Next session is with Peter Kern, CEO of Expedia. Peter, thanks for being here at the conference for the second year in a row.
Pleasure. Thank you, Eric. Happy-
I think maybe just to level set and start from a bigger picture standpoint, you know, the company's been on this journey of evolution of new products and new focus areas, and you're obviously rationalizing where some of the focus areas are gonna be within the company. Talk about the journey you've been on over the last couple of years, where the company sits today, and sort of how that fits into your broader vision for where you're going.
Yeah, well, kind of working our way back, I mean, we're really excited about where we are right now. And one of the funny things about the... Or not obvious things, maybe, about a transition that we've been going through and this kind of technical transformation, which was massive, is unfortunately, the benefits don't come rapidly, right? You don't, like, do 10% of the work and get 10% of the benefit. There's a ton of foundational work that has to be done on the back end to make things like smashing stacks together, creating, you know, build once, deploy everywhere, deploy every geo. All of those things come from a ton of foundational work. And so, you know, we are now through, I don't know, 90%.
Like, we've done it, and now we're to the really fucking exciting stage where the consumers start to feel the benefit. And the first obvious version of that was One Key getting out the door, our big new loyalty program, which involved all kinds of massive lifts, getting people to one identity, one data, one set of data, a bunch of issues we had to solve between brands. So it was kind of this, this moment to pull everything together. But now we are at a stage where we can much more rapidly deploy innovation. So we've had some product features, we've had some benefits. We've grown, we've grown EBITDA, we've grown cash flow, but I feel like we've done it with, like, one arm tied behind our back and a leg and an eye patch and whatever.
And now we're finally at, like, a new setup where we can just go much more rapidly, and things that used to take a year and 100 engineers take weeks. And that kind of opportunity to accelerate is just incredibly exciting for the team.
There's a lot in there that I wanna unpack as we talk over the next 30 minutes or so, especially about some of the exit velocity this will give you as we move out of this year and into next year. To level set, you know, obviously reported results in August, and one of the biggest debates among investors right now is just the broader demand environment.
Mm.
We're coming off another strong summer travel season, but macro has been a big topic of conversation here at the conference and rate of change with the consumer. Give us your latest updated views on the demand environment as you see it, even if just going back to the Q2 report and what you-
Yeah, I mean-
Talked about
... what we said in Q2, and it's remained basically similar, is demand remains strong.
Yep.
Now, the parts of the world that came out of COVID first, you know, are relatively slower than they were when they zoomed out of COVID, so, you know, North America, Western Europe, et cetera. Where Asia and Latin America, a little further behind the curve, they're still accelerating more. And everything's, you know, sort of settling a little bit, but there's a huge, you know, still tons of demand out there, and, and, you know, you'll find pockets, you'll find changes in habits. You know, this past summer, people really liked international cities-
Yep
... particularly North Americans. Depending if you were there, you probably heard a lot of English spoken. Whereas, you know, a year before that, they were all going to vacation rentals in the mountains to hide from each other. So, you know, there have been these kinds of changes. I think that will all find its balance. I've kind of been of that opinion from the beginning of COVID, and we see it again and again, and again. So China's opening up. There are other countries still on the opening curve, and then there are many that have matured into, like, a more stable state of demand and... But all pretty solid.
Maybe to take one more step back, when you think about sort of travel normalizing, we've been through this-
Mm-hmm
... pandemic and then this post-pandemic recovery period, but you also are coming through this period where you've been through a technology shift, and now you have potential tailwinds for acceleration as we exit this year.
Yep.
How should we think about your algorithm for growth against a normalizing environment, but the potential for lapping some of these headwinds that you faced?
Yeah. So obviously, you can't hide from, you know, the organic trends in the world, and if we had a big recession or a big whatever, those things have impacts. But we definitely feel like we've been running slow so that we could run fast, and that means that as we go forward, we believe that we're going to be able to accelerate growth against a, whatever the normalized level of global travel is. So we don't look at the organic. We're not looking at organic trends for next year. We're right in the middle of our planning year.
