Latest / Bloomberg Intelligence / Airbnb Gains as ‘Healthy’ Demand Fuels Faster Growth in 2026

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Airbnb Gains as ‘Healthy’ Demand Fuels Faster Growth in 2026 · Bloomberg Intelligence

• 0:02
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 2: Tons of earnings coming out here, a lot of tech stuff,
• 0:26
  Speaker 2: a lot of user economy stuff. I'm looking at Airbnb, Instacart,
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  Speaker 2: all kinds of stuff. Man Deep saying he covers all
• 0:33
  Speaker 2: the tech industry for Bloomberg Intelligence.
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  Speaker 3: He's got the team which.
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  Speaker 2: He manages all around the world for Bloomberg Intelligence. Mandee,
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  Speaker 2: let's start with Airbnb. I've seen a stock trading up here.
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  Speaker 2: There's some pretty good numbers. I was kind of surprised.
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  Speaker 2: They're double digit revenue growth in twenty twenty six. What's
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  Speaker 2: the story there.
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  Speaker 4: Yeah, I think anytime you have a big event coming up,
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  Speaker 4: which in this case it's the FIFA World Cup in
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  Speaker 4: the summer, that's always good news for Airbnb, and that's
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  Speaker 4: what you're seeing.
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  Speaker 5: I think.
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  Speaker 4: I mean, expectations were low, but clearly they're seeing some
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  Speaker 4: lift from a big events, as well as the reserve
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  Speaker 4: now pay later, which is another way to stimulate demand.
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  Speaker 4: But overall supply growth seems to be improving, and they
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  Speaker 4: want to expand into hotels and other areas. It may
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  Speaker 4: compress their take rates a little bit, but there is
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  Speaker 4: no doubt that they want to expand the footprint of
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  Speaker 4: what they have to offer on the platform.
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  Speaker 6: They've also, thanks to a lot of marketing, made clear
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  Speaker 6: that they want to expand into services as well. For
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  Speaker 6: guests we're seeing at Airbnb venues wherever they go. How
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  Speaker 6: much is is that a meaningful contributor to revenue?
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  Speaker 5: No, not yet.
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  Speaker 4: I think all of that hotel services experiences is still
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  Speaker 4: less than five percent and diluted to margins. But look,
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  Speaker 4: the UI for these companies may change because of AI.
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  Speaker 4: So one of the things that they got to ask
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  Speaker 4: on the call is how are they preparing for that
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  Speaker 4: UI change? And I think the mode over the years
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  Speaker 4: for all of the marketplaces has been get bigger in
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  Speaker 4: size and you know, have more frequency with the users.
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  Speaker 4: And that's why experiences and hotels is just their way
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  Speaker 4: of engaging more with their daily active users.
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  Speaker 2: Mindy, what's the how's the market share kind of shaking
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  Speaker 2: out here in the world of hospitality in terms of
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  Speaker 2: the Airbnbs of the world versus the traditional hotel motel Here,
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  Speaker 2: what's the market share, what's the split and are we
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  Speaker 2: still seeing movement there?
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  Speaker 5: Yeah?
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  Speaker 4: I mean all of these big three OTA's Booking, Expedia,
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  Speaker 4: and Airbnb, they do the majority of the booked room nights.
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  Speaker 4: When you think about the global scale, these are the
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  Speaker 4: three scale players. The differences in the profitability. Airbnb is
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  Speaker 4: a lot more profitable and let's say Expedia, which is
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  Speaker 4: why you see that kind of stock reaction today. And
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  Speaker 4: I think what Airbnb has done well is really added
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  Speaker 4: more fragmented supply. So the more fragmented the supply, the
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  Speaker 4: harder it is to disrupt. Even if you get a
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  Speaker 4: new UI tomorrow, because of you know, all the AI innovation,
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  Speaker 4: how do you add the supply, you know, the host
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  Speaker 4: that Airbnb has added over the years, It's very hard
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  Speaker 4: to kind of disrupt that mode because that supply part
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  Speaker 4: is the hardest part. When it comes to marketplaces.
