Description

Elevator Pitch

EXPE is a particularly asymmetric bet on a dramatic recovery of pent-up demand for leisure travel post-COVID.  If you believe leisure travel will not come back with a vengeance or that the vaccine will fail/COVID will mutate, this is not the idea for you.  In exchange for your lower rating though, I would appreciate evidence behind that view in the comments.  

While shares today are above pre-COVID highs and the enterprise value is even higher, I believe the “bust” and imminent “boom” in leisure travel have obscured as well as expanded the opportunity for a significant restructuring at a business that has historically dramatically underperformed its key peer BKNG.  To put things simply, while I believe that consensus expectations for revenue not returning to 2019 levels until 2023 or later are far too conservative, the real opportunity in EXPE comes from the combination of significant operating leverage (80%+ GM’s) and a cost restructuring program that was in progress under a new CEO pre-COVID being accelerated and expanded during COVID, creating massive operating leverage which could result in post-COVID EBITDA beating consensus by 50% or even meaningfully more.  Further, many of the changes not only should improve EXPE’s cost structure but also their competitiveness, potentially driving improved market share, further exacerbating the operating leverage-driven upside.  Finally, we have all witnessed (perhaps in awe) the market’s propensity to simultaneously increase valuation multiple while estimates increase with COVID/WFH-beneficiaries.  I suspect EXPE could enjoy multiple expansion on top of significant estimate upside, driving very large upside.  Very simply (and I will provide more detail later on), I think it’s feasible that if “post-COVID run-rate” travel (IE 2H’21 or 2022) is only 5% above 2019 levels, when combined with the operating leverage and cost improvements, that EXPE could do $3.8bn of EBITDA (66% above consensus for 2022 and 200% above consensus for 2021).  If the shares trade at 11x EBITDA (a heavy discount to the market multiple, BKNG, and no multiple credit for Vrbo), they could be worth ~215 for 65%+ upside.  While this write-up will focus on the operating leverage and opportunity for rising earnings expectations, I would also note that you could make a very large valuation upside argument on a “sum of the parts” basis using an ABNB-style valuation on EXPE’s VRBO.  Such an analysis would indicate that by valuing Vrbo at even a 50% discount to ABNB on 2019 revenue or bookings, you are buying EXPE at ~5x EBITDA or lower.  

Business Background

Shoe’s 3/30/19 writeup provides an excellent business overview and industry backdrop: https://valueinvestorsclub.com/idea/EXPEDIA_GROUP_INC/2332020226  My goal with this post is to provide an update on the significant changes in management and cost structure since then that create a particularly interesting situation today.  While I’d recommend you read his excellent piece, I’ll offer a quick 101 on the business as well.  

EXPE is the second largest online travel agency after BKNG.  You go to Expedia or Hotels.com or Orbitz or Hotwire (all EXPE’s brands) to book your hotel, airline, etc.  EXPE takes a commission (~10% take rate blended) but a much higher on hotels than air and also varies based on the merchant vs agency model.  Pre-COVID, travel was an attractive secular growth market (experiences over things, growing wealth of emerging markets/china) and online travel agencies were gaining share from brick and mortar travel agencies.  EXPE’s biggest competitor (BKNG - previously PCLN/priceline, has an ~$80bn TEV vs EXPE’s ~$26bn TEV) was a growth/quality darling for many years with a healthy valuation multiple – secular growth of internet penetration growing within secular growth of travel, high margin, low capex business, big moat from network effect (more hotel supply -> more customers -> more hotel supply).  EXPE was frankly always the under-managed, red-headed stepchild and still appears to be that way today.  Their issues range from being more exposed to less attractive markets (air, US – which are less fragmented than European hotels where booking.com was the killer) to a major lack of integration on the back end of their different brands as well as cultural issues.  To put a finer point, EXPE’s EBITDA margin in 2019 was 17% vs BKNG’s was ~40%.  Some of that is due to scale, but our work with former employees indicates there’s a massive amount of bloat and inefficiency as well.  

Over the last few years, the OTA’s have de-rated on a handful of major concerns: 

1. Disintermediation by hotels – hotels don’t like paying a 10%+ take rate and have made efforts to encourage customers to book direct via their loyalty programs 

2. Competition from Google de prioritizing EXPE's organic traffic

3. AirBNB/alternative accommodations taking share 

Today, BKNG and EXPE both trade at ~13x 2019 EBITDA.  While the above issues are real, travel is still a growing market and these are still relatively high quality (high margin, low capex) oligopolies.  Historically EXPE has converted >50% (in some cases >75%) of EBITDA into FCF.  