Yep
... and whatever, I'm not gonna-- I don't even know the results, so I'm not gonna tell you. We're not looking at, like, okay, what do we think North America is plus X, and this is plus Y, and, and what are we gonna do? We're just looking at what we think the trajectory of our acceleration of our own business: conversion, lowering churn, stickier product, you know, more traffic through the top of the funnel, all those pieces. That's, you know, what will One Key do? All of that, et cetera. We think we're gonna have a lot of, you know, if you will, our own organic tailwinds to what we're doing. Again, it's a little bit like we've just taken off the bonds, right?
We've now got my right arm back and my right leg, and we can just go a lot faster, deploy things much more quickly, deploy them around the world. We'll be more aggressive, probably geographically. You know, we've kind of regathered ourselves during COVID and decided to get out of some markets where we were not profitable and-
Yep
... did not have a winning hand, and now that we feel like we have a winning product, a winning hand, you're gonna see us probably get more aggressive out there.
Understood. One last one on this topic, and then I wanna turn to those organic tailwinds, in particular on the alternative accommodation side. But one last one: One of the other debated topics among investors is elements of the inflation you've seen in ADRs and air prices globally.
Sure.
I can't tell you how many investors over the last two days have said to me what they're paying for hotel rooms in San Francisco this week. So, how should investors think about normalization of price versus normalization of units? Or how do you think about planning for that in your business looking forward?
You know, it's interesting. I think we've seen some different dynamics. So if you look at, for example, the hotel business, you know, particularly big hotels, you know, branded hotels, et cetera, there's, you know, a business benefit to everybody holding price, right? Like, and unless you have a need to cut price, those prices have held up, and in general, you've probably heard this story before, hotels have been willing to be slightly less occupied and maintain price at a high level because they can't hire people as well as they used to be able to. It's hard to hire. So they can't really service being fully occupied, so they'll be 70% occupied, but keep price 30% higher, and they actually make more money. So, that imperative has driven some of that.
Now, if you look at the car business, that's a really interesting one. Rental car, you know, prices were sky high. I don't know if any of you tried to rent a car in Hawaii right out of COVID. It was like $1 million a day. You couldn't get a car. It was crazy. Then finally, the car companies got back all the supply 'cause they had sold off their fleets, and now car prices have come way down, rental car prices, but volume is way up. So there's an interesting kind of trade-off that goes on in there. But from what we can see, we think price in all the big categories will hold. You know, hotel, air doesn't look like it's going anywhere. Again, you know, those are businesses that don't have a huge incentive to put excess supply into the market-
Yeah.
-unless there becomes a business imperative to do it. So I think you'll see that hold up pretty well. Vacation rentals, because there's a lot more independent owners, there tends to be a little more volatility in price because somebody decides they gotta move their place, pay a mortgage, do whatever. So you, you might see a little more there, but, but it looks like it's gonna hold right now. And, you know, we, we forecasted it this year, I think when we started, don't quote me on this, like, flattish, and, and it's been flattish, basically.
Understood. So let's get back to what you've been doing from a transition standpoint, and in particular, the last piece of the replatforming is around alternative accommodations with Vrbo. Talk a little bit about the journey you've been on with Vrbo and how you see it set up now going into Q4, and then obviously, as we get into next year and there's seasonality-
Yep
... tailwinds to alternative accommodations, the deeper you get into 2024, of how to think about the setup for Vrbo now that it's in the process of being replatformed.
Yeah. So, you know, like all of these things, I could tell you all my problems, but, you know, replatforming generally involves going backwards to go forward.
Yeah.
You gotta break things. You gotta change the experience. People need to adjust. Features change, things change, and that usually creates disruption, and it did with Hotels.com, it has with Vrbo. But the really exciting thing is now Vrbo will be the beneficiary of all the improvements we're making in the product generally, and, you know, while the product experience may be different than an Expedia or an Hotels.com, it still gets to benefit from various improvements, like collaborative shopping, which we're improving across all the products, things that don't exist in the market right now. So there's a lot of goodness coming from that. And then I would say, you know, as you look forward broadly, look, COVID was great for Vrbo, great for vacation rentals generally. Obviously, there's been some habitual changes, that people have gone to big cities again and other things.
