Alternative accommodations, generative artificial intelligence and a strong demand in Asia.
Those were some of the key topics covered by Booking Holdings’ chief financial officer Ewout Steenbergen in one of his first public interviews since taking the role six months ago.
Steenbergen answered questions from Goldman Sachs' analyst Eric Sheridan Monday during the investment firm's Communacopia & Technology Conference.
"I can see us in three to five years being in a position where that connected trip is really there - generative AI has really an impact. Our Asian position continues to evolve in a very strong way. Alternative accommodations, U.S. position, we're getting really to the levels where we want one to be and be that company that is really growing above market in a healthy way and delivering very good economics for the company," he said. "I think we have, we have all the pieces."
Notably, Steenbergen was not asked about two hot-button topics related to the industry and Booking Holdings including the August ruling that Google has created a monopoly and the fine for hundreds of millions of euros levied by Spanish regulators against the company earlier this summer.
Alternative accommodations expected to fuel growth
Booking Holdings executives - including Steenbergen and CEO Glenn Fogel - have been vocal about the company's prioritization of its alternative accommodations business.
Again Monday, Steenbergen emphasized the company’s focus on its alternative accommodations business - which is growing at a faster rate than the company as a whole, a point he touched on during Booking Holdings’ second quarter earnings call.
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“I think what is a differentiator for us here is when a traveler is coming to us on our platform, you get all forms of accommodations in the proposition at the same time,” said Steenbegen.
He used a family with two young children as an example: Perhaps the group is searching for a hotel option with a family room or two rooms connected. But within a search on Booking.com they also get a result showing an apartment with the possibility to have two bedrooms or a home to accommodate the family. They can then choose which type of accommodation is best while comparing prices in one central location.
That integration of all kinds of accommodations on one platform is the “real differentiator,” according to Steenbergen.
“That ultimately drives a lot of business, but also familiarity, because maybe in Europe and in Asia, people are very much familiar with the fact that we offer alternative accommodations in the U.S.,” he said. “So, [the] more that people see that, realize that, start to book it - that becomes more attractive for the alternative accommodation owner that they want to be on our platform.”
While the company has been growing its alternative accommodations business, supply is an opportunity area.
“I would say [for] supply we’re already at par in Europe and in Asia, and in absolute business volumes we are at par. [The] U.S. is an opportunity area for us, so it's growing. But again - familiarity, product improvements, easy process for accommodation owners to sign up and to become part of our platform - that will go up over time in the U.S., so we will see that business growing ultimately in the U.S. also to the same kind of level.”
Generative AI will be transformative
Steenbergen believes - like so many others - that generative AI will be transformative for the world and for all companies, Booking Holdings included.
... we're getting really to the levels where we want one to be and be that company that is really growing above market in a healthy way and delivering very good economics for the company.
Ewout Steenbergen, Booking Holdings
Generative AI offers opportunity in two ways - for internal processes and efficiencies and second on the commercial side. The company, he said, has already done quite a lot with traditional AI.
“I am personally the most excited about the commercial side for what you can do for our proposition, because this is ideal from a connected trip perspective, and we have all the data of travelers from the past,” he said. “So that is our differentiating factor.”
Data, he said, will be the biggest differentiator. “We're sitting on the best, richest data set, given the skill we have as a company.”
With data, the company is able to tell what each customer’s preferences are - and that makes it much easier to provide personalization and inspiration on the front office side. And Booking Holdings' brands are already playing in the generative AI space with Agoda taking a humanistic approach, Priceline's Penny chatbot and Booking.com's AI Trip Planner launched last year.
“I think you probably see it [generative AI] showing up in our financial results earlier - more on the internal processes,” said Steenbergen.
Asia remains strong
The CFO anticipates Asia will remain a “very strong” market in terms of demand.
“It's maybe the region that came [out] last of all the regions out of the pandemic situation,” Steenbergen said. “So there's still a little bit of Asia coming back. But also in many markets in Asia, people are now getting to levels that [where] they can travel for the first time.”
He gave some analysis on other markets around the globe, too.
The industry has seen a “mild moderation” of normalization and stabilization in Europe - but Booking Holdings still sees that as a positive in terms of demand.
“Culturally, Europeans like to travel. They have a lot of holidays. This is something that is on top of their priority list,” he said. “Being really strongly embedded in Europe is definitely helping us.”
As for the U.S., he sees growth as positive, too, for the company. “It's a market where we are relatively under penetrated. I think we are punching below our weight. Our market share is relatively the lowest in the U.S.”
Steenbergen also touched on his future at the company, social media, direct bookings and loyalty, among other topics. The full interview will be available on Booking Holdings’ website for the next 6 months.
The Phocuswright Conference
Here from two of Booking Holdings' brand leaders - Priceline CEO Brett Keller and Kayak CEO Steve Hafner - at The Phocuswright Conference in November in Phoenix.