2019 Issues, CEO Change, and 2020 Business Transformation 

In late 2019, EXPE faced a considerable string of setbacks:

• SEO headwinds plagued the entire travel space as previously free “organic” traffic became paid 

• Vrbo had particular challenges 

• IT transition to cloud came in nearly 100% over budget 

In response, Chairman Barry Diller (of IAC, previous owner of EXPE) fired the CEO and CFO, expanded the buyback authorization from 9mm to 29mm shares (~19% of the company), and installed himself and Vice Chairman Peter Kern in control with an intent to accelerate revenue growth in 2020 while improving margins.  

Just as new mgmt. began to detail their plans for transforming the company, COVID hit and essentially brought the business to a grinding halt.  I suspect investors for the most part have been more focused on the complete lack of revenues more than the details of the dramatic ongoing overhaul in the business.  Further, I’d highlight that the nearly complete shutdown of demand provides essentially a once in a lifetime opportunity to do a full reset of EXPE’s cost structure and technology infrastructure under a new CEO:

“But since we've had these lower levels of throughput, we felt the unique opportunity to try to push through significant technology change and things that might have taken months and months, or years, to push through and put them on an agenda to push them through much more quickly. So the company is just way more focused on changing, changing quickly, and getting to the other side of a lot of what have been thorny technology issues as rapidly as we can.” – Peter Kern, Q1’20 Call 

On the first earnings call (Q4’19 on 2/13/20), just as the world was about to begin to understand the implications of COVID on travel, new mgmt. began to detail their plan to rip out ~$300-500mm of cost savings (15-25% of 2019 EBITDA) with more efficient marketing spend and greater collaboration across brands and business units driving double-digit 2020 EBITDA growth.  Within days, EXPE would announce an ~12% headcount reduction, which on ~3k jobs at ~$100k implies ~$290mm of cost saves alone.  By their latest earnings call (3Q, Nov 2020), EXPE has increased their cost cut guidance to $900-950mm, with ~$550mm already executed on at a run-rate.  Below I detail the buckets of cost reduction, and most importantly, what’s not included in it:

• Fixed Cost: $700-750mm on a base of ~$3.5bn of 2019 fixed costs 

• Primarily personnel/headcount as well as procurement, tech licenses, real estate footprint

• Some of these savings will be partially offset by inflation 

• ~$550mm run-rate already achieved 

• “So, first, on fixed cost bases, as you'll recall, we started the year targeting $300 million to $500 million, in annualized savings. And we were tracking ahead of that amount, as of our last call. Since then, we've identified additional head count reductions in certain areas and incremental opportunities across the P&L to drive efficiency, in areas like real estate and software and licensing. We are now targeting $700 million to $750 million in annualized run rate savings, compared to our 2019 exit rate. And we've already auctioned over $550 million. As you project this forward, please keep in mind, we'll have annual increases in the remaining cost base, and also make targeted investments in some areas. But overall, we've made great progress on fixed costs. And longer term, our platform operating model will position us, to scale the business far more efficiently going forward.” – Q3’20 Call 

• Variable Costs (based on 2019 revenue levels): $200mm on a base of ~$1.6bn in 2019 variable costs ex marketing

• Lower transaction fees and improving economics on virtual cards used for merchant payments 

• Extend conversation platform to handle more customer calls through self-service and virtual agents to lower customer service costs 

• Optimizing cloud variable spend 

• Interestingly, some of these cost improvements could also materially improve the end customer experience – customers don’t like waiting on hold if they can get what they need done via a simple chat interface and it obviously saves a ton of expenses as well

• “But I think the one that has the largest opportunity for us is on the conversation platform. We are historically primarily a phone-based contact center-type of conversations with customers and with our supply partners as well. And with the technology that we've developed, we have the ability to move a lot of those either to self-service or virtual agent. And on the virtual agent side, we're able to get more – service more customers, if you will, per agent. And so, both of those add leverage to the system.  And we've really started the roll out. In fact, we've gotten good NPS scores and good returns, if you will from doing that. And it's really a process of rolling that out, making sure that we have more and more use cases, we get it embedded into the right flows into the sites, into the mobile apps as well. And I think that is likely the largest opportunity. And then credit card costs and variable cloud as well are meaningful, but I would say that those two are a distant second, if you will, after the conversation platform opportunity.” – Q3’20 Call 