That plus all the noise of conversion certainly created a noisy year for us this year. But going forward, first of all, we have One Key, so we have the only loyalty program in Vrbo, which isn't just like, "Hey, that's better than Airbnb, come to us." It's also the fact that we've got 160-odd million members in our other platforms, in Expedia and Hotels.com, et cetera, who will now be able to actually use their earned rewards on Vrbo. And likewise, our Vrbo customers will be like, "Oh, oh, now I have Vrbo—now I have OneKeyCash, and I need a flight, or I need a car, or I need a hotel room.
I'm just gonna go to Expedia, 'cause why would I go somewhere else?" So keeping everybody in our universe is a big tailwind for all the businesses, but for Vrbo as well. It will get the feature velocity, it will get the benefits of all that, and I think we will see, you know, a secular like... You know, again, these things have gone in waves-
Yeah
You know, international cities over this or that. I think we're gonna see growth. And then the last thing is, because we had all these separate systems, we actually had different inventory available, different places. You could rent a Vrbo on Expedia, on Hotels.com. It wasn't a great experience, but there was a different kind of inventory available there, usually multi-unit homes, multi-unit buildings, like, think of it as vacation building in, you know, San Juan and 20, 20 identical apartments. Now, all of that inventory will be able to be meshed together, so we'll get a big inventory lift on Vrbo that we didn't have before. We'll have a better experience for the customer. We'll have rewards. You know, we think that sets up to be a really compelling product.
So keeping with that theme, when you think about priorities for 2024 and beyond, how should we be thinking about investments you wanna make behind both the demand curve and the continued growth in supply in alternative accommodations now that the tech infrastructure and the platform-
Yeah
is where you want it to be going forward?
Yeah, we've actually had pretty solid, better than we used to, growth in supply in the last year, and this ability to do what I just said will literally be hundreds of thousands of properties that will be magically added to the pot. So there's a lot of opportunity to grow supply. It's not actually the beauty of where we are is, these don't become these enormous investment choices because the work is much easier to get done. So yes, supply is its own thing, chasing supply, but in terms of the technical lift to do certain, you know, do we invest in Vrbo? Do we invest in Expedia? Do we-- Like, it's all the same pool of investment, and a lot of the benefit and yours to all the products, all the geographies, et cetera. So we think there's ample opportunity in Vrbo.
We think there's ample opportunity in hotels, in air, in activities, in car. Like, there's a lot of opportunity for us, and as I said, like, we've kind of regrouped back to the North America during COVID, and we're seeing a lot of opportunity to go be more aggressive geographically in other parts of the world. And we understand our customer value much better than we ever have in terms of lifetime value, who our customers are, what those attributes are that make the most valuable customers, so we can be much more targeted in what we go after, where we invest our capital to go after.
Understood. Sticking with that, over the last year plus, I think what I've heard on the earnings calls each quarter is sort of a growing excitement from you about the B2B opportunity-
Yeah
What you've built, what you put in place, the momentum you see behind it. First, taking a step back, talk a little bit about what you've put in place against what you see as the opportunity set for B2B.
Yeah.
How should investors be thinking about elements of how it can contribute to growth, how it can contribute to margin, you know, some of the things you've talked about?
Yeah. So I think simplistically, our B2B business, A, didn't have to go through a huge transformation, so that, that was helpful. Like, the transformation part's really painful. And B, we invested behind it in a number of ways, improving the product, improving commercial terms and other things with our partners that, that advanced the business. And all of that has obviously driven a lot of growth. We believe there's a very big address... We're the biggest in the space. We believe there's a huge addressable market that we continue to go into. We've built everything new technologically in our B2C business so that it could be used by the B2B business to the greatest effect. So there are knock-on benefits to the B2B business, even though it's been able to grow really strongly. So, you know, we love that business.
