saying what I had said earlier, which is the size of the overall travel market is massive. And our consumer business is $85 billion, where there's a whole lot of travel that happens outside our consumer business. And this is where our B2B business comes in. And the great thing is the more demand we bring through B2B, the more value we bring to our supply partners. So in 1 connection, they get access to our demand through our consumer brands as well as through our B2B business. So when we sign a partner like Uber, obviously, it gives us some incremental volume, but it also really helps our value proposition to the supply partners. So when Uber decided that they wanted to add hotels to their app, they like any company went out and talked to a number of players. And we won the deal. I believe we won because we have a strong value proposition on our supply, on our technology, on our servicing, I mean, it's really -- it's the full value proposition. And years ago, we had -- we would have all these internal debates about, well, is B2B incremental or not. And I just keep on going back to the size of the overall market. .

Okay. All right. Well, let's touch on a topic that I know you haven't had much exposure to AI. The big -- 1 of the 2 biggest overhangs on the stock and I think it's a very thoughtful overhang on the stock. What happens to the OTAs, particularly to you and booking as Agentic Commerce rolls out, and hopefully, it'll be a lot more developed than it is today. But just talk about this as a channel for you. How do you think about this risk? How do you think investors should think about the AI risk or opportunity to Expedia?

Yes. So I think about AI for us really in 3 ways. One is what can we do with AI in our product to make it even more valuable for our travelers and partners. So I'll come back and talk about that. And I think there's a massive opportunity there, as I said, to be more personalized, trusted travel agents. The second is how do we benefit from the changes in consumer behavior where they're starting searches in these new AI experiences, which is part of -- I think what's behind your question is a genic and these new services. So I'll come to that. And then the third is how do we use AI internally in the company to be faster, to be more responsive and to drive efficiencies and productivity in our teams. Maybe I'll go to the second 1 first because that was the start of your question, then I'll go back to one, which is the 1 I'm the most excited about. It is clear that people are starting more of their searches in AI search, whether it's in Gemini, in ChatBot, Claude, wherever that might be. Now that traffic is still quite small. It's less than about 1.5%. It's growing fast, but it's still quite small. And we're doing a ton of work to make sure that our brands show up well there. And I think it's an incremental demand source for us. So we're doing work in AEO and organic -- we're doing work in paid or early with that GPT on their paid ads. And I think to the extent that the top of the funnel is fragmenting a bit more, whether it's with IGBT and Claude or TikTok moving into travel advertising more meaningfully, that is an opportunity for us. And the fact that we've been doing work over the last year in our marketing and be able to shift our marketing spend across channels based on a really good understanding of incrementality is really good timing for us. And then when you think about Agentic, we have opened our apps for agents to be able to come in because I want to experiment on everything. And again, it's a very small part of even that 1.5% that I was talking about. And it's early days, but from what we can see, what the agents are doing is they're coming in and doing a bunch of discovery, but not going to the transaction. So again, I hesitate to draw too many conclusions from a small set of data. But I think what you're seeing is agents going in, probably checking prices, trying to get a bunch of information, but that people aren't yet comfortable allowing agents to actually make the transaction decision for them. Because remember, travel tends to be higher ticket value, higher order value. There are a lot of different decisions to make at the time that you make the booking. If it's a hotel the room type? What is the rate plan? Is it refundable? Is it nonrefundable? There are so many different things that you don't necessarily want to delegate that to an agent. So all up, I would just say, it's early days. We're making sure that we're experimenting. We're present where we need to be present or doing the technology work to allow agents to come into us, but I actually believe it's going to be the vertical agents, not the horizontal agents that over time, these are ones that people trust the most. That's kind of the second pillar. Do you want me to go into sort of the

Yes please.

Why I mean I'm talking for a long time, so I make sure that I'm not I mean.

You're doing great.

The part about using AI in our product again, is a massive opportunity. There's sort of invisible AI, which is the rankings and the sort order and the recommendation. So when you buy a flight what hotels are we proposing to you. There's a lot of AI that goes obviously behind that. So that we're able to surface the things that based on what we know about you, you're most likely to transact on. There's type ahead. There's just a lot of things that are more invisible than there are the things that are more visible. So the conversation agents -- we've just rolled out natural language search on Vrbo. And so if you go to the [indiscernible] I think it's at aroud 50% of traffic right now. You can toggle and search by saying, you know what, I want to go to Tahoe, the last week of July with 8 people. I want a hot tub. We're automatically going to pre-fill the dates, the destination. And then when you get to the search results page, the content is going to be personalized based on your search as will the results and the amenities and the filters and the like. What we're discovering through that is we get more than 60% more information about a traveler in that kind of search than we did before, if someone just put in the destination. And so when you get that additional information, you're able to personalize even more. This is again why I keep on going back to we'll be able to be more helpful to travelers to help them get from search to find to book all of the -- in a faster way. And it's important that, yes, there will be agents that can go do some of the transactions. But I think people often forget that people are often happiest when they're in the planning process. So the idea that you want to allow an agent to do everything end-to-end, to me is there will be some trips that people want to do that with but many trips, there's the joy of being able to plan to collaborate with other people to share. And so we need to use the technology to take the friction away from it, but allow people to still have the joy of it, and to do it in a place where they can then connect it directly to the booking and the servicing. So that's -- that's really how I think about that first pillar. And then the third is all internal productivity. And to the extent that we can move faster that we can ship faster, it will allow us to innovate more for our travelers and partners.