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  Speaker 6: I'm kind of surprised that Airbnb is now offering rooms
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  Speaker 6: at boutique hotels in New York, LA and San Francisco,
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  Speaker 6: Like that feels like it's going into the market that
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  Speaker 6: intended to disrupt and the hotel companies are teaming up
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  Speaker 6: with it. How did that come about and does this
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  Speaker 6: become a bigger part of its business.
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  Speaker 4: I won't say it will become a bigger part, but
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  Speaker 4: those smaller independent boutique hotels, we're looking for additional distribution.
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  Speaker 4: And AIRBNBA as a platform obviously has a lot of
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  Speaker 4: direct traffic. So I think it made sense for Airbnb
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  Speaker 4: to boost their supply because they are sort of plateauing
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  Speaker 4: out when it comes to the vacation rentals, especially in
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  Speaker 4: developed markets, and so from that perspective, supplying growth is
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  Speaker 4: very essential for a marketplace, and adding independent boutique hotels
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  Speaker 4: does add to, you know, that supply, and overall, if
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  Speaker 4: it helps them boost frequency and engagement on the platform,
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  Speaker 4: I think that's what they're looking for.
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  Speaker 2: You all right, well we got you Mandy pinterest stocks
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  Speaker 2: down twenty one percent?
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  Speaker 3: What is going on there?
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  Speaker 4: I mean that's when Meta you know, when they guide
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  Speaker 4: it to thirty percent top line growth in the first quarter,
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  Speaker 4: it had to be at the expense of you know,
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  Speaker 4: the smaller companies, and we saw Reddit do well, but
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  Speaker 4: clearly snap Pinterests, these guys are exposed to the same
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  Speaker 4: advertisers as Meta is, and last night Pinterest called out
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  Speaker 4: you know, tariffs being one of the reasons for advertisers
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  Speaker 4: pulling back on their platform. Retailers, you know, clearly are
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  Speaker 4: spending a lot more on Meta even though Meta is
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  Speaker 4: the scale player. These companies are not getting the advertising
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  Speaker 4: dollars at the scale that Meta is getting, and that's
• 5:15
  Speaker 4: why you're seeing that slowdown in growth.
• 5:17
  Speaker 3: Does AI save the day?
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  Speaker 6: Pints says it's launched Pinterest Assistant its first and of
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  Speaker 6: course this is marketing jargon first, AI powered, visual first
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  Speaker 6: collaborator for online shopping.
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  Speaker 4: I mean, the problem is, you know, no matter what
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  Speaker 4: you do, you're competing with a scale player like Meta,
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  Speaker 4: which is allocating one hundred and thirty five billion dollars
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  Speaker 4: in capex this year building their infrastructure using that for AI.
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  Speaker 4: And that's where I think competition is very tough for
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  Speaker 4: all the smaller players on that side.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast live weekdays at
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  Speaker 6: All right, let's shift gears and talk a little bit
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  Speaker 6: about what's been happening in techland. Software companies have had
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  Speaker 6: a rough, rough week, rough couple of weeks, to be honest,
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  Speaker 6: it hasn't been limited to this week. On our Rana
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  Speaker 6: is our Bloomberg Intelligence technology analyst and hon Our talk
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  Speaker 6: to us a little bit here about how management is
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  Speaker 6: dealing with the AI scare. That's just you know, taking
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  Speaker 6: every part of the economy by storm. It's kind of
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  Speaker 6: rolling through different sectors and everyone seems to need to
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  Speaker 6: be able to answer for how they're going to survive
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  Speaker 6: the on sought of AI.