We've invested behind it from the beginning, from the beginning of COVID. It is much more heavily indexed to rest of world than our B2C business right now, so it gets the tailwinds of Asia, APAC. It gets the tailwinds of Latin America more. So those benefits, some of that accounts for some of the differences you see there. But we expect that to continue to grow, but we expect B2C to accelerate. So, you know, when you get into, like, what percentage of whatever the future is, I think we expect, you know, both of them to grow well. There's lots of growth ahead for B2B, and obviously, that delta's been more dramatic during this transitional time, but B2C will accelerate, and both will be strong.
It's a broader question, but how do you think about having a B2B offering like this, and what it does for your competitive positioning in the broader travel landscape? What it does for supplier relationships, and how do you think about the competitive landscape of others maybe trying to do B2B evolving going forward?
Yeah, look, we think we're the best at it, and we're also the cleanest hands at it. You know, the B2B world, the wholesale market, is littered with all kinds of rate abuse and people selling things they weren't intended to sell, et cetera. We have very strong relationships with our biggest hotel partners. I was just with our biggest one yesterday. We're doing more business of their business than we ever have by a significant margin. We're helping them control rate abuse and making sure that their product ends up where they want it to end up and not in errant hands. And that's created... That, you know, it's one of many things that has created the value of this partnership, beyond just fighting over the last penny on the table. So we've been able to create better relationships.
We've been able to create deeper relationships, where we sell more things to them. This happens to be a partner who uses our Optimized Distribution, which is a wholesale product we have. We have most of the top 20 chains in the world, either using it exclusively or testing it, and we continue to roll that out. But we've also commercialized our fraud capabilities. We're working on commercializing our service capabilities. So there's a lot more opportunity for us to help our partners do more with their business than just, "Hey, give us your inventory, and we'll resell it for you.
Understood. Okay. We are at a technology conference. I have to ask about AI. There's a couple different angles to this question that you can come at. I think as I've talked to CEOs and CFOs this week, there are companies that are looking at investments they're making in AI and generative AI that can change their go-to-market strategies or their path to connection with the consumer or the enterprise. And then there's also an inward-facing view that's emerging of what it can do to drive process efficiencies-
Yep
-internally. How are you thinking about making investments behind AI more broadly and positioning Expedia within the broader technology shift, out there on the landscape?
Sure. So we've been at the forefront, I think, of AI, machine learning and AI in travel for a while. Even during this time of transition, even during... We've been very focused on using machine learning and AI to drive content, to drive what pictures you see, to drive other things. Now, we are in the process of plumbing that through our entire experience, and ultimately, that will lead to personalization, which is, you know, nirvana, what we're going for. But, you know, at its core, that is the starting place of AI. It's not large language models, right? It's all those pieces that we had our own large language models for our virtual agent and our service, which has saved us literally hundreds of millions of dollars.
So we've been at this a long time and have a fairly mature capability. Now, still engineering work to put it in every experience, put it everywhere. Then you add to that large language models. We were the first to use ChatGPT in the front end of our app. We were the first to have a plugin in ChatGPT, but we have been, since then, working on looking at how we can use large language models to enhance the entire experience, including, as you say, our employee experience. So for example, we're looking at using it to help service agents summarize their service call, which is a time-consuming exercise, post-service contact, to write all the things that happened, and if you have large language models, you can do it more quickly, more easily.
We're looking at adding those models into, you know, experiences when you're searching, so that instead of just, you know, doing a filter or looking at the reviews from all the people underneath it, you could say, you know, "What do people think, what do families think of this place?" Or, "How's the pool?" And it would suck up all the information and give it to you in a summary instead of, like, you going through 1,000 reviews. So there's lots of opportunities in that. We're just staying on our front foot about it and trying to explore as many opportunities as we can to see what it does. So far, there's no silver bullet. It hasn't upended the market. It hasn't changed our experience.
But some people really like it, and we're learning a lot about how to help people through the process, how to help them when they get stuck in these discovery conversations and don't know where to go. And then again, our goal is to move them into our own features. I mean, those are good features, but also we've introduced a bunch of features, as I said, comparison shopping, we have collaborative shopping, we save all these things for you that you've talked to ChatGPT about. We save them, and then you can go look at them and compare them and, you know, work with your spouse or your friend or whatever to, you know, plan a trip.