What we're trying to do is investors just figure out how we can -- what you say makes a lot of sense, I think, another word for AI is personalization. There's a real opportunity here. we can only tell us investors, I guess, we look at the top line, maybe see some acceleration or something and maybe see some margin expansion. What KPIs do you look at internally to figure out whether it actually is improving your products, your personalization, your book-to-look ratio -- at the end of the day, that's -- I would think that there should be some -- and maybe it's still on the come. But what are the right KPIs for you internally, whether or not you disclose them?

So it depends which part of the business you're looking at. As I sort of said, there are some things that a traveler may not even know that it's AI behind it. So ranking and sort order or attach. So we look very closely at are the algorithms that are behind the recommendations improving. I mean, it's a known way that you can look at the KPIs on that. when it comes to newer things like the property expert agent or AI compare or even natural language search, we're still in such early days, the way I talk to the team about it is how quickly are we learning what are we learning every day, every 2 days, every week. What is the content we're discovering that people want that we don't have. I think you can too quickly go immediately to the -- what is the conversion impact or it may be that what we're finding is people are coming to us and using our agents where in the past, they would have gone to some other AI experience. So it might look like conversion is going down because we're seeing people more often, but it's just we're getting to play in more of the steps of the discovery process. So that's why like any way you look at the data, you could make up your own story. So I'm really focused on what is it that we're learning and how are we improving the product. And then we'll see down the road about conversion.

Do you think -- I mean, what's a reasonable time line for when this should all show up in our crude external financial metrics. Is this a '27, we're going to look back on 2017 and see that's -- we finally saw the real impact of personalization in AI?

I'm going to frustrate you because I'm not going to have an exact answer, but I think it's a gradual thing. I think like anything, and this is why I talked to the team about [indiscernible] basics and just it's like a day in, day out, improving things. And over time, if we're doing the right work and it's paying off, we should see conversion getting better. Now at the same time, if we're doing that, we should see more people coming to us, so that can impact the conversion numbers as well. But I think ultimately, it's how is the business growing? And are we keeping our direct business? And are we just growing overall the consumer business?

And 1 specific thing on that. We -- we've done 2 of these agentic travel reports, and we tried to track Expedia roaming, I think, and when we -- and George, did most of the work on this when we did this a year ago, we actually thought the best AI product for travel was Expedia roaming. And then it sort of seemed like you disappeared it a little bit, but it could be that you've just taken a different approach to it and just want to instead of having a separate named agent or whatever, just infused throughout the process. Did I get that right?

You did get that right. So what we did was -- and by the way, you're right, we were I believe we were the first to integrate a chat experience with Rome. It was 2 years ago. We put that out there. We tested a bunch, we learned. But 1 of the things we learned is it's pretty tough to have 1 conversation experience that's going to cover everything from inspiration to shopping, to booking to servicing all of that. What we realized is having point solutions, what we're calling these micro agents that you trained to be really good at a specific thing and that could show up at that moment in the shopping funnel or in the journey is going to be more useful to travelers. So right now, we're building a bunch of these micro agents. We have property expert, AI compare. We're going to activity planner. We've had a servicing agent for quite a while, and that's a really important 1 to be able to help travelers to be able to self-service. And then over time, we can build those all up into 1 agent. But again, our strategy is these micro agents that help at any point in the journey.

We have open AI presenting here later today. They've gone through a little bit of a change. It looked like maybe they were going to get into the booking or checkout process and then they backtrack from that. I think there were some pretty underwhelming performance that they have from that early initiative doesn't mean they can't go back there. But what's your sense about? Is it clear to you that the open AI, the Gemini of the world want to work with you as lead generation partners, rather than compete with you as booking agents.

Yes. Look, booking and servicing is complicated. There is catalog, there is making sure that you have constantly updated and accurate rates and availability. If someone tries to book something and it's not the price they expected or the booking doesn't go through, is it it's a problem. You have to be there to solve it for them. If something goes wrong, afterwards, you need to be able to get to 1 or fix something in product so that people can make changes to their reservations. So I would think it's a it's an easier problem to solve around advertising and lead generation and a great traveler experience and then leave kind of the tough work of the booking and servicing and the like to us. Now I mean, I think, Mark, you need in the industry for a while, been in the industry for a while, we've had for many years, this discussion of where is the booking going to happen. But knowing the complexity of all of it, I'm not surprised that some of them have backed away from it.

