Latest / Bloomberg Intelligence / Tesla Surrenders EV Crown to BYD After 8.6 % Sales Decline

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Tesla Surrenders EV Crown to BYD After 8.6 % Sales Decline · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
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  Speaker 2: Let's bring in our global autos Zar right now. Craig
• 0:26
  Speaker 2: Trudell joins us out of London. He covers all the
• 0:30
  Speaker 2: carmakers and has around the world, but focuses in because
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  Speaker 2: he also is the editor of the Hyperdrive newsletter.
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  Speaker 3: On EV's and we're seeing really.
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  Speaker 2: A changing, a changing c here in terms of EV demand, Craig,
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  Speaker 2: certainly in the US, and that reads out well in
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  Speaker 2: the drop in Tesla sales, doesn't it.
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  Speaker 4: It absolutely does, I think.
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  Speaker 5: You know, it was interesting earlier this week to see
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  Speaker 5: Tesla come out with its own company compiled census.
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  Speaker 4: For these delivery figures.
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  Speaker 5: You know, it's sort of turned a lot of heads
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  Speaker 5: because the average estimate that they put in in their
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  Speaker 5: release was much lower than the Bloomberg compiled average estimate.
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  Speaker 5: It turns out that Tesla came up short even of
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  Speaker 5: their own lower.
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  Speaker 4: Expectations that they pulled together.
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  Speaker 5: It wasn't by much, and so we're not seeing a
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  Speaker 5: huge move in the shares at least for the moment.
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  Speaker 5: But we did see the company's stock price kind of
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  Speaker 5: stumble in the last few sessions of the year, perhaps
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  Speaker 5: in anticipation of the fact that these numbers were going
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  Speaker 5: to be a bit soft.
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  Speaker 6: How do what's the view out there in the marketplace
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  Speaker 6: at craig about how committed Tesla is to its core
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  Speaker 6: auto business visa vs. Some of the other businesses that
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  Speaker 6: Tesla's involved in. That seems to have attracted Elon's real
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  Speaker 6: attention and the attention to the marketplace in general.
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  Speaker 5: Yeah, I mean, I would say, you know, if we
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  Speaker 5: were to sort of break down, you know, maybe use
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  Speaker 5: Groc his chatbot to break down how much which he's
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  Speaker 5: talking about his humanoid robot optimists versus you know, Tesla's
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  Speaker 5: sort of core business, I think it would be no contests.
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  Speaker 5: I mean, he does also talk quite a bit about robotaxis.
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  Speaker 5: And yet in terms of execution there, you know, we
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  Speaker 5: have vehicles in Austin and in the San Francisco Bay
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  Speaker 5: area that are operating still with people supervising upfront. And
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  Speaker 5: you know, yes, the company did do some testing towards
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  Speaker 5: the very end of the year, you know, some driverless testing,
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  Speaker 5: but you know that would put them years behind Weimo
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  Speaker 5: on that front.
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  Speaker 4: You've not seen them scale up a.
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  Speaker 5: Quote unquote robotaxi business the way Weimo has now in
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  Speaker 5: many cities across the US.
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  Speaker 4: Craig.
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  Speaker 2: We had a Bloomberg client writing in earlier with the
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  Speaker 2: tongue in cheek comment about how many robots Tesla has sold.
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  Speaker 2: But it's interesting, you know, the company is valued at
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  Speaker 2: one and a half trillion dollars, not because it sells
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  Speaker 2: one point eight million cars a year, but because investors
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  Speaker 2: have faith in Elon Musk's I guess creativity and success
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  Speaker 2: in future endeavors like robots.
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  Speaker 3: What do we know about what else Tesla could do
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  Speaker 3: to make money?
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  Speaker 5: Yeah, I mean I think that's a really good question,
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  Speaker 5: and I guess I would put that more so focus
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  Speaker 5: that more so on the question of robotaxis. And I think,
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  Speaker 5: you know, with Waimo, we know very little at this
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  Speaker 5: juncture about you know, just how profitable Weimo's business is.
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  Speaker 5: I think we can you know, make a pretty informed,
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  Speaker 5: you know, assumption that they're losing quite a bit of money.
