An Overview Of Luxury Escapes As A Travel Marketplace (Adam Chat Clip)

be helpful though if you could kind of, maybe we could start if you can give us like a high-level overview and then also breakdown on, I would say, on Luxury Escapes as a marketplace and some of the unique aspects of it just for some context.

Yeah. So we've got effectively 2 businesses now in a way. Both appear on the same site. So customers aren't always aware of the difference. But our original legacy business was what we call flash sales. And that involves a 2-week limited time offer with sort of 40 or 50 different hotels, and we have our own tours as well. And the nature of that is it's a 2-week short, sharp tactical campaign at a significant discount, often 30 to 50% off what you'll find elsewhere, which is really unusual because travel is generally sold at massive marketplaces called the big OTAs or even the big sort of high street shops. Everybody has the same product at the same price. So if you imagine using TV as an example, so Netflix might have The Office, doesn't anymore, and Comcast may have it and NBC may have it, and it's the same show across different platforms. That's how most of travel is. You can buy— I'm staying in Thailand now at the Pullman Cape Panwa, and you can buy the same product on Expedia, on Booking, on Ctrip, on HotelTonight, on all these, on your local travel agent, Liberty Travel or Flight Centre or wherever you are. The same product everywhere, so pretty much the same price almost always. Be it go direct or be it you go via marketplace, doesn't really change everything. And the difference is distribution versus what our flash sales business is, is it's a different product. It's like we've got The Crown or Tiger King. Nobody else has that. Only Netflix has it. Only Luxury Escapes has what we offer. So we'll offer a 25% off, could be 10% off the price as well as free breakfast, free dinner, free massages and transfers. Nobody else has that except for us. So it's a unique offering for a really short period of time. Intended is to drive a lot of volume up upwards of millions of dollars of volume for the hotel in need periods. So it won't be in the super peak Christmas week, it'll be around that time, and they'll fill rooms that are otherwise empty. So we're competing against an empty room essentially. So the hotel, plus because we're selling not just the bed, we're selling meal, F&B, and spa, and transfer. These assets are much higher margins for the hotel, especially when they sit empty. So we allow a hotel owner to sweat their assets better, and we also sell basically on an early bird basis. So average 6 months in advance. So as a result of what we do, hotels actually make a lot more money while offering a much cheaper product, which is really unusual for travel. It's generally at par. So our legacy business gives this great sort of impulse curation to customers and a great profitability to hotels. That's the business we had for, and still have, still majority of our business for about 10 years. And we've grown that. So It's grown from being 9 properties to 40 or 50. And so it's still curated, but we'll generally give region exclusivity, but try and have a cross-blend of properties around the world. And we realized, and as good as a business that is, and it's great for cash flow, great for customers, great for hotels, problem with that business is lack of scalability. And as you know, marketplace is inherently scalable. And obviously there's a mini network effect, certainly a scale effect with marketplaces. And as you become dominant, you build up your supply and demand side and own it. With flash, you have an inherent limitation, especially with region exclusivity, that I'm not going to run 50 Thailand properties on a flash basis because it defeats the purpose of hotels giving us that because you dilute their production. But our customers were telling us— so that gives 2 problems. One is you're inherently capped at kind of $1 to $2 billion PPV in the marketplace, which is a solid business, but it's not going to be a $100 billion Amazon or trillion-dollar Amazon business. You just can't get it. You're not going to be $100 billion Airbnb or Booking.com. You're capped at that kind of $2 to $3 billion mark, probably global. Maybe 4 billion. So, and at the same time, our customers who at one hand gave us an NPS of 72, so love the product. 