I've thought about the OTAs having 2 core competencies, supply aggregation and management and then optimizing different marketing channels. On the supply optimization to actually can now every single hotel and residents whatever on the malficoast, but doesn't know their availability.

It doesn't have their availability, doesn't know their prices is not able to go negotiate member deals with them is not able to go do promotions. I mean hotels sees and others as a really great lever to be able to fill their hotels to align with their revenue management strategy. And yes, technology can help us with that, but there's a lot of relationship that goes in the saying, okay, what are your need periods? How do we help you in your need periods? And that's an expertise that we have.

And then on the marketing optimization. So I think the thoughtful OTA concern or argument is they may not go and directly disintermediate OTAs, but there's -- those tools are becoming such so broadly used -- and then if they start -- over the last couple of years, you've had this increasing percentage of your traffic has been free. It's because of your loyalty programs, et cetera? And what's the risk that, that reverses that -- so I could pitch this either way, either you're diversifying your marketing channels, you're pretty good at doing that. So more diversification, more better or I could say it's actually going to squeeze out and crowd out all of that free organic traffic. Help us resolve this.

So what I would say is on the -- what you're missing in all of that is how by improving our product experiences are we able for all the traffic to come into us to have it convert and then repeat directly. So when we put these agents in place when we become more personalized, are more people going to start their journey with us because they're confident that we have a great loyalty program. We have great rates and availability and a great assortment. And in fact, Expedia is going to be able to help me plan my trip in a more effective way than it could before. I also want to come back to your statement, which was OTAs have been good on supply and then marketing optimization I would add for us, the B2B pillar -- the fact that we've got over 70,000 partners that we have relationships with, that we have deep technology integrations with, we understand the business of that we are helping build travel programs is an asset that I don't think is sufficiently appreciated sort of the value of that asset.

Okay. And by the way, do we already know that you're able to get more people to come directly to your -- the 1 statement you just made about getting people to start there because your experience has become better.

Well, what I would say is we have said publicly, we have 2/3 of our bookings that start directly with us. And in fact, over time, I think that that's a great place to be because if you're less than -- if you're more than 2/3 direct, then you're probably missing out on attracting new people from outside of your ecosystem to then come in. But to me, it's how do you grow both of them at the same time?

Okay. And then you mentioned these 3 strategic pillars at the beginning, and we sort of covered the first 2. And then this margin and all investors look at Expedia's margins and they can't help but compare them with bookings margins. And there's been this huge gap for a long period of time. And historically, I think it's for a variety of reasons, but some of the booking has just been very good at marketing efficiency. And -- and anyway, but you started to climate -- you started to narrow that gap, but you started to climb it up a little bit. So just talk about sources of leverage going forward and -- do we -- do you somewhat close this gap, your operating margin gap versus Airbnb and booking?

Okay. And I will start because Rob just slip me a little note and I misspoke earlier when I talked about our full year margin guide, it's 100 to 125 bps. I don't know why I said 100 to 130 sites recorrect that. I'm not updating any kind of guidance here. Okay. Look, so since I stepped in, we we've expanded margins in '24, '25, '26 as we continue to grow the business. I think it was 50 bps in '24, 240 and '25, and then we've got our guide for this year, this expansion. And it is really across all the lines of the P&L. Recently, we've had a lot of expansion coming from our consumer marketing. And that is a combination of using AI to have better creative having better measurement capabilities and understanding incrementality and being able to sort of shift across channels. And again, as the product performs better, our marketing dollar should go further. Again, cost of sales as we're able to automate things more, whether it's in servicing or even optimizing some of our cloud costs, we should be able to drive more expansion there. So overheads is another one. Since I've been enrolled, we've had a couple of overhead actions where we've reduced the size of our teams. And we're just constantly looking for opportunities there and it's balancing that with growth. So creating the capacity to be able to invest in growth while assistant sort of, I would say, in a systematic way, improving the margin profile of the company.

Is getting leverage in consumer marketing a backhanded way of saying that prior Expedia management teams were poorly spending their marketing dollars?

Well, I don't like to talk about the past in that way because probably a few years from now, someone will be on this stage as the same question, and I'm hoping they won't say no, [indiscernible] Look, I think everyone does like the deck of cards that they're dealt, you do the best job where you can. When you look at the 2021 to 2024 period in the consumer business, we were going through a lot of platform migrations. We had just come out of COVID. It was really difficult to understand where was demand coming from what was happening. And we've now -- we're in a place where we have the foundations in place to be able to have a better understanding of returns. And it's true that I've been more demanding with the team on what do we expect to get in our channels.