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  Speaker 7: And this kind of skate is very different than anything
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  Speaker 7: we have seen in the past, because, you know, in
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  Speaker 7: the previous downtowns or whenever we saw big sell off,
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  Speaker 7: the question was the near term demand is an issue
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  Speaker 7: or save some bal issue with someone. In this particular case,
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  Speaker 7: the case is that there is no need for software
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  Speaker 7: a few years from now, not today or tomorrow, what
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  Speaker 7: a few years from now. So what that does is
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  Speaker 7: when you're doing discounted cash flow analysis, the terminal value
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  Speaker 7: of that particular company or a stock, you know, they're
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  Speaker 7: saying is going to be close to zero, and that's
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  Speaker 7: an argument it's so difficult to deal with because that
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  Speaker 7: event hasn't happened. It's all you could say a thesis
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  Speaker 7: of a particular group of investors that says saying that
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  Speaker 7: there is no need for a lot of these companies
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  Speaker 7: that depend on the intellectual capital of software developers people
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  Speaker 7: who are using it, and we could all do this
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  Speaker 7: in house. And I think that's the big fear everybody's
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  Speaker 7: grappling with. And every time you see somebody say, well,
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  Speaker 7: this particular software can go out into something in the
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  Speaker 7: legal world, all the stocks that are part of the
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  Speaker 7: data network or the software that sells it to it,
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  Speaker 7: you know, sell off. So it's really a big dilemma
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  Speaker 7: for even management teams as to what do you even
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  Speaker 7: do right now?
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  Speaker 5: Yeah, us.
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  Speaker 2: What would be frustrating for investors in some of these
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  Speaker 2: software names is like AI. We don't even know what
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  Speaker 2: AI is going to be and what the use cases
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  Speaker 2: are going to be. So I think what's happening is
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  Speaker 2: people are just spitting out the worst case scenarios that
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  Speaker 2: you know, and that's what I'm seeing in some of
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  Speaker 2: these stocks that are off thirty forty percent and these
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  Speaker 2: are real companies with real earnings. Is this something that
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  Speaker 2: plays out over time or how do you get trains?
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  Speaker 7: Yeah, the fear of the terminal value going to zero.
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  Speaker 7: You cannot undo it in the next few months. It's
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  Speaker 7: going to take several, I mean honestly years to play out.
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  Speaker 7: What you have to figure out is do you have
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  Speaker 7: a framework under which you are thinking about, you know,
• 8:41
  Speaker 7: what kind of companies are better protected than the others. So,
• 8:44
  Speaker 7: for example, you know, one could argue that cybersecurity companies
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  Speaker 7: have a better presence there. Second place that we are
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  Speaker 7: arguing is companies that sell into really large enterprises that
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  Speaker 7: have domain expertise, Companies that are critical to you running
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  Speaker 7: your daily operation, your P and L, your human resources.
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  Speaker 7: Those are the ones that are a far more sticky
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  Speaker 7: product than the point product companies that are selling into
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  Speaker 7: the smaller of the medium size enterprise. But you know,
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  Speaker 7: who knows, maybe that theory goes out of the water
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  Speaker 7: as well. So I think you have to have some
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  Speaker 7: framework under which you are you know, gauging these companies
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  Speaker 7: not so much anymore by the financials, but by the
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  Speaker 7: business model and where the impact could.
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  Speaker 6: Be domain expertise. That's a term that I've heard pop
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  Speaker 6: up over and over again on our What does that
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  Speaker 6: mean in the context of software companies?
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  Speaker 7: So think about it this way. We you know, when
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  Speaker 7: there is an issue that we have internally while we
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  Speaker 7: are working, we put in a ticket to figure get
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  Speaker 7: our HR system fixed or our computer fixed. That falls
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  Speaker 7: into a realm of a thing called it service management.
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  Speaker 7: There's a company called service now that has forty percent
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  Speaker 7: market share in that area. You look at somebody like
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  Speaker 7: an a SAP, they pretty much control the finance and
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  Speaker 7: accounting software that's out there. You look at a company
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  Speaker 7: like Workday, they can they control the HR software market
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  Speaker 7: or the HR systems people use. That's the kind of
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  Speaker 7: domain expertise I'm talking about, because that's something only these
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  Speaker 7: guys do, and they do it very well for larger companies.
