瑞信美股互联网服务业2019年在线旅游展望采取攻势遵循不同的增长路径201912849页

DISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.28January2019Americas/UnitedStatesEquityResearchConsumerInte[e-mail],[e-mail]@credit-suisse.comNicoleD'[e-mail]2019:GoingontheOffensive,FollowingDivergentGrowthPaths■InvestmentCase:WehavemaintainedourOutperformratingsonBKNGandEXPE,aswellasaNeutralratingforTRIPshares.OurpreferenceistoownBKNGoverEXPEgiventhegreaterupsidepotentialtoourupdatedpricetargets.Intheneartermweacknowledgethat1Q19profitabilityguidancemaybebelowconsensusforallthreeandwewillbelookingtotakelargerpositionsinbothBKNGandEXPEsharesonapullback.■BKNG:Weexpectthecompanytohighlightfor2019abroaderrolloutofamediatedpaymentsolutionformerchantbookingstoopenupBooking.comtoadditionalglobalonlinepaymentsolutions.ThisshouldresultinareductionofpaymentfrictionwhichenablesgreatertargetingofoutbounddemandfromChina(amongothercountries).Tothatend,weexpectBooking.comtoinvestneartermintolocalcustomerserviceaswellasstepped-upmarketingdollars,inpursuitofwhatwebelievewillbe$23binoutboundaccommodationsdemandfromChina.WhilewehavebeenanticipatingtheriseofChinaoutboundtraveltoserveasamorepositivecatalystforsometime,webelievethepaymentsaswellasotherproductupdatesputthecompanyinabetterpositiontoaddresstheopportunity.■EXPE:Ourthesisboilsdowntocascadingbenefitsstartingwith1)greateraccommodationinventory,2)improvedselectionandshoppingexperience,3)higherconversionrate,4)greatermarketingefficiencyandultimatelyhigheroperatingmargins.AndwesubmitthatExpediaisinabetterpositiontodelivergivenmanagementbandwidthisnowfocusedmoreonintegration(vsacquisition)aswellasatransitiontothecloud.Furtherourchecksshowing~17%sequentialincreaseinpropertyavailabilityandInstantConfirmationavailabilitysteppingupmateriallyforHomeAwayserveasvalidationpoints.Theongoingincreaseofselectionandthedecreaseofbookingfrictionshouldbemetwithgreaterdemand/trafficacquisition.Wehavehenceincreasedourdirectadvertisingcostassumptionsfor2019,whichleadsustodecrease2019Adj.EBITDAby~3.2%.■TRIP:FollowingmodestdeclinesintheHotelsegmentrevenue-whichwasprimarilydrivenbyadeclineinHotelShoppergrowthfollowingthedecisiontopullbackoninefficientmarketing–aswellasacontinuedmixshiftinNon-HotelrevenueawayfromVacationRentalstowardsbothExperiencesandRestaurants,wecontinuetoexpectTripAdvisortosignalgreaterinvestmentsinthelatterinabidtoconsolidatesupplyanddemand.WethereforeexpecttheFCFfromtheHotelssegmenttocontinuetoberedeployedaccordingly.28January2019Internet2OnlineTravelOutlook2019:GoingontheOffensiveandFollowingDivergentGrowthPathsAlthoughinvestorsmaybeaccustomedtolookingatthisgroupinrelationtoeachother,webelieve2019willbetheyearinwhichthegrowthpathsforeachofBooking,Expedia,andTripAdvisorwillstarttomoremeaningfullydivergealongwiththeirproductfocus.StartingwithBookingHoldings,weexpectthecompanytohighlightfor2019abroaderrolloutofamediatedpaymentsolutionformerchantbookingstohelpopenupBooking.comtoadditionalglobalonlinepaymentsolutions.ThisshouldresultinareductionofpaymentfrictionwhichenablesgreatertargetingofoutbounddemandfromChina(amongothercountries).Tothatend,weexpectBooking.comtoinvestneartermintolocalcustomerserviceaswellasstepped-upmarketingdollars,inpursuitofwhatwebelievewillbe$23billioninoutboundaccommodationsdemandfromChina.WhilewehavebeenanticipatingtheriseofChinaoutboundtraveltoserveasamorepositivecatalystforsometime,webelievethepaymentsaswellasotherproductupdatesputthecompanyinabetterpositiontoaddresstheopportunity.WehenceanticipatelowerprofitguidanceintheneartermandapotentialpullbackinBNKGsharesthatwewilllooktouseasabuyingopportunity.MovingontoExpedia,ourinvestmentthesisboilsdowntocascadingbenefitsstartingwithgreateraccommodationinventory,whichleadstoimprovedselectionandshoppingexperience,whichshouldthenresultinahigherconversionrate,andsubsequentlygreatermarketingefficiencyandultimatelyhigheroperatingmargins.WhileathesisdependentonoperatingmarginexpansionforEXPEsharesisnotnew,wesubmitthatthecompanyisinamuchbetterpositiontodelivergiventhatmanagement'sbandwidthnowfocusedmoreonintegrationversusacquisitionaswellasthetransitiontothecloudwhichshouldofferamorestabletechnologyplatform.Tothatendwebelievethatourchecksindicatingpropertyavailabilitysequentiallyincreasing~17%andInstantConfirmationavailabilitysteppingupmateriallyduringNovemberforHomeAwayserveasvalidationpointsonthethesis.Thatsaidwealsobelievetheongoingincreaseofselectionandthedecreaseofbookingfrictionshouldbemetwithgreaterdemandandtrafficacquisitio