72 is off the charts for travel. I imagine Booking's got an NPS of probably 10, Expedia similar, Airbnb might be slightly higher, it's probably 20, 30. So to have a 72 NPS is almost unheard of. The only NPS businesses of 72 are generally the high-end tour businesses who control their end-to-end experience. So we've got this great customer love, but our customers would only give us 10% share of wallet. So they'd say, we'd love you, but we're going to buy from Booking and Expedia and Airbnb because we want to go to Moscow or London or Dubai or Johannesburg or St. Petersburg or wherever or LA, and we may or may not have that product. Chances are we don't have that product. We may have it 1 week a year or 2 weeks a year or 3 weeks a year, but you want to buy travel, you buy travel now. You don't have to wait for 6 months for us to have a Moscow special on or a Paris special on. So we had this really bizarre dichotomy where people love using the site, but we often use other sites. So the question is, how do you solve that without killing the golden goose? So we've always been a business about inspiration, curation, customer trust, customer love. If we just did a Booking.com and have every single property, 500,000 properties on earth, completely defeats the notion of the business and you get lost in this paradox of choice. So which obviously every marketplace has to deal with in their own way, but for us it was more it was more relevant. So what we came up with really through pre-COVID, as COVID happened, so as COVID happened, we had most hotels, a big chunk of hotels around the world shutting and our dev team with less to do. So we could have done what every travel business in the world did, which is furlough between 10% and 50% of that, or 10% and 80% of their staff, or we can do everything we can to keep our amazing team together and find something else to do. So we did the latter and we had a good cash balance, so we weren't sort of an insolvency risk. So we certainly, we didn't think we were. And so what we did was we said, well, for half the team, keep doing the flash stuff, and half the team, we want you to start focusing on marketplace. And by marketplace, we meant effectively a curated marketplace in the sense of what Virtuoso is, which is a B2B2C marketplace in travel with tens of thousands of super luxury property or tens of thousands of super luxury properties. So what our team started doing is started contacting properties. So instead of being a 2-week limited time flash deal. What we— the conversation would change would be, we'll have you on through the year. So a genuine marketplace, you're always on the site. The only non-marketplace aspect was we were still going out to customers. It wasn't self-serve marketplace insurance. It's not like eBay where you self-upload what you're selling, or even Amazon where you self-upload to an extent. It was— we'd still go and negotiate and talk with our hotel partners, but instead of the conversation being 2-week special. It was, we want you to have a product that's on through the year, but it's still slightly different exclusive product to what you are on every other site. So we'd be dealing with the number 1 hotel in London, which is the Corinthia, or the number 2, which is the Ritz-Carlton properties. And we'd say, we understand you can't give us the flash level of special because you're on all the year and we don't want to hurt your other channels, but give us something different. So it could be free breakfast, which is $60 US a night, and a nightly cocktail. So a slight benefit or a free upgrade or a free valet parking or whatever it is. So a slight benefit, but still a relatively low cost benefit for the hotel, but of material value to the customer. It could be upwards of 20% value per discount per night. So we've done that. We've got hundreds and hundreds of properties live. We want to get to 5,000. So not a Booking.com, Expedia style level of direct contracting, but enough to have sort of 5 to 10 properties in every destination. So No paradox of choice, but some choice. So if you go to Luxury Escapes in 3 months' time, or even now, if you go to Luxury Escapes, certainly in 3 months' time, you'll have 7 to 10 properties, 7 to 10 direct contract properties in LA, in Boston, in New York, in Memphis, in London, in Moscow, in Prague, in Melbourne, Sydney, in all these places, as well as a long tail, which we'll get from what we call a bed bank, which could be Expedia partner solutions, could be hotel beds, could be web beds, which fills out a long tail to have sort of 20 options total per destination. So we'll never be a 5,000 options. Like Dubai's got 1,000 hotels that are 5-star. We're not going to show 1,000 Dubai 5-star hotels, we'll show 20 or 30. So you can come to Luxury Escapes knowing we've curated it for you, but there'll always be that great optionality. So that classic curated marketplace, we've gone from the flash product to a hotel curated marketplace and then building a bunch of marketplaces alongside that. So we'll have— we'll go live with a flight OTA, so a bit like Well, Skyscanner is more metasearch, but you'll be able to buy a flight on Luxury Escapes with coach pricing. So you can see the pricing for every day, which is very different to most players. And you can buy a flight through us alongside your— you can already attach now, but you have to do a standalone flight if you're used to using Luxury Escapes, or you've got a credit, or you like us, or you want the great customer service. And we're also creating an experience marketplace, which is probably 2 or 3 months away, which is a bit like Viator, GetYourGuide, Klook. So again, very much attaching to your trip, but also buying standalone. So you could be in the Napa Valley and wanting to buy a wine tour, you can buy it through Luxury Escapes. You can get hot air ballooning in Dubai, you can get a cooking class in Phuket. A lot of these are