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  Speaker 7: And there are you know, smaller companies that target the
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  Speaker 7: lower end of the market, but these are the ones
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  Speaker 7: that they'll deal with it. I'll tell you another one. Shopify,
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  Speaker 7: for example. Shopify is something that does a digital commerce
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  Speaker 7: better than any company out there, and they probably have
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  Speaker 7: one third of the overall market right now, and they're
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  Speaker 7: growing at you know, twenty five thirty percent. But guess
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  Speaker 7: when they reported didn't matter, stock still went down after that.
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  Speaker 2: This if you're you know, an investor with high level
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  Speaker 2: of conviction, this is a once in a career type
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  Speaker 2: opportunity potentially. Do you talk to some I'm not going
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  Speaker 2: to call it smart money, but you already talk to
• 10:51
  Speaker 2: people that have some experience that are saying this is it.
• 10:54
  Speaker 2: I'm backing it up. I'm loading up on some of
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  Speaker 2: these names where I feel I have a high level
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  Speaker 2: of conviction in their cash flows. Are you hearing any
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  Speaker 2: of that yet?
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  Speaker 7: Yeah. I haven't had that many incoming inquiries to talk
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  Speaker 7: about software stock in many years because they were very
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  Speaker 7: expensive at that time. I think if you go out
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  Speaker 7: and read the article the Amazon aws, you know the
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  Speaker 7: head he comes out and says, you know, this is
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  Speaker 7: just overblown at this point. So you have like somebody
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  Speaker 7: like Amazon Web Services CEO talking about it in the
• 11:21
  Speaker 7: in the market, so you know there is and then
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  Speaker 7: then you know, on the other side, there is an
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  Speaker 7: argument that, you know, all these jobs would be automated
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  Speaker 7: in the next two years or so. So it is
• 11:30
  Speaker 7: that these two fears, and we all know when you
• 11:33
  Speaker 7: have a fear in the market, people shoot first. And
• 11:36
  Speaker 7: they think later. And that's kind of the dilemma, or
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  Speaker 7: that's that's kind of the market where we are right.
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  Speaker 6: Has that fear dissipated a little bit as we gotten
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  Speaker 6: towards the end of the week or is it still
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  Speaker 6: just as intense as it was a few weeks ago?
• 11:47
  Speaker 7: On rog I think it gets worse every week. I
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  Speaker 7: mean I started looking at this the you know, the
• 11:52
  Speaker 7: second half of last year, and every time I would
• 11:55
  Speaker 7: talk about it and no, this is you know, there
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  Speaker 7: is just two overblown and this doesn't make sense. You know,
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  Speaker 7: next week you come in, everything is down five to
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  Speaker 7: seven percent. Again, I mean as in total. There are
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  Speaker 7: certain companies, as I said, you know, look at Shopify.
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  Speaker 7: They blew out their quarter crew thirty percent. Next quarter
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  Speaker 7: consensus was twenty five percent. They said next quarter they
• 12:14
  Speaker 7: can do thirty percent, and they have a massive agentic
• 12:19
  Speaker 7: you could say, strategy that nobody else has. Stock was
• 12:22
  Speaker 7: down both times. I mean, it didn't matter. So it's
• 12:25
  Speaker 7: very difficult to you know, put rational thoughts at that point.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
• 12:36
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live
• 12:40
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• 12:43
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• 12:50
  Speaker 3: We went to we want to go to Ireland.
• 12:53
  Speaker 2: We ask this kid who is a tech geek, Hey,
• 12:57
  Speaker 2: we're thinking about going to Ireland.
• 12:58
  Speaker 3: He asked this a couple of questions.
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  Speaker 2: Teen minutes later he comes back with a full itinerary
• 13:03
  Speaker 2: that he got.
• 13:04
  Speaker 3: Off of chat GPT.
