Transcripts For BLOOMBERG Bloomberg West 20140818 : vimarsan

BLOOMBERG Bloomberg West August 18, 2014

Look at how technology revolutionized the way you get a room on the road. I will bejoining joined by the ceo of expedia. They have a number of initiatives in the early stages that could boost growth and move valuations. Violent protests rocked the streets of ferguson, missouri. Technology is everywhere. Many demonstrators protesting the shooting of michael brown. They are tweeting about the events, giving the public instant details about what is happening on the ground. Is twittere tweeting cofounder jack dorsey, a st. Louis native. He was on the streets of ferguson last week and had been marching him a posting vines and tweets about all that has been going on there. For more on the role tech is davidg lets bring in kirkpatrick, bloomberg contributing editor. Mac, let me start with you. We are not just seeing vines or youtube videos, we are seeing what is happening as it is happening based on what is going on on your site. It tell us what is going on from the inside. We had a Radio Station film and music concert in missouri. They realized they could go out there and use that equipment and reports live to millions. Live streaming is not about face time or hang out, talking to one person live. To onebout broadcasting person but on a platform it can scale to millions. They were using a filter, the knights shot filter, to report the night shot filter. About 1,300,000 views in two hours. 1,300,000 people were watching live stream . It was about 50,000 people at the same time. Everything is recorded in the cloud so people who missed it but still see the tweets are able to watch it. Thein a few hours after live event, even more people watched it. It was also reported on media. Viewst grew to 1,000,300 to 1,300,000 views on the first night. You have been covering technology for a long time. It has been about the way new technologies could change the world. Are we seeing this happening . , the fact that someone tweeted within two minutes of the shooting that he had seen the shooting, it is in active of what kind of world we are living in. I think social media has tremendously altered the landscape. I think it has sped up the response on the protesters side and on the responders side. Im sure it played a big role in alarming to governor enough. Difficulty taking control of the situation. It is significant that jack dorsey is there on the street. He is somebody i know fairly well and i am not surprised. I think it is because he understands the landscape is shifting. Whye are a lot of reasons this matters deeply to him. Lets talk about that a little bit. I was amazed to see jack was there. He is a billionaire and a wellknown corporate ceo. To be out on the front lines of a protest not that anyone is for racial injustice. Im just going to call it a brave move for him to be out there and on the streets. Is this typical of him . Doesnt tell us a lot about Companies Like twitter or square that had a role in founding . He is a very socially minded person. I dont know about him having protested elsewhere. That thesep a lever tools, like twitter and square, our contributors to a leveling of society and increase in social justice. You also have to factor in he grew up in downtown st. Louis and has been deeply affected by the decline of that city and the racial polarization of that city. I know him enough to talk about that with him. It matters a lot. I think it is brave of him to be out there. It is really impressive that he should show he cares that much. I think it is a very important symbol for the Technology Industry and there are a lot of other things we can say about it. I know the way my social , iia feed is lit up by this wonder about people watching the live stream, what their interests are and who is really energized by this and is so upset they are spending the time watching live stream videos. It is the general interest for the media and population to really know what goes on there firsthand. That the Radio Station was able to establish is unprecedented. You couldnt get the tv trucks to be at that location. This gives them coverage that looks Like Television and is zooming in and zooming out. Whether it is a press conference or in the evening and then doing this for a few hundred dollars, it scales as much as to millions. F viewers we have occupied wall street and many other movements around the world. Live television at scale is really important, especially in countries that are not democratic. It plays a key role to know that somebody can bring this to millions of viewers from their phone or camera. You very much for your help. Coming up, get a room. That is what we are calling our special on bloomberg west. We are taking a look inside technological changes revolutionizing the hotel business. It we will start with a big changer. We take a close look at the technology that is changing the Hotel Industry. Airbnb is the darling of the sharing economy. Do to hold off this going juggernaut . We look at the numbers driving airbnb. Airbnb is a big deal. Lots of valuation. Airbnb is fundamentally changing the Hotel Industry. Their growth looking master was 240 million. Growth booking was 240 million. Deal. T is a big airbnbs growth is at the expense of hotels. In every 1 increase airbnbs business the rest of the Hotel Industry falls by five basis points. Think about it. Their growth is unconstrained by limits of real estate or capital. Last year airbnb posted on twitter they want at 30,000 on twitteryear marietta wants to add 30,000 rooms this year. We will add that in two weeks. 678 thousand 630 rooms at the hilton. Airbnb boasts 550,000 listed. That is a growth of almost 500 from last year. Stayed on average five nights, compared to 2. 8 nights at other hotels. Spend nearly half on each trip than other hotel guests. Or57 of them are apartments complete houses. 