BKNG
#<UNK>, on the ADR side, no significant impact on our overall blended ADRs from our increasing share of vacation rentals, and it's still fairly early days in the vacation rental space and we've got teams of people at Booking.com that are continuing to innovate and grow that business.
Right now it's mostly through property managers, but we are going to continue to add properties there, and we're looking to make our tools easier for single property owners to also be able to participate, so we're going to continue to advance there but right now it's mostly property managers.
Okay, so <UNK>, thank you for those questions.
In terms of online brand spend, that's something that has grown in brands around the Group in the last couple of years, and it does provide the opportunity for different ways of measuring effectiveness, and at least in our view in some cases, more effective ways to measure the effectiveness of your brand spend.
So I'm actually very optimistic that moving of brand spend to those channels has the potential to help us drive better long term returns on investment on our brand spending.
But at this point in time, it's not being measured like performance-based advertising where you're looking at the same session unit economics divided by cost per click kind of thing.
It's just not those kind of measurements, so I don't want to represent that we are or ultimately we'll be looking at it the same way, but I think it's a ---+ it bodes well for our ability to better manage our brand spending over time.
With respect to from a higher level, the changes that we're seeing in the space, I think that I continue to be very impressed by the size and the scope of the opportunity that the Priceline Group and others in our space have in front of us.
Year after year, good execution is rewarded when demand goes to new distribution channels, when you look at the importance of two businesses that you just mentioned in terms of sources of demand, YouTube and Facebook and others, it just, it's an opportunity for companies that can execute quickly and well to diversify and build on their demand.
I also continue to be impressed by how attractive the global nature of the business is and the scale that we've developed, and in particular Booking.com has developed that just gives us an opportunity in markets around the world to build really big businesses, despite the turmoil that characterizes not only the world economy but the political situation around the world.
And one thing that has impressed me about this business since I started running it as Chief Operating Officer of Priceline.com in late 2000, is the resiliency of our businesses in the face of some of these challenge.
Which is not to say that we don't see the impact of terrorism or financial crisis.
We absolutely see it.
The economic cycles do affect our business, but time after time after time, they recover quickly and they build because of the very substantial tailwinds that we have benefiting us in terms of movement of this activity from offline channels to online channels.
The growth of economic activity and middle class spending in emerging markets around the world, and finally the ability of our talented teams around the world to improve the edge we have in trying to drive demand in these channels.
I hope that's responsive to your question.
I don't think that the deceleration that we're pointing to here has really anything to do with competitive factors in the marketplace.
We obviously have a number of brands that are out there, and I think it's fair to say that not each one of them has the exact same competitive strength and positioning, but as we look at the share of the business we're getting from major distribution channels, we feel very comfortable that we're holding or gaining share.
When we look at what's happening in alternative accommodations, and particularly the growth that Airbnb is advertising in the marketplace, I personally think that represents an opportunity for us because we are in a position to build our business in that space and to drive very substantial demand to those properties to convert them with an experience that's great for the customer and profitable for us.
So I view that as a net substantial positive in terms of marketplace conditions for the Group.
Okay, thank you.
With respect to branding and branding spend in the United States, I would start off by saying that we are very pleased with the progress that Booking.com has made in building its business and in building its brand in the United States.
From time to time we've given some insight into what our overall growth rate is in the United States, and we're not providing that color today, but I will say that we are pleased with the absolute and relative rates of growth of the Booking.com, its business here in United States.
We're very pleased with the results of the original brand launch on television of Booking.com in the United States and saw a demonstrable impact in terms of not just awareness but also the Business and ultimately the total cost that we experienced to drive customers as a whole were attractive to us.
As to why brand spending versus performance-based marketing, in the United States, it's a different market than international markets.
First of all, our competition has very substantial share of voice on television, and if you don't participate you are conceding awareness and ultimately demand to your competition.
And when you think about the size of the US market, in terms of population and the travel market, and the fact that it's a homogeneous market that you can advertise to with one campaign across the country, it really makes sense to have brand advertising here, and I think that strategy is spot on.