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  Speaker 2: I said, oh boy, what does this mean for the
• 13:07
  Speaker 2: travel agents? The OTAs not good. Nicole Desusa joins the
• 13:12
  Speaker 2: season Internet and software equity analysts for Bloomberg Intelligence. I'm
• 13:15
  Speaker 2: thinking about the expedies of the world, Nick Nicole, all
• 13:18
  Speaker 2: those types of things. What's going on with that business?
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  Speaker 2: Is that could be one of those business that's really
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  Speaker 2: disrupted with AI.
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  Speaker 8: Yeah, so I think you bring up a great point.
• 13:26
  Speaker 8: Now travelers instead of going to booking Expedia, trip Advisor,
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  Speaker 8: they're just working with chatchibt, so they don't even really
• 13:32
  Speaker 8: have to see the back end. So they are looking at,
• 13:36
  Speaker 8: you know, not just now planning on an AI product,
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  Speaker 8: but they're also potentially going to be booking through an
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  Speaker 8: AI product, So they will ask chatchibt. You know, this
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  Speaker 8: is where I want to go, this is what I
• 13:46
  Speaker 8: want to see, what I want to do. It'll give
• 13:48
  Speaker 8: them an itinerary and then it'll work with the supply
• 13:50
  Speaker 8: partners directly to book everything.
• 13:52
  Speaker 2: Wow, because I mean again, this kid came back with
• 13:54
  Speaker 2: an agenda. Gets twenty eight years old, came back with
• 13:57
  Speaker 2: an agenda that was this is where you're staying, this
• 14:01
  Speaker 2: is where you're going to eat, cars, book, We're going
• 14:04
  Speaker 2: to get a card, do here's your flights, recommended flights,
• 14:06
  Speaker 2: blah blah blah.
• 14:07
  Speaker 3: Yeah, and then the next step would be booking it. Yes, wow, yes,
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  Speaker 3: all right. So if the Expedias of the world, what
• 14:15
  Speaker 3: am I doing here?
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  Speaker 8: So they are rolling out their own AI products, it's
• 14:19
  Speaker 8: a little too early to tell if they'll really be
• 14:21
  Speaker 8: able to compete with something like chat GBT. Expedia has
• 14:25
  Speaker 8: like a really interesting product where you can take uh
• 14:27
  Speaker 8: social media, like a real from Instagram, put it into
• 14:30
  Speaker 8: Expedia's AI product, and it'll create an itinerary based off
• 14:34
  Speaker 8: of what you're seeing on Instagram. So it's kind of
• 14:36
  Speaker 8: like you go from just having inspiration for a potential
• 14:39
  Speaker 8: trip and then it gives you the exact flights, hotels, everything.
• 14:44
  Speaker 3: Expedia just reported some results.
• 14:46
  Speaker 8: How were they They were actually pretty solid. So the
• 14:51
  Speaker 8: real overhang on Expedia for the last year has been
• 14:53
  Speaker 8: the US travel market, which has been pretty stagnant that
• 14:57
  Speaker 8: has been recovering. Expedia is primarily exposed to the US market.
• 15:00
  Speaker 8: They don't have as big of a global presence as
• 15:02
  Speaker 8: booking dot Com and Expedia. As a results, we're pretty solid,
• 15:06
  Speaker 8: strong execution pointing to a recovering US travel market. So
• 15:10
  Speaker 8: we were pretty pleased just with their execution over the
• 15:14
  Speaker 8: last quarter.
• 15:14
  Speaker 2: When I look at Expedia trip Advisor bookings, are they
• 15:18
  Speaker 2: kind of the same, totally the same, or they differentiated?
• 15:22
  Speaker 8: So Trip I would say, is differentiated. They've actually changed
• 15:25
  Speaker 8: their platform a lot in the last few quarters. They
• 15:27
  Speaker 8: are now focusing on becoming an experiences booking platform. So
• 15:32
  Speaker 8: if you are looking to book you know, a cooking
• 15:35
  Speaker 8: class or a wine tasting or a walking tour, you
• 15:37
  Speaker 8: can book that directly on trip platform. So a little
• 15:41
  Speaker 8: bit different than kind of what booking Expedia to do
• 15:44
  Speaker 8: with hotels and flights.