41 are just one room and 2 are shared rooms. What percentage of airbnb hosts a rental income tax . That number is between the host and god. Airbnb seeks to disrupt personal and Business Travel. The question is how are hotel chains adapting . Travel consultant guys i want to start with you, norm. If you like the changes in the travel business are so extreme because of technology that 20 years ago it was call a travel agent, get me a flight, hotel, car. It is now all technological driven. How is the hotel dealing with this revenue driver change . The idea is to keep connected. The smartphone is the catalyst of everything we are talking about. We are talking about the ability to do things 24 hours a day anytime you want, expecting information instantly. Only need to integrate their current systems to provide more Personalized Service but to do it on a mobile platform that provides value added services. Flags . Switch is the Coolest Company in travel technology today. What problem do you solve . An ecommerce solution for everyone in the travel industry. It is a fast platform. Our software has a single service. Connections all over the world. We simplify the search and booking, whether it is cars, hotel, vacation packages, the airline. Someone might think they are logging into a website for American Airlines but they are actually using your service on the front and backend. Correct. Hotels seeing . 50 of the bookings are hotel or hotel related. Happening in the hotel spaces around personalization. Everyone is trying to make that a very unique experience for the consumer. Airbnb,Companies Like who are experiencing massive growth are playing right into the hands of what consumers are looking for in todays marketplace. They want a personalized experience that is unique and customized to an area or a city or a region that is special for them. Hopefully they get it at a great rate. When i was researching the idea for this special i thought we were coming across revenue. That 40 ng statistic of all hotel rooms are empty on any given day. What i am hearing is we have moved beyond that problem. Theave really gotten to point where customization and personalization and social trends are driving consumer decisions. That was not true five years ago. The problem with the Hotel Industry often is systems are not talking to each other. How many technologies are there . Are reservation systems, propertybased systems for property management. Here are systems for catering all different systems for food and beverage. None of those systems are customer focused. They are really operational focused. The best example i can give you, think about the last time you checked out of a hotel room. What did they ask you . Room number. Those systems have to change and become more customer centric. It is happening. Customers are looking for ways to make the booking path easier. How many systems are out there . How many hotel chains are out there . More than a dozen different types of data are being absorbed by systems like yours. There are internally built systems, ones you can buy through Custom Development or software houses. There are platforms you can connect to or any combination of above. It is a difficult path right now to make a clean booking. As customers want more and more personalization they are looking more and more toward mobile devices to do that. As that trend continues to escalate it is still in its neophyte stages. From a range of 5 hope tell bookings 5 Hotel Bookings to and that depends on what the connection is to and what type of booking is occurring in any type of hotel group. Hotels have seen such a dramatic change in technology. What is the one lesson that applies to all industries that have seen customer demanded technological driven change . You have to anticipate what the customer wants. Not even just knowing the customer or knowing their past habits is a given at this point in at this point. You have to have the right context. That is a challenge for the travel industry. It is a challenge for all industries. Thank and daniel you very much. Toups like stable at trying change. Joins us when bloomberg west continues. Welcome back to the special edition of bloomberg west. We are focusing on how technology is changing the Hotel Industry. People are finding booking hotels on mobile devices and that is creating opportunities for Companies Like stable on a realtime Bidding Service and independent Boutique Hotel. A veteran of the travel business joins us to talk about this. Tell us what staple is. What stayful is. Benefit for the consumer. We are enabling a onetoone negotiation. Those negotiations happen in real time. We use private we use proprietary technology to do that. By occupying a room that would go unsold. Rooms on mostof hotels, is that more extreme or less . It is more extreme with boutiques then chain hotels. Hotels chain hotels have an opportunity to distribute their rooms through their own brand. Not are specifically Branded Hotels and have limited opportunity for distribution. We are currently seeing groups of Boutique Hotels that might be considered smaller brands. What about technology has driven boutique growth in the last 10 years . To take hotels are perfect for the millennial travelers. Millennials born between 1980 and 2000, 20 percent are just getting into their peak purchasing years. They make up 30 of all Business Travel expenditures. Cravingdividuals are the mobile device, instant access to hotels as well as instant gratification, looking for convenience, but are very social and independently social. People would book online. Expedia talks about this. Theyre booking online would go from a couple weeks out. The booking on a tablet goes from a couple days out. Booking on a phone maybe goes a day out. Seeing thectually weak spot be seven days out. It is a spontaneous travel as opposed to the lastminute traveler. He tended to skew millennials. Are makingiduals plans later in the process but not lastminute. They want to make sure they are getting great value, not necessarily looking for