Those are all the incremental features that we offer that go beyond just, "Hey, isn't AI cool and can answer everything?" When you get into the real planning stages of travel and shopping stages, you know, you need what we have, and we think we've got the best and are introducing the best features around that experience.
Okay. Maybe talking a little bit about how the marketing funnel or the go-to-market strategy continues to evolve. You talked about the launch of the loyalty program earlier in your-
Yeah
... Your first answer. I think as I talk to people in the travel industry, there's always a desire to build better brand awareness, build more direct traffic, maximize performance marketing dollars from an ROI standpoint. Talk a little bit about learnings and evolution of marketing and putting yourself in front of the consumer over the last couple of years, and what you're trying to put in place to sort of maybe bend the curve or arc marketing spend and path to consumer in the years ahead?
Well, I think there's, you know, there's a number of stages in that game, if you will. There's, you know, there's the top of the funnel. How efficiently do you get people into the top of the funnel? How do they convert out of the box? But, oh, and a lot of the game, because this was an arbitrage-driven market for so long, and that's the very thing we want to change, a lot of the game was, okay, that's it. Traffic conversion, end of story. And a few people stick as they... You know, we—I used to joke with our head of brands, who I brought in, that we didn't have a funnel, we had a tube. Like, you just went through and maybe some stuff stuck to the sides, but, like, it wasn't a funnel.
Our goal is not only to make conversion better, do all the things at the front end, be as efficient as we can. You know, we were multi-brand. All our brands competed with one another, had their own performance marketing teams, did their own things, measured differently, did everything differently. Now, it's one group. They spend all the money. They do it in a uniform way. They do it across brands. They optimize for multi-brand, et cetera. And but getting them in efficiently is one start, then converting them. So that's how good is the product at converting? And then how good is the product fundamentally, and do they stick? And that's not only like, is the... Are the features cool? It's like, are you signed in? Are you seeing member discounts? Are you getting your loyalty cash and all of those things.
Because, you know, if we can lower churn, meaning, like, people who stop being active customers over, say, an 18-month period by a few percentage points, that's worth way more than an extra basis point of conversion or an extra... So it is a multi-storied story, and we're working all of those pieces, but we believe ultimately product wins, and for us, product is the digital product, and hasn't been a very high bar in travel. You know, it's been a bunch of glorified listing services. We've introduced a lot, some features already, but a lot more coming that will make that experience way better. It's also loyalty. It's also service. It's, you know, it's everything that differentiates and makes a sticky customer experience instead of just a transactional arbitrage, which there's no winner in that game-
Right
... and everyone races to the bottom.
Right. Understood. Sticking with the concept of loyalty, I think one of the questions I get a fair bit from investors, and giving you the opportunity to sort of lay it out, is what needs to be invested to get One Key and loyalty off the ground, and then how should investors think about the yield or the output from One Key as you move past 2023 and into 2024? Because I think there's always-
Yeah
... elements of how much investment needs to be made, what's it gonna do to your business model shorter term versus the duration to get a return from it. How, how would you characterize what you're trying to do from investing behind loyalty and then what loyalty will deliver to you as a platform?
Yeah. So I would say simplistically, first of all, we look at our spend on loyalty, marketing, merchandising, discounts, et cetera, as one big pool of money. And we wanna spend it as efficiently as we can to buy and keep customers and build, you know, basically high CLV customers who stick around a long time. And so for us, it's not like, okay, we got to really amp up right now to, you know, stick the landing, and then we're gonna do this. This is just a gradual build. And you know, more and more, we're signing in more people. We're getting them into the right product, which is app, if we can get them there. The product does that by itself. We're pushing... You know, we're also marketing intentionally around that.
