Peter Kern: Yes. I’d say we feel quite good about our continued growth of the B2B business. As I mentioned, we’re still finalizing our plans for next year. So not committing to any numbers or anything. But in terms of double-digit growth, we feel confident that the B2B business can continue to grow based on a number of reasons. One, we are constantly adding new partners. And like same-store sales, first year new partner doesn’t perform like a second-year partner, and so people mature into performance. So we’ve got a runway of that. We have an expectation of what we continue to sell into in the marketplace, whether it’s offline travel agents, new partners on our APIs or on our platform. We’ve got a number of initiatives designed to make our products even more appealing, whether it’s new flexibility and how our technology works for our partners, how they can choose the best price, how they can put the best pieces together.
So we have a number of initiatives that all build up to what we think is good visibility into continued strong growth in that business.
Richard Clarke: Thanks. And maybe if I can just ask one follow-up to a question someone asked earlier. Just on the One Key launch, I guess there’s been some questions around what’s the cost to you of rolling that out? And maybe could you quantify what’s been the level of contra revenue you’ve had to include to fulfill the decent growth you’ve seen there?
Peter Kern: Yes. Well, I would say that in principle, when we were rolling it out, the idea was that between our collective loyalty programs, it would not be net additive to the cost. It would be allocated differently among our customers and the benefits would be spread more evenly across our base of customers. So you can think of it as kind of a zero-sum game in terms of total expected dollars expended in contra revenue. Now there were other benefits, as I mentioned, more member discounts, other things built into our platinum level and other. So there are some other pieces that added other value outside of just what you see in kind of the contra revenue space. But that was designed to kind of be a zero sum-ish game. And as I alluded to, we held some back to help bring along our Hotels.com customers, et cetera.
some of which we’ve expended. But all in all, it’s basically been as good or better than we you thought in terms of a cost exercise. We still have a long way to go to get all the benefit on the growth side of it. That’s something we continue to work on. And as I mentioned, it takes some time to come through the numbers. But in terms of the cost side, I think we’ve made that transition we are incurring roughly a similar — think of it as a similar overall cost against the revenue margin across the whole business. And now we just have a lot more people engaged in the program. So we think the net positive on the growth side and shouldn’t really cost us in terms of, think of it as revenue margin shouldn’t really cost us any more than we were expending before.
Operator: Our next question comes from Mark Mahaney from Evercore ISI. Mark, please go ahead.
Mark Mahaney: The feature that you’ve had on the app for quite some time, I think, maybe on the website, too, with ChatGPT, can you just talk about what kind of traction that feature is getting and what you’d like to get out of that in the future.? Thank you.
Peter Kern: Yes. Sure, Mark. Well, so first of all, we were the first to launch it. We’ve been learning a lot as we’ve gone. We’ve talked at a few conferences about how we’ve learned to help customers engage with it. Sometimes they don’t know what to ask. There’s a lot of discovery going on in the world of generative AI around prompts and how to get people into the right questions, et cetera. So we’re doing a bunch of work on that. We’ve recently, frankly, just highlighted it more, so people could find it. We weren’t necessarily certain it was a net conversion winner or not anything winner. We just knew customers were curious. We wanted to see if we could help them with planning, et cetera. Since we’ve highlighted it more, we’ve gotten much more engagement.
But again, it’s early days, and it’s not really I wouldn’t think of it as impacting the business materially other than keeping us on the forefront of technology for our customers and the customers who want to experience it and discover through it. Now as I mentioned, we are using generative AI in many other ways besides just that, hey, I want to go to Paris, when is a good time to go to Paris question, but we’re using it in our reviews to help customers sift through reviews and ask a simple question. We’re using it in service. We’re using it in a lot of places. So generative AI is a bigger story for us long-term and for everybody. But I think in terms of that one feature on the home page, it’s still pretty small. People who like it really like it.
I wouldn’t say it’s moving the business one way or the other, but it’s a feature we want to have up there, and it’s a feature we want to enhance. And ultimately, we want to use AI broadly and generative AI to take you more easily through the collective journey. Whatever part of it you can use it best for, whether that’s home page, discovery, kind of greenfields trying to figure out a trip or anywhere through search, sort, purchase comparison, all of those places that are complicated areas for customers. We want to help use AI, use generative AI where appropriate to just take friction out of that journey end-to-end. And that’s a journey we’re on, and homepage is just one part of it.
Operator: Our final question is from Ken Gabreski from Wells Fargo. Ken, please go ahead.
Alec Brondolo: Hey. This is Alec on for Ken. Appreciate the question. It seems like the business journey over the last couple of years has been focused on centralization, centralization of the tech platform, centralization of the loyalty program. How do you think about centralization of brands? Specifically, it feels like Orbitz, Hotwire Travelocity, the legacy brands have been a drag on nights growth over the last few years. Could it make sense to clean that up in ’24? Thanks.
Peter Kern: Yes. Thank you, Ken (sic) [Alec]. I would say, again, we are happy to have customers on any brands they enjoy. But if you look at how we’ve invested capital, we have not been really investing in those smaller brands for the last few years. There are still customers who enjoy those brands. We’re not planning to turn them off or make them go somewhere else. We obviously think they’d be better off in our main brands with the best-in-class loyalty program and everything else. But at this point, and really, to your point, as we’ve centralized the technology, the lift of maintaining those things has gone away. So as we get rid of having multiple stacks and old stacks to keep up and other things like that, we get to an efficient state where 1 or 21 doesn’t really matter.