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  Speaker 5: The company is regularly raising a lot of cash from
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  Speaker 5: primarily from Alphabet and has knock gone public. So we've
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  Speaker 5: not seen you know, what sort of figures they have internally,
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  Speaker 5: but you know, I think that's one of the things
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  Speaker 5: that's going to be interesting to watch play out in
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  Speaker 5: twenty twenty six is, you know, everybody is very excited
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  Speaker 5: about robo taxis, and for good reason. It's really neat
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  Speaker 5: to sit in a car with no one behind the wheel.
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  Speaker 5: The question I have is, of course, you know, how
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  Speaker 5: quickly can we scale that capability in a way that's
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  Speaker 5: actually generating money? And I think, you know, some people
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  Speaker 5: are willing to give us the benefit of the doubt,
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  Speaker 5: as you mentioned, and willing to also take him at
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  Speaker 5: his word that he can scale quicker, you know, sort
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  Speaker 5: of over a longer time period. But in terms of
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  Speaker 5: you know, here and now, who actually has cars on
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  Speaker 5: the road that don't have drivers behind the human drivers
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  Speaker 5: behind the wheel, Weimo is ahead of Tesla, and it's
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  Speaker 5: not at all close because we've not seen Tesla actually
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  Speaker 5: commercialize that.
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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. Catch us Live
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  Speaker 1: weekdays at ten am Eastern on Apple Cocklay and Android
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• 4:55
  Speaker 7: Let's talk about deep Seek. Yes, it is back in
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  Speaker 7: the news.
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  Speaker 8: Deep Seek is going to soon release new AIMI model
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  Speaker 8: that could up end.
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  Speaker 7: The sector like it did just a year ago.
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  Speaker 8: The company just published a paper that outlines ways to
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  Speaker 8: develop AI that improves scalability while reducing the computational and
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  Speaker 8: energy demands of training the model, or so it claims to.
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  Speaker 8: Let's bring in Bloomberg Tech co host ed Ludlow, who's
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  Speaker 8: in San Francisco.
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  Speaker 5: Ed.
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  Speaker 7: Is this going to do the same thing as.
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  Speaker 8: Last February when the markets are roctions or are we
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  Speaker 8: sort of used to the fact now that other people
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  Speaker 8: can do AI too?
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  Speaker 9: Yeah, it's certainly kind of a repeat of the format
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  Speaker 9: that Deep seekers is kind of utized, where they publish
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  Speaker 9: a white paper and the white paper or research and
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  Speaker 9: it kind of explains that because of constraints on Chinese
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  Speaker 9: technology companies, principally a lack of access to the lead
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  Speaker 9: edge AI chips, they have to get clever from a
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  Speaker 9: computer science perspective on the architectures, how a model is
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  Speaker 9: weave together, how it is trained, the data it uses,
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  Speaker 9: et cetera. And again they've just published a white paper
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  Speaker 9: that would suggest they found another way of doing that that,
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  Speaker 9: as you pointed out, it's computationally and from an energy perspective,
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  Speaker 9: much more efficient. But it's often a precursor to the
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  Speaker 9: release of a wider model. So what we're waiting on
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  Speaker 9: is what most people refer to as deep seek are
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  Speaker 9: two the kind of next large scale frontier model and
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  Speaker 9: the expectations that that will come in February or March,
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  Speaker 9: and depending on how it performs and ranks in the tables,
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  Speaker 9: could potentially upend the kind of marketplace right now, which
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  Speaker 9: includes competition with American frontier labs for models.
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  Speaker 6: So if we had that deep seek news again a
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  Speaker 6: year ago and it really up ended the market, yeah,
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  Speaker 6: is it just me that I haven't really heard too
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  Speaker 6: much about deep seek since then?
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  Speaker 3: I mean, yeah, I don't know. I mean two things.
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  Speaker 9: The first is that deep seek has continued to work
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  Speaker 9: on smaller models with fewer parameters, and it takes time
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  Speaker 9: to train very very large models. But kind of what
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  Speaker 9: happened in the kind of eruption of February, March and
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  Speaker 9: April of last year in the financial markets is when
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  Speaker 9: Deep Seak started publishing its evidence and the performance of
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  Speaker 9: its models and what it took to train them. Everyone
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  Speaker 9: was like, well, huh, hold on a minute. It didn't
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  Speaker 9: cost you guys very much. It was a lot cheaper
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  Speaker 9: than what the American companies are doing, and you didn't
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  Speaker 9: have access to all this technology that is propping up
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  Speaker 9: the entire market, right, and so it kind of raised
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  Speaker 9: the question why are we so bullish and all of
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  Speaker 9: this in America's context, like all of our evidence for
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  Speaker 9: this market rally or to that point, because remember, like
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  Speaker 9: within video in a mag seven, this was a multi
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  Speaker 9: year thing was because of all the spending and the
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  Speaker 9: performance of those chips. But the present day, the way
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  Speaker 9: that we compare the performance different models is peer review
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  Speaker 9: and performance tables and in the kind of free, lower
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  Speaker 9: cost Chinese models are up there. And so that's why
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  Speaker 9: we're kind of bracing for R two and what it
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  Speaker 9: might show us in terms.