• “The NPS scores have been strong on it. People generally like to deal with the machine if they can and just get it over with, and not have to talk to a person. It's not true universally, but that seems to be true for most people. And we feel very good about it. So it's scaling up.” – Q3’20 Call 

• “We get confidence in those that we get better line of sight in. And then also obviously, we've actioned a fairly large percentage of it. So, yes, it's the $700 million to $750 million on a fixed cost basis, and then the incremental $200 million on the variable costs of sales, which then approaches, to your math, approximately $1 billion in savings. Now you mentioned it, but I just want to reiterate it as well. That is on the 2019 exit rate, if you will, so that those numbers presume that we're back in a range that is approximately at the 2019 levels.” -Q3’20 Call 

• Shockingly, these cost savings above of ~$900-950mm do not include savings in direct marketing, where EXPE spent $5bn+ on ~$12bn of revenue in 2019! 

• While the quantified costs alone are a giant opportunity to improve profitability themselves, we actually believe this bucket could be even larger 

• Historically, all of EXPE’s different brands operated in silo’s (see consultant comments below)

• Not only did this result in duplicative infrastructure and people costs, and a lack of shared best practices, it resulted in different EXPE flags bidding against each other

• In an auction for digital ads, unnecessarily bidding against oneself creates a non-linear impact on costs 

• “And I'm excited about what we're going to be able to see when we can see the granular level of detail on profitability by customers, by geos, by everything, which we haven't had the granularity we like, and that has made us, I would say, a blunter instrument than we'd like to be. And we believe there's significant good guys from getting us all wired together. And that again is why we're willing to make short-term trade-offs to do that important work to get that done, but we haven't seen any early returns yet and it will be a little while still.” – Q3’20 Call 

• “I would say on the performance marketing side, you are correct. We have talked historically about bringing more efficiency out of it, getting our return on marketing better, more precise, et cetera. The problem was I think that was to, some extent, wishful thinking because we did not have all the data, all the tooling and all the approaches synchronized, if you will. We let our brands compete. That has some dissynergies that never were quantified, but certainly existed. We did not have the benefit of all the data, because each brand had its own data and on and on and on.  So, I am positively optimistic that when we have all data flows right and we have all the algorithms rewritten for that and when we have the tooling right, there should be significant upside for us in actually getting – bringing out that return that you've heard about over these many years” – Q3’20 Call 

• “So my big push has been, if we have a brand, frankly, that maybe none of you have heard of, like Wotif in Australia, that is our strongest brand for the moment in Australia, then we need to concentrate on building that brand and not worry about whether it's Expedia or Hotels.com or anything else.  Likewise, Vrbo has a different brand, a different company that acquired in Australia that we're not going to change that brand, because it's a strong local brand and we should push into that. We have historically had this record of, okay, we have an existing brand or we bought a brand, we're also going to push Expedia into that market. We're also going to push Hotels.  And that kind of, I would say, took away the value of multi-brand, because it didn't allow us to optimize for each one. So that's why we're doing the segmentation work. That's why we're trying to figure out what the proposition is for each brand. Some brands admittedly, we have historically run for more profit, whereas others we have pushed.  We're looking at that whole kind of fleet of options and driving the best result by country, by brand that we can. And that may mean, we close some brands in some countries. That may mean, potentially, we close some brands full stop, but we have no intention right now to do that, but we are looking at the whole thing and trying to optimize for it all. But we think, in general, having more gives us the opportunity to do more, if we do it smartly.”- Q3’20 Call 

• “This is about building better products, doing better brand and direct marketing, better merchandising, which has not been a great strength of ours and, in general, using the data we have, which again have never been pulled together as a company and has only been together for the last few months to power our ability to do all of those things: to understand our customer better, to serve them better, to serve up choices for them better, everything.  So we believe we have huge opportunities on that front. And we believe that we've been overly reliant, and we've heard this before, on performance marketing. We've not been disciplined about it. We've chased on healthy growth over the years. And Google and other performance marketing channels have tried to disintermediate us, and we've made some not terribly smart choices along the way.  We believe that this reset of the virus will give us an opportunity. I mean, we've been talking about this for a while. But as we wade back into the marketplace, to be much more disciplined to only chase real growth, real valuable growth, healthy growth, and not be stuck chasing performance marketing and entering into dis-economic auctions. So we intend to be much better about that. We intend to keep those customers longer. We intend to serve them better and keep those direct relationships going strong.” – Q1’20 Call 

Is the magnitude of transformation opportunity as large as the company contends?  