Okay. help us interpret some of the changes you've had in the team. What's your approach? You've been with the company for 10 years now?

13.

13 years. And so you've watched a bunch of different management styles, you've come in, and I think you've had a different management style. Do you want to explain what that style is?

If could you explain from that is done. No, I'm happy to say. I would say I'm someone who -- people who know me would say, Ariane is he's an operator. He's very pragmatic. I mean, so like have big ambition for the team. I always tell them they got to think big, but also be executing on the basics. And so it's sort of this constant pivot between what is the big picture that's going to take us for the long term, but also the short term. I also [Audio Gap] that we're building and the technology we're doing, I mean, it's exciting, but what is the traveler value and what's the partner value -- and I think because I grew up in the company in the B2B business and working on the supply side of the business, I'm really attuned to the like basically what's happening outside in the market and how do we differentiate ourselves from others. I think the other thing people who know me would say, Ariane is she -- I have high expectations of myself and of the team. We need to have ambition. We need to be hungry. We need to think about what are the possibilities? Forget about what's happened in the past, what can we do in the future? And if you look at what sort of where the management team is now. We've got, over the last couple of years a new head of technology, a new head of product, both of whom actually ran product and tech before had experiences in various companies. I like bringing in people who had experiences from outside of the travel sector. And [indiscernible] I would say, you look at our management team, we're a hungry team, we're ambitious -- and I think we want to go out there and win and we're mission-driven in the sense that we get to be in a business that helps people connect in the real world, and that's a real purpose. Or also very competitive and want to be successful in the marketplace.

Okay. 5 minutes, 2 more questions. Any comments at all on the overall travel demand in the market now? I think the Hilton CEO talked about some sort of C-shaped economy I don't know what that is.

You didn't want to do [indiscernible] It was the I was still talking at our last earnings call about the K-shape con. I mean you certainly see more strength on the high end versus on the low end. And that continues to be the case. In the U.S., there's a big summer ahead of us with the World Cup with U.S. 250, but we're certainly keeping a close eye on what's going on. You've got -- it's very public, the airlines that have taken some capacity out of the market, the pricing is going up. So what we're focused on is how do we make sure that our marketplaces, our brands and our B2B business, has supply and offers at all price points.

I guess what I'll try to ask you is, I don't know what the [indiscernible] means is that things getting better or things getting worse? And would you comment 1 way or the other?

I would just -- I mean, I will stick by my [indiscernible] Okay. All right. And it's not my cake. -- mean it's typical for you.

And then last question, just as -- how about the competitive mode or the differentiation question. And I know it's funny that as people have talked about OTAs forever, it's like, well, what's the real competitive differentiation with a booking or Expedia, you could book that the Omni hotel room, you can book this 7, 18 different ways and yet, there have only been 2 OTAs for 20 years now or something like that. Okay, AirBnB came in. But really, there's only been 2 OTAs. So I guess, it's an easy business to enter, but a very difficult business to scale. Something like that. But just talk about the competitive differentiation that Expedia has. Why is it that Expedia has just generally become bigger over time and why there haven't been a bunch of other Expedia?

Well, let me start at the company level and then I'll talk about the brand. So at the company level, I think the real differentiator for Expedia Group is the diversified demand portfolio we have, where you've got the 3 big consumer brands and you have a B2B business. that accesses demand across corporate travel, offline retail, loyalty programs, airlines, hotel business, OTAs in emerging markets. So we're able to really get exposure to all of that demand. And then as I said earlier, that allows us to bring more value to our supply partners like hotels and airlines and the like. which in turn allows us to get better content and it feeds the flywheel. So I think both for our supply partners and even for investors this idea that we are this diversified travel demand company is 1 thing. When it comes to the consumer business, Expedia, it's funny. We're the original super app and travel. Like we are the one place you go to go places with car and air and hotel and vacation rentals and activities and really all of that. And it's always been about packaging and bundling and the loyalty program. And I think the more scale you get, the more you can invest in great experiences and bringing more value to travelers. So we continue to do that. But now your question about why are other people doing it? As I said, the travel industry is massive. And there are a lot of people who will find where is their moat going to be in travel. You've got the financial institutions or credit card companies that will have travel programs. You have airlines that we will power the hotel part of their loyalty program because people want to use their airline loyalty points to book hotel and it doesn't make sense for them to go directly. So I think that's actually what's exciting is that there are a lot of different places where [indiscernible] can fit in and our B2B business can power them. So yes, we work to make sure that each of our 3 big consumer brands has a clear value proposition. People know why they should come back and be loyal. But the reality is people book in a lot of different ways in travel, and we want to be present for all of them.

That's great. All right. Ariane Gorin, CEO of Expedia. Thank you very much.

Thank you, Mark.