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  Speaker 10: Of performance ed what do we know about what chips
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  Speaker 10: Deepseek is using And was there just a little bit
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  Speaker 10: of skepticism that maybe Deep Sea might be using some
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  Speaker 10: kind of in video chip at one point.
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  Speaker 9: Yeah, there have been media reports that deep Seek and
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  Speaker 9: other Chinese firms were able to get access to the
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  Speaker 9: latest generation of Nvidia GPUs by acquiring them from data
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  Speaker 9: centers in permitted countries, disassembling those data centers, and then
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  Speaker 9: essentially smuggling them through a third country. Go on to
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  Speaker 9: Bloomberg dot Com or the Terminal read the very detailed
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  Speaker 9: reporting on that. There was also a lot of skepticism
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  Speaker 9: about that reporting because right now in Nvidia is severely
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  Speaker 9: supply constrained. Any demand that's out there accounts for all
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  Speaker 9: the chips they're ever going to make, and as one
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  Speaker 9: source put it to me, you don't just sort of
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  Speaker 9: see thousands of black well chips go missing, such is
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  Speaker 9: the demand for them. So it was something that at
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  Speaker 9: the time in Vidia issued a statement straight away and said,
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  Speaker 9: you don't see any evidence of sort of these missing
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  Speaker 9: chips that are being smuggled through different countries. But therein
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  Speaker 9: lies the point of why you're asking me about deep
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  Speaker 9: Seek and it's white paper. It's what China's technology companies
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  Speaker 9: are able to do without access to those chips. That
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  Speaker 9: is the main focus.
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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. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 9:28
  Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
• 9:31
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 9:35
  Speaker 7: From January to year round moderation.
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  Speaker 8: Non Alcoholic beer is booming. Bill Schufeldt is the co
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  Speaker 8: founder and CEO of Athletic Brewing Company. I'm sure you've
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  Speaker 8: seen those cans in the stores or perhaps your local bar.
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  Speaker 8: It's one of the nation's top non alcoholic beer brands.
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  Speaker 8: He joins us now in studio to talk about what's
• 9:52
  Speaker 8: on tap for Booseless SuDS. So, Bill, this is an
• 9:55
  Speaker 8: insane growth story that you've just been telling me. So
• 9:58
  Speaker 8: you started actually what ten years ago, and now your
• 10:02
  Speaker 8: ten x or the market is ten x.
• 10:04
  Speaker 7: Explain what you were just telling us.
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  Speaker 11: For sure, it's it's been a really fun ride. We
• 10:09
  Speaker 11: started the non alcoholic beer market basically had flatline for
• 10:12
  Speaker 11: thirty years before ten years ago. Where we came in
• 10:14
  Speaker 11: and liked to think we reimagined both the product and
• 10:17
  Speaker 11: the marketing of the category, taking out of the penalty
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  Speaker 11: box into the mainstream with delicious flavors, and we've taken
• 10:24
  Speaker 11: it as a category from about one hundred million to
• 10:27
  Speaker 11: passing a billion dollars in the US market this year,
• 10:30
  Speaker 11: and we think that could continue to grow. We expected
• 10:33
  Speaker 11: to five x in the next ten years, with Athletic
• 10:35
  Speaker 11: being twenty five percent of that market. Right now, Athletic
• 10:38
  Speaker 11: is about eighteen point four share the total category. The
• 10:41
  Speaker 11: next biggest is about fourteen and a half share, and
• 10:44
  Speaker 11: that it's another four point dropped to the next brand
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  Speaker 11: behind that. Athletics also fifty two share of the non
• 10:49
  Speaker 11: al called craft beer category, which has well over one
• 10:52
  Speaker 11: hundred brand So we're outsiding the next one hundred plus combined.
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  Speaker 11: And it's really meeting those that next generation of consumers
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  Speaker 11: where they're at.
