Some thoughts on Expedia following Barry Diller's recently famous qtrly call ⬇️
Turn at not easy as some issues go beyond lack of focus and bloat. It will become a better company but still an inferior one to after some Diller "magic"
skift.com/2020/02/13/exp…
Turn at not easy as some issues go beyond lack of focus and bloat. It will become a better company but still an inferior one to after some Diller "magic"
skift.com/2020/02/13/exp…
1/x "Company will look at every market it’s in, withdraw some brands where sister brands, such as Expedia or Hotels.com, might have a higher profile, and will rationalize marketing spend". One key issue many noted at EXPE is its lack of focus in contrast to BKNG's..
2/x ..relentless focus on hotels. EXPE acknowledging it and looking to rationalise their big umbrella of brands across markets will help margins but still not enough because structurally, the issues go beyond just markets. They will have to unite the back end systems,find a way..
3/x ..to increasingly add fragmented supply in EU at a reasonable ROI, and communicate that change to consumers who are already habitually going direct to the BKNG app (particularly in EU).So they can change the front end (rationalise brand/markets), they can push app downloads..
4/x ..but what will fundamentally keep consumers is ultimately supply and price. Supply that BKNG has a tight leash on given its portfolio managers tracking week to week conversion/mkt share trends at each property and having liberty to manage e relationship optimally when..
5/x ..the trends turn for whatever reason. Also to note much of these relationships have spanned a decade. BKNG also has a common back end globally that allows insights to data that surface the right ROI for each property/marketing.Again contrast to EXPE with regional back end..
6/x ..much of it issues relating to the big umbrella of acquisitions and separate back end system each of them came with.
So can Diller make a splash, bring up the margins and change the "narrative" on EXPE? Yes i believe so & we have already seen that in the price movement..
So can Diller make a splash, bring up the margins and change the "narrative" on EXPE? Yes i believe so & we have already seen that in the price movement..
7/x ..but will he really unwind structural issues e company accumulated over e last decade in 1 year? I doubt so.
Like many other companies, cosmetics changes will get Wallst to bite on a new story..but "turnards" don't turn as often as we think in the background..
Like many other companies, cosmetics changes will get Wallst to bite on a new story..but "turnards" don't turn as often as we think in the background..
8/x ..while leaders like that have found a winning formula built upon strong foundations (culture, focus, systems, relationships) keep on winning