We're getting people into the product, we're getting them to experience the benefits, and then they have OneKeyCash, and now they can shop anywhere, do anything, and we, you know, one of the many things we have done during this whole transformation is get to one unified messaging platform. We had, like, 17 of them, and they didn't all work very well, and they went. So now we can use CRM and tell every Vrbo person that there's a sale over on Expedia or vice versa. We can move people around. We can show them what they need to see. So for us, it's just. I would say it's more of a gradual build. It's a sticky product. It's the best-in-class rewards program, we believe, in travel. It's additive to airline programs, cruise programs, you know, pick your car programs. It's all additive, credit card programs.
You know, you still get ours, right? And all of that, we believe, accrues to the benefit because what you're trying to do is get customers to know that the best experience, the best prices, the best value, the best service live at Expedia, broadly defined. And so that is our set of goals, and One Key is just a piece of that. It's not a silver bullet. It doesn't live by itself. You can't have One Key and a shitty product and expect a great result. You have to have a great product and a great rewards program and great service and do all of those things, and that's what we're focused on.
I know it's early, but I'll be remiss if I don't ask: Are there any early learnings for One Key, or is it still way too early to have any sort of takeaway?
Oh, there's lots of learnings. I mean, there's nothing determinative, I would say, but we've seen a lot of cross-shopping already, people spending across brands, which we're excited about. We've organized all of them into one identity, which was really impactful. Seems like a silly thing, but you could have had used a different email on Vrbo than you used on Expedia, and we don't know if you're the same you, and now we've consolidated all of that. We've opened a bunch of new accounts, but I wouldn't say there's some, like, dramatic, you know, hockey stick in signups because of One Key, and they saw the ad and they're all... But we've had consistently good signup, we've had consistently good growth, and we're seeing people cross-shop and exhibit the behaviors we want.
Okay. The other big debate coming out of 2023 that we've been having with management teams at the conference is looking out over multiple years and thinking about how to strike the right balance between growth and margins. You know, you've been through a replatforming cycle. You're obviously trying to position the company for a certain level of growth longer term.
Yes.
How do you think about striking the right balance of investments for growth versus expanding margins against maybe how you think about the structural margins of the business longer term?
Yeah. So first of all, I'd say, you know, again, as you and I were talking, like, we're in way better shape than we were in 2019 in terms of margins. But we believe we have a lot of opportunity, and the way we've framed it for the company is, I believe we should be a Rule of 40 company, and that is my way of saying we're gonna balance growth and margins. We're not gonna go all in on growth and blow up the bottom line. We're not gonna go all in on the bottom line and leave growth to the other guys. We believe with where we are technologically and all the product offerings I mentioned, that we can drive both. Now, within that, different pieces add to that pie differently. So B2B is already a Rule of 40 business and doing great.
Certain geographies are Rule of 40 business, doing great. Other ones may be growth engines, but not bottom-line engines, and vice versa. So we have some work to do to put all the pieces together. But broadly, you know, we believe we've been at the sort of top of an investment cycle, you know, technologically, et cetera, to get over these humps, to get through this transition. In general, we believe our expense base can be flat to down over time, and we believe we're going to accelerate, you know, growth. So for us, that is the way we are benchmarking where we ought to get to. I think it's possible we could do better than that, but that's really a way of balancing for us. So we're not...
You know, if we had been all in on growth, we would've given up the bottom line and gone even faster through our transformation. The numbers would've been worse, you all would've been losing your minds, but we would've gotten through the technical transformation sooner. Conversely, we could have dragged this thing out for 20 years and never gotten it done and nursed the bottom line a little more and everything else. I'm not saying we were perfect, but we've managed to grow the, you know, EBITDA substantially since 2019. We've managed to grow the top line, and we've done that while doing all... while changing the whole engine. So we think we're set up now to accelerate, and that acceleration with sort of the end of our investment cycle in technology and everything else, should create even more separation as we go forward.
Got it. Maybe just one last follow-up on this area. You know, as you think about lapping some of these investments you've made and coming out of that cycle versus continuing to drive efficiencies in the business, which is the bigger driver going forward? How should we think about some of the puts and takes or variables that could compound margins in the years ahead?
Yeah. So I think, look, we've talked about this before. You know, there are businesses that we... I won't say we left for dead, but have become, you know, sort of shrinking annuities-
Right
... as we focus on other places.