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  Speaker 6: What's been the response competitive response from some of the
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  Speaker 6: big brewers, which I can't even know the names now
• 11:05
  Speaker 6: they've all merged into one big entity, I think for sure.
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  Speaker 11: So as you've heard on this segment before too, over
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  Speaker 11: forty percent of consumers are doing dry January this year,
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  Speaker 11: Over fifty percent of consumers now view one or two
• 11:19
  Speaker 11: drinks today as unhealthy, and a record low number of
• 11:22
  Speaker 11: Americans are also consuming alcohol on a weekly basis. So
• 11:25
  Speaker 11: this is a huge growth opportunity for the adult beverage market,
• 11:29
  Speaker 11: and a lot of companies relate to that. But over
• 11:32
  Speaker 11: the last five years, basically every major brand has entered
• 11:35
  Speaker 11: that category with an alcoholic analog to our non alcoholic
• 11:38
  Speaker 11: analog to their full strength version, and we really appreciate
• 11:44
  Speaker 11: that support and growing the category.
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  Speaker 8: It's so funny to me, because I didn't have an
• 11:47
  Speaker 8: alcoholic beverage in my life until I was nearly thirty.
• 11:50
  Speaker 8: I think, and I wonder what makes somebody reach for
• 11:54
  Speaker 8: a non alcoholic beer when there are so many other
• 11:56
  Speaker 8: drinks that are already non alcoholic out there.
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  Speaker 11: For sure, it's so when we start Athletic and I
• 12:02
  Speaker 11: would try to get people to taste samples or buy
• 12:04
  Speaker 11: one of our beers. Getting people to cross that barrier
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  Speaker 11: was so hard seven or eight years ago. But I
• 12:09
  Speaker 11: think the light bulb that goes on over and over
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  Speaker 11: again for people is that it is such a delicious
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  Speaker 11: meal pairing at a fraction of the calories as a
• 12:17
  Speaker 11: full strength alcohol equivalent. For example, we were just talking
• 12:20
  Speaker 11: about before I came in, how our Athletic light is
• 12:22
  Speaker 11: twenty five calories no sugar light and carbs, but a
• 12:26
  Speaker 11: full taste that's like a perfect guilt free weeknight beer.
• 12:29
  Speaker 11: And then we brought a ton of innovation to the
• 12:31
  Speaker 11: market too. For example, we're now launching an excited lineup
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  Speaker 11: of non alcoholic brewed cocktails this January at select retailers
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  Speaker 11: like Target, and all these different fond flavored.
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  Speaker 7: Like what give us a foretaste?
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  Speaker 11: Yeah, so we have off that Athletic light logger. We
• 12:50
  Speaker 11: have an Athletic Light Limeman salt launching this year, and
• 12:53
  Speaker 11: in a typical year we launch almost fifty different styles
• 12:56
  Speaker 11: of beers on our website Athletic Brewing dot com. Where
• 12:59
  Speaker 11: before Athletic Brewing this category was a logger only category.
• 13:03
  Speaker 11: So from day one, we've really blown the lid off
• 13:05
  Speaker 11: what taste and availability can be in this category.
• 13:08
  Speaker 3: Who's typical athletic drinker customer?
• 13:12
  Speaker 11: So when we came into the category, this category was
• 13:15
  Speaker 11: typically a lapsed alcoholic drinker. It was very male heavy,
• 13:18
  Speaker 11: it was an older population generally, and since we've redefined
• 13:22
  Speaker 11: the product and marketing of the category, we've seen that
• 13:24
  Speaker 11: drift younger and younger every year. We think forty five
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  Speaker 11: percent of our consumers are below age forty five very
• 13:31
  Speaker 11: heavy in gen Z consumers really, as people have grown
• 13:35
  Speaker 11: up in this digital generation where you have your work
• 13:39
  Speaker 11: in your pocket at all times, everything in your life
• 13:41
  Speaker 11: is filmed and recorded and on record. And people still
• 13:45
  Speaker 11: like to drink, but then they like to zebra stripe
• 13:47
  Speaker 11: and work in non alcoholic and options.
• 13:48
  Speaker 3: Like zebra striping. And I heard that and I forgot
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  Speaker 3: it already.
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  Speaker 11: Yeah, sorry, jumped right over that. It's it's basically we
• 13:54
  Speaker 11: And this has been shocking to me. I hear from
• 13:56
  Speaker 11: bartenders all the time that people order alcoholic drinks non
• 13:59
  Speaker 11: alcoholic alto.