• 15:45
  Speaker 3: What's that? How's that industry?
• 15:47
  Speaker 2: What's the percentage now that people book through these OTAs
• 15:51
  Speaker 2: versus going to Marriott dot com or something like that.
• 15:54
  Speaker 8: So we have definitely seen an increase in direct bookings.
• 15:58
  Speaker 8: It's actually Hotel Hell partners now are incentivized to maybe
• 16:02
  Speaker 8: work directly with AI partners instead of Booking and Expedia
• 16:06
  Speaker 8: because if they go direct, if they have a direct booking,
• 16:08
  Speaker 8: they don't have to pay that fifteen to twenty percent
• 16:10
  Speaker 8: commission to OTAs.
• 16:12
  Speaker 2: So there's another So it's so the technology AI, chat, GPT,
• 16:17
  Speaker 2: whatever you're using that actually works in I guess in
• 16:21
  Speaker 2: favor of the actual hotel, the airline and all that
• 16:25
  Speaker 2: type of stuff.
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  Speaker 8: Yes, so they now don't need the visibility per se
• 16:29
  Speaker 8: on booking.
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  Speaker 3: Ex Yeah, that sounds scary to me.
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  Speaker 2: So as I look at the year to date stock
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  Speaker 2: price performance, Expedia down twenty five percent, Trip down thirty
• 16:38
  Speaker 2: two percent, Booking down twenty two percent. Yes, the market's
• 16:41
  Speaker 2: definitely telling you that they're concerned. Is there a less
• 16:47
  Speaker 2: bare case than that, because I mean, right now we're
• 16:49
  Speaker 2: in an environment where people are throwing everything out the window.
• 16:51
  Speaker 2: Software related Yes, because you don't know where AA is
• 16:54
  Speaker 2: going to go. Here's an example, here's an where you
• 16:56
  Speaker 2: can see it.
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  Speaker 8: Yes, and I think, I mean we are definitely very
• 17:00
  Speaker 8: early in these AI products, so even the bookings product,
• 17:03
  Speaker 8: We've seen examples from Google and from Chat GVT, but
• 17:05
  Speaker 8: they're not necessarily in a place yet where they're going
• 17:08
  Speaker 8: to have a real impact on revenue at least in
• 17:10
  Speaker 8: maybe the next six to twelve months. And I do
• 17:13
  Speaker 8: think we are seeing, you know, an uptick in the
• 17:15
  Speaker 8: overall travel market. So US travel has been improving. We
• 17:17
  Speaker 8: have things like the Winter Olympics the World Cup later
• 17:20
  Speaker 8: this year which are going to kind of boost travel.
• 17:23
  Speaker 8: So I think there is kind of a case for
• 17:25
  Speaker 8: at least short term growth, but there is, you know,
• 17:29
  Speaker 8: the AI overhang still.
• 17:30
  Speaker 3: So is Airbnb.
• 17:32
  Speaker 2: Are they seeing like World Cup stuff like I can
• 17:35
  Speaker 2: rent out my New Jersey home for World Cup for
• 17:37
  Speaker 2: the finals.
• 17:38
  Speaker 8: Yeah, I think, I mean, I do think the World Cup,
• 17:40
  Speaker 8: especially for US travel, will have a pretty significant impact.
• 17:43
  Speaker 8: I think we're going to look at you know, Expedia
• 17:45
  Speaker 8: is probably the most exposed to the US travel market,
• 17:48
  Speaker 8: so if we keep seeing solid execution from them, we
• 17:51
  Speaker 8: could have a next a strong couple of quarters.
• 17:56
  Speaker 3: Stay with us. More from Bloomberg Intelligence coming.
• 17:59
  Speaker 5: Up there for this.
• 18:02
  Speaker 1: You're listening to the Bloomberg Intelligence podcast Catch us Live
• 18:06
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• 18:09
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• 18:13
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• 18:17
  Speaker 2: All right.
