Kevin Kopelman

Kevin Kopelman asked for insight into major product launches for 2026, specifically about AI travel search, and how the company plans to manage margins next year amid ongoing investments.

Answer

CEO Brian Chesky confirmed AI will be integrated more into the app next year but did not preview specific 2026 launches. CFO Ellie Mertz declined to guide 2026 margins but affirmed the strategy of investing in new businesses while driving core efficiencies. She also noted the new tech stack is improving development velocity, which should accelerate the product roadmap.

Kevin Kopelman asked for clarification on the drivers of softer ADR guidance for Q2, specifically the mix between geographic shifts and softening within key regions, and inquired about the assumed FX impact.

Answer

CFO Ellie Mertz outlined three factors affecting Q2 ADRs: a tailwind from real price appreciation, a dissipating FX headwind compared to Q1, and a negative mix shift as the business moves away from higher-priced North America. She also noted that Airbnb does not get the same FX benefit as some peers due to more limited exposure to currencies like the euro.

Kevin Kopelman asked for an update on where advertising services rank in Airbnb's priority list as it rolls out new businesses.

Answer

CEO Brian Chesky confirmed that advertising services are viewed as a significant opportunity, potentially worth over a billion dollars. However, he clarified that it is not a top priority for the current year, stating it's a matter of 'when, not if' and is something on the horizon but not for 2025.

Kevin Kopelman inquired about the revenue expectations for the new services launching next year, asking if they will contribute meaningfully in the second half of 2025 or if they are more of a 2026 revenue driver.

Answer

CEO Brian Chesky described it as 'a little bit of both.' He stated the launch will be aggressive, targeting over 100 cities at once, which should generate some incremental revenue in 2025. However, he set expectations for a multi-year journey to reach significant scale. CFO Ellie Mertz added that investments will front-run revenue, with expenses appearing early in the year before the new offerings are launched and begin to scale.

Kevin Kopelman asked about the drivers behind Booking Holdings' U.S. acceleration in Q3, specifically inquiring about B2B initiatives globally and in the U.S., as well as key factors contributing to B2C growth.

Answer

Glenn Fogel, CEO and President, expressed satisfaction with the U.S. acceleration, noting consistent improvement over three quarters in both B2B and B2C segments. He highlighted ongoing efforts to enhance B2B efficiency by consolidating best practices across brands and improving the B2C product and brand awareness, citing recent baseball advertising. Ewout Steenbergen, EVP and CFO, added that healthy domestic and outbound travel, coupled with a significant step-up in direct channel growth in the U.S., contributed to the strong performance, attributing it to sustained investments in product, supply, marketing, and brand.

Kevin Kopelman asked about the drivers behind Booking Holdings' U.S. acceleration in Q3, specifically inquiring about B2B initiatives globally and in the U.S., as well as key factors contributing to B2C growth.

Answer

CEO and President Glenn Fogel highlighted satisfaction with U.S. acceleration, noting strong B2B contract wins and ongoing efforts to improve efficiency across B2B units. He also emphasized product improvements, brand awareness, and customer service as key B2C drivers. EVP and CFO Ewout Steenbergen added that healthy domestic and outbound travel, alongside a significant step-up in direct channel growth in the U.S., contributed to the positive trend, reflecting investments in product, supply, marketing, and brand.

Kevin Kopelman from TD Cowen asked for an update on U.S. consumer behavior trends, such as booking windows, and requested commentary on similar macro-sensitive metrics for European and APAC customers.

Answer

CFO Ewout Steenbergen detailed a split in U.S. consumer behavior: the high end remains strong, while the lower end shows more caution. In contrast, he noted that European consumers are holding up well, booking earlier at higher prices and prioritizing travel. For Asia, he observed strong demand and sequential growth from Q1 to Q2, highlighting Booking's strong regional position.

Kevin Kopelman of TD Cowen inquired about recent trends in U.S. consumer behavior, such as booking windows and length of stay, and asked for similar macro-sensitive metrics for European and APAC customers.

Answer

CFO Ewout Steenbergen detailed a split in U.S. consumer behavior: the high end remains strong, while the lower end shows more caution. In contrast, he noted that European consumers are holding up well, booking earlier at higher prices and prioritizing travel. In Asia, demand is strong with sequential growth from Q1 to Q2, reflecting the region's robust travel market.

Kevin Kopelman inquired about supplier engagement with the Genius loyalty program, its expansion into other verticals, and whether supplier participation increases in markets experiencing demand pressure.

Answer

CEO Glenn Fogel described the Genius program as a 'win-win-win' for consumers, suppliers, and Booking. He confirmed that suppliers look to programs like Genius to drive incremental demand during softer periods without engaging in public price cuts. He emphasized that Genius is one of many targeted tools, including mobile and geographic rates, that Booking uses to scientifically help partners capture demand.

Kevin Kopelman asked for the company's stance on large M&A and for more color on the drivers behind expected marketing expense leverage in 2025.

Answer

CEO Glenn Fogel declined to comment on M&A. CFO Ewout Steenbergen detailed the drivers for marketing leverage, citing continued growth in direct traffic, higher performance marketing ROIs, and particularly the success of a 'bespoke' partnership with social media channels like Meta that is delivering attractive, incremental returns.