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  Speaker 3: Oh okay, I got you.
• 14:01
  Speaker 7: Okay, it's a brilliant idea. You could put food in
• 14:03
  Speaker 7: there too, That would actually be a better idea. Curians,
• 14:06
  Speaker 7: how do you do it?
• 14:07
  Speaker 8: You have so many options and as you say, you're
• 14:09
  Speaker 8: trying out different ones all the time, I mean, are
• 14:11
  Speaker 8: you very.
• 14:12
  Speaker 7: Non profitable or how does it work? That costs a
• 14:14
  Speaker 7: lot of money?
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  Speaker 11: Well, at the end of the day. In our retail lineup,
• 14:18
  Speaker 11: we're very focused. We have a core group of about
• 14:20
  Speaker 11: five beers which are very popular and highly awarded. We
• 14:23
  Speaker 11: won thirty three Taste Awards last year alone and have
• 14:26
  Speaker 11: won about one hundred and eighty five Taste Awards. Since
• 14:29
  Speaker 11: you know, there's there's been a plethora of entrance into
• 14:33
  Speaker 11: this category from major brewers to there's been ten celebrity
• 14:37
  Speaker 11: brands with more on the way, and almost none of
• 14:40
  Speaker 11: these companies make their own beer, where Athletic has gone
• 14:43
  Speaker 11: the other way. We invested one hundred and thirty million
• 14:45
  Speaker 11: into our own manufacturing, our brewing quality teams, and ultimately,
• 14:49
  Speaker 11: consumers like to know, they want to get the best
• 14:53
  Speaker 11: products and like to know what's behind their products. And
• 14:56
  Speaker 11: after that celebrity hype, they've really loved what they found
• 14:59
  Speaker 11: in that Athletic and so we really try to stay
• 15:02
  Speaker 11: focused in our retail lineup and bring people the best
• 15:05
  Speaker 11: beers over and over again.
• 15:06
  Speaker 6: I got to put my investment backer hat back on.
• 15:09
  Speaker 6: How do you capitalize your company? Always fascinate to see
• 15:11
  Speaker 6: how these private companies and entrepreneurial companies how they fan themselves.
• 15:15
  Speaker 11: Yeah, it's such an interesting Like I came from the
• 15:18
  Speaker 11: financial world, it's such an interesting world these days between
• 15:20
  Speaker 11: private and public capital. And we've been so fortunate to
• 15:24
  Speaker 11: have great access to private capital, from angel investors to
• 15:28
  Speaker 11: private equity investors like Aligance. Consumer growth in General Atlantic
• 15:32
  Speaker 11: and an institutional investor in Kurg Doctor Pepper, and that's
• 15:35
  Speaker 11: afforded us the opportunity over the past eight years to
• 15:38
  Speaker 11: invest one hundred and thirty million dollars into our US
• 15:40
  Speaker 11: manufacturing base. Non all called breweries and taperms weren't a
• 15:44
  Speaker 11: thing before Athletic in the country. We built the first one,
• 15:47
  Speaker 11: and since then we've built them that are one hundred
• 15:49
  Speaker 11: times the output of the original brewery on both coasts
• 15:53
  Speaker 11: and in that world we have found really good access
• 15:57
  Speaker 11: to private to capital in the private market. But ultimately
• 16:01
  Speaker 11: it is really exciting for us to think about potentially
• 16:03
  Speaker 11: being a public company or running a long term private company.
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  Speaker 4: Yeah.
• 16:07
  Speaker 8: I want to ask you more about that, but first
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  Speaker 8: I have to say the marketing is brilliant because you're
• 16:11
  Speaker 8: you know, you're a nonancoholic brewery, but you're targeting athletes
• 16:16
  Speaker 8: and people who go for hikes and you know, serious
• 16:19
  Speaker 8: mountaineers and dog lovers and outdoors the people. I mean,
• 16:22
  Speaker 8: it's just it's amazing. So what is the trajectory that
• 16:26
  Speaker 8: you see before going public? I mean, you're going to
• 16:28
  Speaker 8: open breweries around the country. Are you going to have
• 16:31
  Speaker 8: you know, bars?
• 16:32
  Speaker 12: Is that?