Yeah.
Those anchors, those drags, are getting smaller and smaller over time.
Right.
Right? There are a bunch of noise in COVID that distort numbers. For example, insurance was bananas. Like, we sold a ton of insurance 'cause people were afraid that things would go wrong. Vrbo may have been abnormally inflated because people were escaping one another. Those things this year have basically normalized, and as we get into next year, you know, comps won't be perfect. The quarters are a little screwy. We still had the weird Omicron, anti-Omicron quarter in the beginning and all that stuff, but things will normalize out, you know. Our growers are growing really well, the shrinkers are getting small, and as I said, we're now about to, you know, basically stick a turbo booster under the growers with all the new capabilities that we will add.
So, you know, I think that growth will be driven both by product improvements, by geographical expansion. Certain lines of business will come on stronger or lap a tough comp and appear much stronger than they were maybe in the noisy post-COVID time. And all of that will compound to a lot of growth. I actually think we'll see it across lots of categories and across lots of geographies, because many of the things—some of the things are specific to, you know, maybe we'll roll a new product into a new country, but a lot of it is like personalization writ large, which goes everywhere, or new features that we can deploy everywhere at the same time, and that just hasn't been possible in the past. So all of that opportunity, I think, will drive, you know, it will drive broad growth across many things.
It's not gonna be like Japan's the answer or something. That's not where we're headed.
Got it. Understood. I think you've been clear, and we typically talk about this on earnings calls. I almost feel like I ask this every quarter, but capital allocation, more broadly, your priorities.
Sure.
You know, in my view, you've surprised the market positively with the level of buyback you've done in the more recent past. How should we be thinking about your top priorities for capital allocation when you look at your balance sheet, you look at the free cash flow you can throw off in the coming years, how to strike that right balance?
Yeah. Well, I'll go back to where I started, which is, you know, we sit today with fewer shares than we had in 2019. Much more EBITDA, and trading at what we consider an absurd multiple. So as long as the market wants to sell us their stock, you know, we're pretty open for business on that. I don't think there's a better return we see. Obviously, we're always looking at, you know, how to invest in the business, but we have ample capital to do that. You know, maybe there's an M&A thing occasionally, but as you and I have talked before, we did a lot of that before.
Yeah.
That's what made us so complicated. We're not... You know, we're gonna be really principled about that, I would say. And then, you know, we may, as we've guided to, we may bring down debt over time, or, you know, we'll grow into that, but who knows? We might do a little bit there. But, you know, right now, we feel like we're in a great spot, stock's super cheap, and that's why we've been as aggressive as we have, and as long as people wanna sell it, you know, we'll probably keep buying.
Okay. In the last minute we have, we've talked about a lot today, but bring us back to your key priorities. When you think about investing in the business, executing against your roadmap, and what's gonna produce those outcomes of revenue and margin, if we're sitting in here in a year, what would be your biggest priorities over the next 12 months that we'll be revisiting in a year?
You know, I think, I think a lot, you know, be a broken record on this, but a lot really lives in the deployment of all the work, the sort of payoff of all the work we've done on the technology side. This is our 12 months, if it's 12 months from now that I see you, where we are going to deploy faster, get more features out, and see the consumer benefit. And I don't mean just for the business, but the consumers will feel the benefit in the product, have a reason to stick around, have a reason to be more involved in our product, to come back, to come back direct. I think that those will be drivers. I think, we, you know, we gotta prove it through the numbers. It's gonna come in growth. It's gonna come in margin expansion.
B2B is gonna be great. That's not—we're not worried about that. That's in a great spot. B2C is set up to do some really great things and regain ground in a lot of markets where we've been quieter. And I think get the long, you know, the long-awaited benefit of all the work we've done behind us in North America and our biggest markets where, you know, where we've done great, you know, spade work, but now we have to get the payoff. And that's really when the consumer feels it in the experience, and that's what I hope we're talking about then.
All right. Well, we look forward to that. Peter, thanks again for being part of the conference.
Thank you.
Please join me in thanking Expedia for being part of the conference this year.
Thanks, everybody.