exclusive to us, some of them aren't, but a lot are. We're also building a villas marketplace, so sort of a high-end Airbnb using a lot of Airbnb suppliers. Airbnb don't go direct for everything, probably 20,000, 30,000, 50,000 of Airbnb's properties are through third parties. We'll use— we'll connect to the same, so we'll have a good chunk of Airbnb's luxury supply will have, and cruises being another one. So we're creating a cruise marketplace for early next year. So again, cruising is very hard to buy online. It's mostly call up an operator, pretty backwards. You can buy, like Disney has some online functionality, you can buy some, but in most cases they very much encourage call up. We'll have an online cruise marketplace, which almost doesn't exist. It's very 1980s or 1990s, the cruise online. So then the final piece is tours. We'll have great online tours, which again is very offline. So I think most travel businesses specialize in one. So Booking specializes in hotels, Skyscanner flights, Airbnb villas, GetYourGuide experiences. We'll have everything at that 5-star level. So that really— we'll have great depth of marketplace across the 5-star. So not great breadth compared to Booking. So Booking's got 500,000 hotels. We won't have 500,000, we'll have maybe 20,000 hotels total, 5,000 direct connect. We'll have villas, cruises, tours, so the whole gamut. So you'll be able to build your whole holiday. Only other place you can really do is an offline travel agent, and then you've got the face-to-face interaction, which is not always ideal for everyone. You're able to build this incredible holiday. And then we're— so then we're starting other marketplaces within the marketplace. So we'll have our marketplace of supply at the faster level, and then we're creating a piece of software that allows you to build your trips. So You've got this massive supply now, this really great breadth of supply, and you'll be able to put it together using a trip planning piece of software. So build your flight, your transfer to the airport, your flight from the US to London, your hotel in London, your London tour, and you can go to Rome and buy your hotel and buy a cooking class, go to Tuscany, buy your amazing food experiences, go to do a cruise from Tuscany to Barcelona. Go from Barcelona back to Dubai, do some stuff in Dubai, go back to New York and go back and survive your transfers all the way, buy your experiences. Maybe you want to stay in a villa when you're in Tuscany, not a hotel, buy that. So all that connected dynamically through a trip building piece of software. So you can do that yourself. And then we're building a marketplace for expert advice. So marketplace doesn't always have to be product. Marketplace can be advice as well. So we'll have experts curating amazing trips using our different supply of products. So we'll create a marketplace for expert advice. So if you think travel agents are amazing at giving advice, you can find that really smart travel agent. They spend 90% of their time building manual trips using these archaic pieces of software. We want to take that stuff away from the great experts. You can be a great expert in Morocco or a great expert in Russia. We want to just get your advice and get your knowledge and build this amazing trip that sits on the site that customers can just buy. So instead of having to find that great expert in Morocco that's buried somewhere in a suburb in Memphis, That Memphis travel agent who spent 30 years in Morocco can put their great trip online on Trip Planner using our breadth of supply. And you can buy it, you can change it, you can take that hotel out, replace it, but you don't know the best cooking class in Marrakesh. You don't know the best tented 5-star experience. You don't know the best hotel in Rabat. There is somebody who does or people who do. So we're going to try and create a marketplace for expert advice. So there could be 3 experts on Morocco, 3 experts on Russia, 3 experts on Tuscany. They create these itineraries, they get a tiny cut from us as well as tips from the users. And these travel agents or experts can make hundreds of thousands of dollars a year simply by creating this amazing experience and putting it up on our marketplace. But advice, obviously getting rated, if your tips are bad, you get taken away. Tips are great, you get priority. So how to create a marketplace within the marketplace becomes the next challenge. So I think there's lots to do. Travel inherently, a bit like banks, hasn't really iterated its product, and by product I mean online product, since 2002. Since Booking.com, Expedia started really creating OTAs. Airbnb started down that road, but if you look at Brian's very slick winter product update, their best product was a Wi-Fi tester. This is not a particularly product-forward business at the moment. Airbnb's focused on their listing and getting their relationship right, but they're not focused on product. We're probably the only, well, probably the most product— customer product-focused travel business now. So that's the journey from flash to marketplace to product, getting that marketplace in the hands of people.