• 18:18
  Speaker 6: One of my favorite groups on Facebook is the MX
• 18:21
  Speaker 6: Platinum Card Benefits and Offers Group. It's a private group.
• 18:25
  Speaker 6: It's got about seventy one thousand members, but everyone exchanges
• 18:28
  Speaker 6: tips on how to get the most out of their plot.
• 18:30
  Speaker 3: Really, yes, you're so, you're one of those people that's
• 18:32
  Speaker 3: really into it.
• 18:33
  Speaker 6: I started to become really into it because I didn't
• 18:35
  Speaker 6: like the refresh on the Chase staffire cards, so I
• 18:37
  Speaker 6: wanted to find out the other options.
• 18:39
  Speaker 3: What's the refreshman?
• 18:40
  Speaker 6: They raise the rate the annual fee and then they
• 18:42
  Speaker 6: like change the benefits okay, and so then you have
• 18:45
  Speaker 6: to do a deep diver.
• 18:46
  Speaker 3: Yeah, I know.
• 18:46
  Speaker 2: Like my daughter and her friends, they are all into
• 18:49
  Speaker 2: maximizing the points and oh so she knows she travels
• 18:51
  Speaker 2: all over the world and like she's like Charlie Pellett
• 18:54
  Speaker 2: and doesn't pay for anything.
• 18:54
  Speaker 6: Oh, Charlie Pellett is like the master guy when it
• 18:58
  Speaker 6: comes to these reward points.
• 18:59
  Speaker 3: Okay.
• 19:00
  Speaker 6: Bringing Edward Nigerian, he is a Bloomberg industry Bloomberg Intelligence
• 19:05
  Speaker 6: industry analysts who covers a consumer finance and his team
• 19:08
  Speaker 6: has just written a report on the Platinum Card and
• 19:11
  Speaker 6: the fee economics there, and we'd tell us a little
• 19:13
  Speaker 6: bit more about what you learn, because twenty twenty six
• 19:16
  Speaker 6: was the start of MS rolling out its increased fee
• 19:20
  Speaker 6: for the Platinum Card, and we're starting to get some
• 19:23
  Speaker 6: understanding of what it might look like.
• 19:27
  Speaker 5: Right.
• 19:27
  Speaker 9: So, I mean, when they reported the quarter, great quarter,
• 19:32
  Speaker 9: everything kind of in line with expectations or in some
• 19:35
  Speaker 9: areas better and gave great guidance in terms of mid
• 19:39
  Speaker 9: teens EPs growth for twenty twenty six, and you know,
• 19:43
  Speaker 9: a lot a lot of conversation about the refresh and
• 19:46
  Speaker 9: how great the refresh is going and acquiring you know,
• 19:49
  Speaker 9: lots of new customers.
• 19:52
  Speaker 5: But generally there were two things that.
• 19:54
  Speaker 9: Sort of analysts picked on in the quarter when you're
• 19:57
  Speaker 9: when you're trading that sort of a high multiple financial
• 20:00
  Speaker 9: and those two things were. Number one, that new card,
• 20:04
  Speaker 9: the new card acquisition rate kind of went down a
• 20:07
  Speaker 9: little bit relative to last year and relative to the
• 20:09
  Speaker 9: third quarter. And initially all the money that they're spending
• 20:14
  Speaker 9: on rewards and services and all of what they call variable,
• 20:19
  Speaker 9: customer engagement expenses went up a lot, a little too
• 20:22
  Speaker 9: much in some people's opinions. So what we kind of
• 20:26
  Speaker 9: learned recently was sort of some supporting data around two things.
• 20:30
  Speaker 5: And the big thing was while the.
• 20:33
  Speaker 9: Number of new cards acquired went down a little bit,
• 20:36
  Speaker 9: the fee per new card went up from one hundred
• 20:39
  Speaker 9: and ninety six in the third quarter to two hundred
• 20:41
  Speaker 9: and eighty two, now, so huge jump.
• 20:44
  Speaker 5: Now why is that?