Kevin Kopelman asked about the drivers behind higher marketing ROIs in the third quarter and sought an update on the full-year outlook for marketing and merchandising as a percentage of gross bookings.

Answer

CFO Ewout Steenbergen attributed the higher ROIs to the company's specialized expertise and algorithms that continuously optimize incremental spend across all channels. For the full year, he expects merchandising as a percentage of gross bookings to be flat, with marketing leverage continuing in Q4 due to the growing direct channel mix.

Kevin Kopelman from TD Cowen asked about the key growth drivers and trends in the B2B segment, the FX impact, and the trend in B2B revenue share rates.

Answer

CEO Ariane Gorin identified strong growth in Asia (up 30%), geographic diversity, and winning share with existing partners as key B2B drivers. While acknowledging new entrants could pressure revenue share rates, she emphasized that product innovation and adding value helps create partner stickiness. CFO Scott Schenkel clarified that the FX impact on Q2 GBV was approximately one percentage point.

Kevin Kopelman asked for more color on the company's capital return philosophy, specifically regarding share repurchases and the dividend. He also questioned if the improved performance of core brands changes the company's thinking on larger acquisitions.

Answer

CFO Scott Schenkel outlined the capital allocation strategy, confirming a commitment to a 2x target leverage ratio and opportunistic share buybacks, with $3.2 billion remaining on the authorization. He positioned the new $0.40 quarterly dividend as a way to attract income investors. While keeping flexibility for M&A, CEO Ariane Gorin added that the primary focus remains on executing and growing the existing portfolio of brands.

Kevin Kopelman of TD Cowen asked for a characterization of the current underlying trends in the leisure transient segment, excluding any calendar-related distortions.

Answer

CFO Leeny Oberg described leisure transient as a 'surprise outperformer,' particularly in the luxury and resort segments. She attributed the strength to demographic trends and a continued consumer preference for experiences over goods. While booking windows remain short, she characterized the underlying trends as 'excellent' and 'solid,' though not accelerating.

Kevin Kopelman from TD Cowen asked for more detail on why Viator's Q1 marketing spend was flat year-over-year despite strong volume growth and sought confirmation on whether third-party revenue share is included in the marketing expense line.

Answer

CEO Matt Goldberg explained that the flat marketing spend was primarily due to lapping a larger brand campaign from Q1 of the prior year, combined with ongoing efficiencies in paid channels. He then clarified that for most third-party relationships, the associated costs are not in the marketing line but are typically netted out of revenue, and this was not a driver of the marketing efficiency.

Kevin Kopelman asked for early thoughts on the 2025 outlook for Brand Tripadvisor, specifically the balance between growth and margins, and whether there were any notable upcoming comps related to changes at Google.

Answer

CFO Mike Noonan stated that for 2025, Brand Tripadvisor will continue to face structural headwinds in its legacy meta business while scaling strategic investments like in-app booking. The ambition is to return to growth, but the pace will depend on the level of investment. Regarding Google, Noonan said there was nothing new or incremental to report, as the company's teams are experienced in managing Google's ongoing algorithm updates and the persistent headwind from paid ads in search results.

Kevin Kopelman sought clarification on the RevPAR outlook, asking if the 0% to 2% growth range for the rest of the year also applied to Q2. He also asked for help translating the all-inclusive pacing data into a net package RevPAR forecast for Q2.

Answer

CFO Joan Bottarini confirmed the 0% to 2% RevPAR growth range is a good guide for Q2, with April tracking toward the higher end. She explained that the high single-digit pacing for all-inclusive should translate to a mid-single-digit net package RevPAR result in Q2, similar to Q1. CEO Mark Hoplamazian added that they feel confident in this, as 88% of Q2 all-inclusive business is already booked.

Asked about Q4 quarter-to-date transaction trends, the duration of pressures in the Mexico market, the company's initial thoughts on the growth versus margin trade-off for the next year, and the margin implications of the accelerating B2B business.

Answer

The company is confident in its Q4 guidance, which implies YoY growth. Pressures in Mexico, including FX and air capacity, will persist in Q4 but are not expected to be as severe in 2025. For next year, the company is focused on long-term, industry-leading growth, which will guide investment decisions. The B2B segment has a broadly similar EBITDA margin profile to B2C and is poised for strong growth.

Inquired about the size of the Livelo partnership within the B2B business and the company's progress on expanding into new markets.

Answer

The executive described the Livelo partnership as a very large revenue opportunity with significant growth potential, without providing specific figures. For market expansion, the focus remains on Brazil and Mexico, but the company is actively exploring B2B partnership opportunities beyond Latin America due to strong inbound interest.

Inquired about the take rate outlook for 2024, the specific areas on the income statement where guided operating leverage will appear, and how to model the net financial results line.

Answer

The take rate is expected to remain stable around 13%, as growth in high-margin packages is offset by the mix-shift towards the lower-take-rate B2B business. Operating leverage will come from efficiencies in gross margin, tech, S&M, and G&A. The net financial results line should be modeled similarly to 2023 for now, though improvements are being pursued.