• 16:33
  Speaker 8: Is that something that can be profitable now to the
• 16:34
  Speaker 8: bottom line, or you know, is it better to have
• 16:37
  Speaker 8: people just subscribe and sort of have it as a
• 16:39
  Speaker 8: you know, beer as a service software is Yeah.
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  Speaker 11: Well, in terms of our target customer, I basically built
• 16:45
  Speaker 11: the target customer around my lifestyle because I was authentically
• 16:49
  Speaker 11: living this as a busy professional, love the outdoors. Seventy
• 16:53
  Speaker 11: percent of the population considers the self an athlete. Even
• 16:56
  Speaker 11: though you'll never find me on any podiums anywhere. I
• 16:58
  Speaker 11: love being out there and participate, and so it was
• 17:01
  Speaker 11: really about that health and wellness trend. And then yeah,
• 17:06
  Speaker 11: beyond that, our awareness is still very low. It's about
• 17:10
  Speaker 11: twenty five percent nationally, so we have and our distribution
• 17:14
  Speaker 11: is only about thirty nine percent with our top product,
• 17:17
  Speaker 11: where a lot of the major beer companies, even in
• 17:20
  Speaker 11: our category, even though athletics the number one, have double
• 17:23
  Speaker 11: our distribution. So we have a huge amount of awareness
• 17:26
  Speaker 11: and distribution to go over the next five ten years,
• 17:29
  Speaker 11: and that allows us. We also are trying to open
• 17:32
  Speaker 11: the aperture who to who drinks beer? Where Beer over
• 17:36
  Speaker 11: the past thirty years had been marketing the smaller and
• 17:38
  Speaker 11: smaller audiences, and so this January bringing plans to We're
• 17:43
  Speaker 11: working with Open Table with a big partnership to expand
• 17:46
  Speaker 11: into the culinary world chefs and athletes and stuff.
• 17:50
  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
• 17:57
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 18:00
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• 18:06
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• 18:11
  Speaker 8: For more on travel, Now, let's bring in Dakota, Smith's
• 18:14
  Speaker 8: co founder and president of Hopper.
• 18:16
  Speaker 7: Dakota, thank you so much for joining. How is business travel?
• 18:19
  Speaker 8: How's it come back post pandemic to the extent that
• 18:21
  Speaker 8: we would have liked to come back.
• 18:25
  Speaker 13: Yeah, Hi, nice to meet you. The good news this
• 18:28
  Speaker 13: travel is doing pretty well in the industry. It's mostly
• 18:31
  Speaker 13: fully recovered since the pandemic. Business travel is finally reaching
• 18:36
  Speaker 13: its pre pandemic levels and starting to grow. Visure travel
• 18:39
  Speaker 13: has been you know, it's surpassed the pre pandemic levels
• 18:41
  Speaker 13: probably in twenty twenty three.
• 18:43
  Speaker 12: So travel travel out look is still strong.
• 18:45
  Speaker 13: I mean, people are still spending on travel despite any
• 18:48
  Speaker 13: biggering concerns, any greater economy. We just did a survey
• 18:54
  Speaker 13: this year and Traveler said they spent just as much
• 18:56
  Speaker 13: as travel on the twenty twenty five holiday season as
• 18:59
  Speaker 13: they did twenty twenty four.
• 19:00
  Speaker 3: For example, how are people spending? What are they doing?
• 19:05
  Speaker 6: Is it's still the experiences that people are looking for.
• 19:08
  Speaker 12: Here people are spending.
• 19:12
  Speaker 13: I would say there's probably one trend that is shifting
• 19:16
  Speaker 13: and has really accelerated post pandemic, which is people are
• 19:20
  Speaker 13: using their credit card and loyalty programs more and more
• 19:24
  Speaker 13: when they're booking travel. Obviously, that is partially to offset
• 19:28
  Speaker 13: the costs. Those things lower the cost. Our business has
• 19:31
  Speaker 13: really grown around that. For instance, we power travel rewards
• 19:35
  Speaker 13: and loyalty for probably about ten banks around the world,
• 19:38
  Speaker 13: including Capital One here in the US, other banks around
• 19:41
  Speaker 13: the world like Commonwealth Bank of Australia, New Bank in Brazil,
• 19:44
  Speaker 13: the world's largest neo bank. And we're building these like
• 19:47
  Speaker 13: integrated travel rewards and loyalty experiences directly on the banking
• 19:52
  Speaker 13: website or banking apps, so when people are using their
• 19:56
  Speaker 13: credit cards, they can earn and burn points and kind
• 19:59
  Speaker 13: of access all of these great travel products like some
• 20:01
  Speaker 13: of what you were showing on your screen, And that's
• 20:04
  Speaker 13: a trend that's just really accelerated. Something like twenty percent,
• 20:07
  Speaker 13: twenty five percent of online travel in the United States
• 20:10
  Speaker 13: now is being booked directly through a credit card loyalty
• 20:13
  Speaker 13: program and that's.