Below I present some excerpts from calls with experts/consultants.  Some of these are actually in the public domain via a subscription expert network that I suspect many of you have access to the full transcript.  If posting these excerpts are frowned upon, please do let me know and I apologize and will remove.  

“I think the biggest thing in my mind is that the prior strategy, Dara's strategy just made no sense whatsoever. And I came in from McKinsey, and within like a month of looking at the business from the inside, I couldn't really tell this from the outside, but I honestly thought of leaving after a month because I thought, like, this is a company that has not been doing the right thing for years.  Just the strategy was explicitly that the brands would compete with each other and that through competition, they would become stronger. And it was just a very myopic view as though other competitors did not exist and that we can afford this terrible inefficiency. So like the President of Hotels.com was not invited to the strategy, the annual strategy planning of the President of Expedia.com, specifically because they were competitors, and they didn't want that competitive information out to each other.  So like you mentioned it, the biggest cost is probably on the marketing side, just bidding up their own keywords, bidding against each other. And I think I was never able to get data to support this, but I was running down a hypothesis that we were actually paying multiple times for the same shopper when Booking would only pay once.”

“So you can imagine this customer behavior. They go to Google, and they might right-click on multiple links. And they might right-click once on Booking, and then they might click on Expedia, Hotels.com and Travelocity, not realizing that they're all the same company and all the same inventory and largely the same prices. So we've just paid 3x for a customer that maybe we get them, but still, we paid more than Booking would have if they got them.”

“I had a discussion once with the President of Hotwire.com, which is a relatively very small brand. And she had come from Hotels.com, and she was saying, I don't know what my SEM team is doing. Like we're start-up level sophistication here. They're trying to figure out stuff that is really elementary.”

“I've got a really mediocre, tiny SEM team, and they're figuring out stuff that Hotels.com figured out long ago. Like why can't we just take what Hotels.com is doing and apply it to Hotwire? And the answer was, well, because Hotels.com has no incentive to work with you, to spend any time with you in doing that. And so that's one example of duplication.  But then if you think about the SEM team at Hotels.com and how sophisticated they were with data scientists and PhDs, and then that is completely duplicated at Expedia.com where there's a completely separate team, really no sharing of best practices. So now that there's one head over all the marketplaces and has been for now like 9 months, but still, that person has to look at those teams and say, "Okay, we really only need one team."

“And like I did an analysis once where I stripped away everything at Expedia and Booking to try to make it apples-to-apples. And ultimately, I can't remember the exact numbers, but basically, we took $3 of marketing expense and turned it into $6. And they were trying to get it to like $12 or something like that, maybe it was $9.”

“Hidden Asset” Upside

 I’m loathe to call this a significant part of my thesis as everyone knows that EXPE owns Vrbo and that ABNB trades at a very healthy valuation.  No one will care until they do and I have no view that EXPE will or should monetize Vrbo.  That said, I’ll allow you, the reader, to pick your poison for reaching a target valuation.  Additionally, I would note that Barry Diller has a track record of monetizing assets at IAC.  

VRBO did ~$12bn of alternative accommodations bookings in 2019 vs ABNB at ~$38bn.  In 2020, VRBO actually only shrank 24% vs ABNB shrinking 40%, implying that VRBO actually gained share in 2020.  Vrbo is more focused on whole homes, which obviously resonated well during COVID.  It remains to be determined whether Vrbo can retain this fortuitous growth in mindshare.  

“I do think that to your question specific to Vrbo, we are getting a lot of people experimenting with and hopefully being very happy and satisfied with the alternative accommodation experience and in particular for us, Vrbo's main emphasis on the whole home.  So I think there may well be people out there who are not as familiar either with our brand or with the experience, who are now getting to experience it and having very satisfying great trips. And I think that's a great opportunity for us to create long-term customer stickiness and value.” – Q2’20 Call

ABNB, with an ~$100bn EV, trades at ~3x 2019 bookings and ~24x 2019 revenue.  Even taking a 50% discount to these multiples, Vrbo would be worth ~$16-17bn or ~60% of EXPE’s current EV.  At full parity, Vrbo would be worth $30bn+ and thus more than EXPE’s entire EV.  Vrbo currently represents ~15% (~$280mm) of EXPE’s 2019 EBITDA, so if you “stub” that out, you could argue we’re buying EXPE for 2-5x 2019 EBITDA or even for free.  I present the math below for fun, but again – the crux of my thesis is that there is a massive amount of “pent up” earnings power.  