the cheapest room but looking for a great value that will give them a unique experience. You also help them find the cheapest room at the hotel they want. We help them find the best value. These hotels will charge more. Have you enticed them to get on the board and ultimately lower their revenue base . Bit ais actually a little misperception that boutiques are more expensive. On average boutiques will be about the same. We are actually below what you would see at the chain star hotels. I am comparing a fourstar chain to a fourstar boutique. What we are doing at stayful is help teak hotels helping Boutique Hotels. Are helping these hotels with their occupancy and overall revenue. Way thefascinated the Hotel Industry has come on long come along and manage this inventoryable maximize pricing using technology. How much are Hotel Managers late at a price and lowering price and raising price at any given day . They will manage it uptotheminute. That is why we have sad have had some success. Towill create new rate hikes get the opportunity for that unmet demand. And also to get the spontaneous traveler. More a little bit of a flexible and dynamic pricing system. Amazing. Stayful cofounder and ceo, thank you. You. Ank we are talking to the ceo of expedia about how the Online Travel site rings over 60 million unique visitors every month. I am cory johnson in for emily chang. We turned back for our special edition of bloomberg west. How the Hotel Industry is changing drastically. Over 150re present booking websites. Joining me from washington is the ceo of expedia. Thank you for joining us. Expedia is growing faster than it has in the past. Why . A couple ofeing trends. One is the globalization of travel really favors expedia because we operate in 50 Different Countries right now. Extending internationally very quickly and we are giving our suppliers the ability to market themselves not only in their home markets but also in international markets. Inhave made Big Investments technology and we are seeing those investments in technology payoff. Big pie of bookings already. There is a mobile revolution. More and more consumers are. Oing mobile cross device that plays into the investments in technology we have made. Let me unpack some of that. One of the things you talked about was international. One of the trends i read was unlike here in the u. S. Where we have so many hotel chains, you dont have those opportunities internationally. Those independently run hotels are just getting online. Is that right . That is exactly right. Couldindependent hotels previously only market through traditional travel agents through a limited segment. They dont have brand budgets to invest in. When they come into our system they are instantly been marketed to consumers, over 60 Million Consumers in 50 Different Countries. Content ate their substantial costs. We make sure the pictures are right. Customer reviews are coming in. They instantly have exposure to the global audience. Now it is possible with our kind of technology coming forward. Talked about technology and investments paying off. Your margins are declining pretty heavily. What is going on there . We arehink that what trying to push his top line growth. Expect operating saw operating margins to come down. Our investment in sales and marketing if you look at our business for the first half of the year we 4. 5. 53 lien dollars Million Dollars in the bigger week dollars. Keep thes we can topline growing, as long as we can keep investing in a brand, and our profits grow, we think that is a pretty good balance all across. There is a line that blew my mind last week that talked about the time that people spend online, booking travel. The distance from the travel when they are on a desktop is days or weeks. When they are on a tablet it is less. Numbers actually . What does it tell you about the future of your business . The average is in the high single digit teens numbers. There is some planning and very significant plans for products like packages, which the average consumer will be booking 45 days in advance. Tablets tend to be more browsing behavior. Consumers love browsing on their it will saveten the desktop for the booking. Mobile is really about the lastminute, which is i am looking for a hotel. Whereas in the old world they look up to see if there is a vacancy sign, now theyre looking down at their smartphones. To the extent that the hotel has our system they will show up and have the opportunity to market. Pushing sameday mobile deals, which is a winwin that has those 40 unsold and a win for the customers. They get a great deal. The impact on hotels in particular when that window is shortened . More lastminute bookings. How do hotels deal with that . Hotels need to get better Revenue Management out there. Book is more risk in their of business because more of their business because business becomes lastminute. They need to be very good in their Revenue Management. And they need to make sure they have the right presence across the various distribution platforms. That includes brands like expedia, hotels. Com, even other online agencies. It also includes looking at dissolution methods, making sure they have presence across all the different platforms out there. One of the interesting trends we are seeing with consumers is not only are they shopping mobile, we see that, now they are shopping across the device. They expect the experience to be consistent when they go from one device to the other. We are investing in new technology where if you do a search on a mobile phone it will show up on your desktop. If you do a search on your desktop it will show up on your tablet, all totally consistently. It sounds expensive and hard. It sounds like emmett sounds like an interesting project. Thank you very much. From an allinclusive vacation package to arsenal stylists who can outfit your hotel room closet, hotels are stepping up Marketing Efforts

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