And as we said in our prepared remarks, having a push associated with a new campaign is not something that's going to happen every quarter of every year, but we think it's a solid and sound strategy to continue to build awareness for our brand which today research is available everywhere under indexes in terms of awareness with other major travel brands in the space.
In terms of OpenTable and their plans to expand internationally, I think I said in my prepared remarks that there's a technology job to do in terms of revisions to their tech platform that make international expansion easy versus having to build a new platform in every different country, and that work is under way.
And I think once it's completed, we'll be in a better position to essentially build on the international footprint that we have as a Group in helping OpenTable bring its product overseas.
I'll mention that they've done some work in Australia on a preliminary basis to try to understand what the potential impact of that is, and while it's very small and very early days, we think it's showing us that this strategy is the right strategy to help build out the brand.
Why don't I do the second one and <UNK> will do the first.
With respect to the major hotel chains, a couple of things to keep in mind.
First is, just say at the outset that our relationships with hotels in particular, and with the hotel chains, is an important part of who we are as a group that we have a tradition of supplier friendliness of bringing demand to our hotel partners at very low distribution costs.
And in particular because of the international footprint of our business, we uniquely can provide access to demand around the world that even the most sophisticated chains cannot access themselves because they don't have the functionality, the language capabilities, or the distribution capabilities that we have on a global basis.
So we're providing a little bit of a different, and at least in my judgment a more valuable service to hotel partners really than anybody else in this space.
With respect to their efforts to drive traffic directly to their website, it's understandable.
They have a strong desire to strengthen their brands and we understand that.
On the other hand, we believe our customers are entitled to competitive pricing and the best availability that is out there for intermediaries because we provide the largest business to most of the hotels that we work with, so we try to maintain that balance.
I think people should keep in mind that the share of business that the Priceline Group does with the chains is relatively small.
It's not like it used to be for Priceline when the chains for the US business were such a major part of the whole.
It's really a much smaller part of the business, and ultimately for any hotel that wants to maximize the benefit they get from working with our brands, the most important things are going to be their pricing, their content, their availability, the competitiveness of the offer that we can show to our customers.
And <UNK>, in terms of the EBITDA overperformance in Q1, we typically don't manage our brand spending that way so we don't say okay, we've overperformed therefore let's just churn a lot more money into advertising.
Our performance advertising approach has been very consistent over many years now.
It's consistent in Q1 and Q2 with what it has been in the past.
In terms of the brand advertising, the timing was more in Q2 than Q1 based upon when the campaigns were available to roll for Booking.com, and for Priceline.com it was a strategic decision to hold back a little bit on running the campaign until we were further along with the tech platform relaunch.
So we're trying to spend what we think is the right amount to build our brands for the long term rather than overs pending because we had some overperformance in EBITDA in a quarter.
Yes, so we aren't going to quantify the Ramadan and Euro Cup impact, but I will say growth is strong thus far out of the gate and we typically then assume that growth will decelerate as we move through the quarter, given the size of the business.
There's no change in our approach there, and then we factored in what I would say overall for the quarter is a relatively small impact related to the two specific issues.
And then the brand spending, what we said is that the deleverage in Q2, almost half of it is driven by accommodation of the Easter shift in timing and the increase in brand spend, so you can get a pretty good idea on what that amount is by doing the math.
You know, <UNK>, I don't think we have any particular comment to make about the relative strength or weakness of outbound APAC.
It's ---+ I think the performance of the business in APAC in general has been consistent with our expectations.
The only regional comment I would make there is that inbound travel, international travel to China, has continued to be under pressure for primarily pollution reasons, honestly, more than anything else.
And in terms of hotel quality, I don't have a comment to make to you there.
No, nothing to call out, <UNK>.
I mean it pretty much tracks the footprint of our business, so we are adding vacation rentals in all of our markets, principally in Europe, which is our biggest market.
So nothing I would call out there that's noteworthy.
You're welcome.
Thank you all for participating in the call.