Additionally, Vrbo currently monetizes at an ~10% take rate vs ABNB at an ~14% take rate, so one could argue it is also under-earning.  RE Vrbo Take Rate: “There a is gap between us and Airbnb in particular, and it's something that we do feel that it's – it gives us a bit of an advantage with consumers, but it is something that we are looking at. It is something that we test. We do think there are opportunities to increase monetization over time. But I would say there continues to be a gap, we are actively looking at that. We are actively testing it. And I do think that there is upside in our monetization over time.” – Q3’20 Call

I would also note that EXPE’s B2B business may be under-appreciated as well.  While I don’t have the economics broken out as well for the purposes of spreadsheet heroics, it’s worth noting the quality and strong growth of this part of the business (which does represent ~$450mm in 2019 or ~ 20% of the business), again via consultants: 

“ So that business is like the shining star of the business. And I used to say, like, "Hey, if we can't get our act together on the consumer side and figure out how to actually be a customer-centric company, then our future is B2B and B2B only, which is not as big a business.  (…) But that B2B affiliate business, it's an amazing business and was growing like crazy. It's got probably the most capable leader at Expedia, Ariane Gorin, and was growing by leaps and bounds.”

“So for Expedia, several years back, I mean it was a stroke of genius. They were like, "We've got all of the supply. We're spending the money to acquire the supply anyway. And we're doing that for the OTA business, for our B2C business. And the B2C business is funding that activity. So if we were to sell at B2B, we're sort of funding our competitors, but like what do we care? We're taking a cut of it. And if it gets booked through a competitor, we'd rather take a chunk of it rather than nothing.  (…)  And so there are thousands of affiliates and then some very large programs like Expedia runs Amex's travel program for their credit card rewards. They do the same for Chase and some other really big credit card programs. And those are huge. I mean Amex does, I think, like $4 billion of gross bookings, which is like 4% of Expedia's bookings, and they're just a credit card company.  They're also kind of like a reasonably sized OTA. And so that's a great business for Expedia. It's low cost. They need a sales team, and they need some technology to make these APIs, but the technology is not anything like running the OTA side.” 

“We're also heavily interested and excited about the opportunity in the B2B side and in helping our supply partners. We've talked before about our Expedia Partner Services business. We are a leader in this space, and we feel very good about our opportunity here. In fact, we believe we can grow share here during COVID as we help our B2B partners come out faster and help more partners over time. We have expanded our partnership on the supply side with Marriott in terms of their wholesale distribution partnership. And we are extending that partnership, similar partnerships to optimize distribution with other chain partners. And we think that's going to be a great opportunity to help our supply partners and also build our B2B business.” – Q3’20 Earnings Call 

Valuation, Risk/Reward 

Let’s try to put this all together.  There’s obviously massive, uncontrollable macro drivers in the background, but my goal is to isolate the skew in earnings power vs current expectations rather than nail an exact number and exact date.  Below, I break out 4 discrete drivers: stated cost savings, unquantified cost savings (direct marketing), magnitude of revenue rebound vs 2019 levels, and fixed cost inflation.  Below, I show my “base” case – success on $900mm of cost saves,  $300mm of performance marketing improvement (5% of spend), and revenue 5% above 2019 levels.  This gets to ~$3.8bn of EBITDA, 65% above 2022 consensus.   

Acknowledging the imprecision of this exercise, below is a sensitivity for a bear case (fixed cost reductions only, revenue -7.5% below 2019 levels, 5% fixed cost inflation despite revenues below 2019) which gets to just below 2022 consensus of ~$2.2bn of EBITDA.  I also show a range of “bull” cases where performance marketing savings are 5-7% of 2019 levels and revenue ends up 7-12% above 2019 levels offset by 5-10% of cost inflation.  I’d argue that the higher the revenue growth, the lower marketing savings and more cost inflation there is, so these cases don’t really move the final number that much from $4.1-4.4bn (80-90% above consensus), but rather just show the different permutations and moving pieces to get there.  