• 20:45
  Speaker 9: That's because a lot of the much bigger percentage of
• 20:48
  Speaker 9: those new cards came from new Platinum customers, which is
• 20:52
  Speaker 9: much better than just a regular customers. So even though
• 20:55
  Speaker 9: a little little less customers acquired, you're getting many more
• 20:58
  Speaker 9: new platinum customers, much better economics.
• 21:01
  Speaker 5: So that's sort of one thing.
• 21:03
  Speaker 9: And then talked a lot about how they're absorbing all
• 21:07
  Speaker 9: of those extra reward costs if you will. But still
• 21:12
  Speaker 9: that's and that's fine because it's enhancing revenue growth, and
• 21:16
  Speaker 9: sort of the revenue growth benefit of that offsets the
• 21:20
  Speaker 9: reward cost more than offsets that reward cost.
• 21:22
  Speaker 6: Okay, Edward, one thing that I've noticed from these Facebook
• 21:25
  Speaker 6: groups is that people get a platinum card that's you know,
• 21:28
  Speaker 6: for the sign up bonus and everything else. But then
• 21:30
  Speaker 6: they start branching out and they get the Gold card
• 21:33
  Speaker 6: because there's more reward points for groceries there. They start
• 21:35
  Speaker 6: to compile a lot of Amex cards, so a lot
• 21:39
  Speaker 6: of the users have multiple cards, don't they.
• 21:42
  Speaker 5: Yeah, no question about that.
• 21:45
  Speaker 9: And obviously you've got to you know, a lot of
• 21:48
  Speaker 9: sort of families on the Platinum card, so there's sort
• 21:50
  Speaker 9: of a primary Platinum card owner and then issuer of
• 21:54
  Speaker 9: multiple cards related to that. So you sort of have
• 21:57
  Speaker 9: this this sort of network of effect of the Platinum
• 22:01
  Speaker 9: card that just keeps building and to some extent, you know,
• 22:05
  Speaker 9: if you can, you know, when you come back to
• 22:07
  Speaker 9: the JP Morgan Sapphire card, if you can, you know,
• 22:10
  Speaker 9: build that reward and service infrastructure even bigger and better.
• 22:15
  Speaker 9: You know, you create the you know, sort of the
• 22:17
  Speaker 9: mode effect, which is what they're trying to do and
• 22:19
  Speaker 9: seems to be working.
• 22:21
  Speaker 3: Hey, ed the I have the Green card I got
• 22:24
  Speaker 3: the day I graduated college. I kept it all.
• 22:27
  Speaker 2: But Scarlet and other folks, I understand they go crazy
• 22:30
  Speaker 2: for these really expensive cards and all the points and managing.
• 22:34
  Speaker 5: You need to go Platinum, Paul, No, I just can't.
• 22:37
  Speaker 3: I can't do it.
• 22:39
  Speaker 2: How big of a business is that for these card companies?
• 22:42
  Speaker 2: Is that really the value driver? The scarlet foods of
• 22:44
  Speaker 2: the world.
• 22:46
  Speaker 5: That's it.
• 22:47
  Speaker 9: Yeah, they care much more about scarlet than they care
• 22:50
  Speaker 9: about you.
• 22:50
  Speaker 5: I have to say, yes.
• 22:52
  Speaker 9: She's going She's about to pay eight hundred and ninety
• 22:55
  Speaker 9: five dollars a year, up from six hundred and ninety
• 22:57
  Speaker 9: five dollars a year.
• 23:00
  Speaker 5: They're gonna give her a heck of a lot of
• 23:01
  Speaker 5: rewards and services for that.
• 23:04
  Speaker 9: But I had a big sign a bump on average.
• 23:06
  Speaker 9: Now I hope this is not completely true, but on average,
• 23:10
  Speaker 9: she one of the Platinum card members, spends about ten
• 23:13
  Speaker 9: times as much on her card as you do.
• 23:16
  Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify,
• 23:21
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• 23:25
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• 23:28
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• 23:32
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• 23:36
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