Finally, I’ll leave it to the reader to pick a multiple to apply.  EXPE has historically traded ~9-13x EBITDA at a healthy discount to BKNG in the mid-teens.  If they are actually getting some momentum in terms of running the business better, I’d argue that gap should close a bit, and I’d also argue that with ~20% of the business from Vrbo, that that should drive a higher EBITDA multiple as well.  Nonetheless, I show a range of multiples from 8-14x below on $2.1bn (bear case) to $4.5bn (high end of bull case) EBITDA.  I’ve shaded 3 sets of numbers – a “bear case” that represents 10-11x on $2.2bn of EBITDA for 20-30% downside, a base case that represents 10-11x EBITDA on ~$3.7bn of EBITDA for 43-60% upside, and a bull case that is 11-12x on $4.1bn of EBITDA for 80%-100% upside.  If you want to really pound the table, you could argue a much higher multiple using the Vrbo/ABNB analysis above.  I would flag that there has been significant share dilution YTD from warrants issued to Silver Lake and Apollo, so I am using a share count of around 160 rather than the ~140 shown on BBG.  

Lastly, I should note that while my focus is on the post-COVID opportunity, I would be remiss in not pointing out the current pressures (booking -90% YoY in Q2’20 improving to -69% YoY in 3Q’20) that the balance sheet is well positioned now to survive to the other side, whenever that is, with $4.4bn of liquidity and cash flow neutral as of September for the first time since February.  

Key Risks 

• EXPE has a weak history of execution and has historically underperformed BKNG 

• Aforementioned secular risks around hotel loyalty programs, Google, AirBNB

• COVID-related travel disruptions and delays in vaccine roll-outs

• 4Q/1Q results likely rocky given resurgence in COVID

• EXPE’s adjusted results are relatively low quality (~$240mm of SBC, $200mm of amort of intangibles such as capitalized R&D) and this is a reasonable argument for a discount to BKNG

Key Catalysts

• Travel rebound results in massive revenue growth and beats 

• Increased disclosure on Vrbo or any value unlock 

• Vrbo maintains momentum post-COVID

• Achieve or raise cost savings

• Further detail on marketing cost savings 

Appendix: Is there really pent up travel demand? 

I suspect this is a debate that will come down to anecdata and gut feels.  I can’t put forth any hard data, but if 25% of people take 3 vacations in 2022 instead of the 2 they usually took in 2019, that’s +12.5%.  Doesn’t sound like a huge stress.  Here’s some, obviously biased, industry trade rags talking about pent up demand: 

• “JPMorgan Chase has agreed to purchase one of the biggest third-party credit card loyalty operators in a bet that pleasure travel will rebound sharply after the coronavirus pandemic subsides, CNBC has learned.”  https://www.cnbc.com/2020/12/28/jpmorgan-is-acquiring-a-major-credit-card-rewards-business-in-a-bet-on-travel.html

• “JetBlue Airways VP-network planning Andrea Lusso told the virtual Routes Reconnected conference. “It really has to do with customer confidence. There is pent-up demand out there.” “There is pent up leisure demand. Folks want to travel,” he said. “It will take a little bit of time. We’re hopeful that by next summer we’ll be back to pre-COVID levels of traffic.” https://www.routesonline.com/news/29/breaking-news/294852/routes-reconnected-north-american-airlines-see-pent-up-demand-for-air-travel/

• “Reid believes that the pent-up demand for travel and a desire to celebrate having been vaccinated will lead to a trend of “vaxications,” a term coined by MMGY, once traveled restrictions are lifted.” https://www.travelpulse.com/news/features/2021-travel-forecast-the-vaxication-and-other-trends.html

• “China is evidence of the world’s pent-up travel demand “ “During a Fortune Global Tech Forum virtual conversation on Thursday, four travel experts cited China as proof that travel globally could rebound once the pandemic eases and that domestic tourism can serve as a partial stopgap for the industry until then.” https://fortune.com/2020/12/04/china-is-evidence-of-the-worlds-pent-up-travel-demand/

• “Demand to and from Melbourne has picked up quickly as the state of Victoria increasingly moves away from coronavirus.” “Shane O’Hare, Melbourne’s Chief of Aviation, said there is real pent-up demand in the domestic market.” https://www.anna.aero/2020/12/03/routes-reconnected-demand-picks-up-for-melbourne-with-4-4-million-flight-searches-each-week/

Appendix: EXPE has consistently outgrown the US hotel industry 

Unfortunately I don’t have a newer version of this, but this shows 2015 through the middle of 2019.  

Appendix: Consensus does not anticipate bookings reaching 2019 levels until 2023

Catalyst

• Travel rebound results in massive revenue growth and beats 

• Increased disclosure on Vrbo or any value unlock 

• Vrbo maintains momentum post-COVID

• Achieve or raise cost savings

• Further detail on marketing cost savings