• 20:15
  Speaker 12: Just like much, much higher than it was maybe ten
• 20:17
  Speaker 12: years ago.
• 20:17
  Speaker 8: How much do the banks play into that? You mentioned
• 20:20
  Speaker 8: banks in Brazil and outside the United States, But how
• 20:23
  Speaker 8: much are customers, you know, booking their travels through banks
• 20:27
  Speaker 8: in the US. You said twenty five percent of travelers,
• 20:30
  Speaker 8: but how would you increase that figure?
• 20:33
  Speaker 13: Well, I think it's been growing year of year. It's
• 20:35
  Speaker 13: the fastest growing segment of online travel. So online travel
• 20:38
  Speaker 13: is growing about five to six percent year of year,
• 20:41
  Speaker 13: which is about two x the average GDP growth rate.
• 20:45
  Speaker 13: And most of that growth is actually coming through this
• 20:47
  Speaker 13: banking credit card loyalty segment. And there's some simple answers
• 20:52
  Speaker 13: and reasons for that. Fundamentally, the banks are offering really
• 20:56
  Speaker 13: compelling value propositions and rewards to customers that kind of
• 21:00
  Speaker 13: make these experiences some of the best places to book travel.
• 21:03
  Speaker 6: Right.
• 21:03
  Speaker 13: So to go back to my New Bank example, in Brazil,
• 21:07
  Speaker 13: New Bank is offering its customers zero percent APR free
• 21:11
  Speaker 13: installment financing for up to twelve months for all trips
• 21:14
  Speaker 13: booked in new travel.
• 21:16
  Speaker 12: That's very compelling.
• 21:17
  Speaker 13: I think the average APR rate for installment financing in
• 21:20
  Speaker 13: Brazil is thirty five percent elsewhere.
• 21:23
  Speaker 12: So that's one example.
• 21:25
  Speaker 13: When you look at Capital one, if you have the
• 21:26
  Speaker 13: Adventure X card here in the United States, you can
• 21:29
  Speaker 13: earn ten X points when you book a hotel on
• 21:31
  Speaker 13: Capital and Travel that's functionally ten percent back for your
• 21:35
  Speaker 13: next trip. You know, that makes a difference when travel
• 21:39
  Speaker 13: is such a large.
• 21:40
  Speaker 6: Category Dakota, just in my own household. I think this
• 21:44
  Speaker 6: is part of this is generational. Like the extent I
• 21:48
  Speaker 6: go to is I have a Chase card that's branded
• 21:50
  Speaker 6: with United because I'm captive to United here in New York.
• 21:53
  Speaker 3: Okay, So that's about it.
• 21:55
  Speaker 6: My daughter's got twenty seven different scams going any which way.
• 21:59
  Speaker 6: She's got it on spa readsheet about points here, points there.
• 22:02
  Speaker 6: What you need to do is it a younger generation
• 22:06
  Speaker 6: more aggressively, I guess using point to trying to manage
• 22:10
  Speaker 6: and capitalize on them.
• 22:12
  Speaker 13: I think short and series, yes, I mean the statistics
• 22:14
  Speaker 13: are pretty clear. Gen Z is the generation that uses
• 22:19
  Speaker 13: loyalty programs and credit card programs to book travel at
• 22:22
  Speaker 13: the highest clip of any generation by a lot.
• 22:26
  Speaker 7: Yeah, So how are they doing that?
• 22:28
  Speaker 8: I mean, how do you keep track and all these
• 22:30
  Speaker 8: partner airlines and all these you know, alliances between different
• 22:34
  Speaker 8: airlines and so on. Does that happen in the hotel
• 22:37
  Speaker 8: industry too? And you know who ultimately benefits from all
• 22:40
  Speaker 8: of this?
• 22:41
  Speaker 13: I think ultimately the consumer benefits because it's the bank
• 22:45
  Speaker 13: is functionally funding or offsetting the costs of these trips.
• 22:49
  Speaker 13: You know, the average persons taking four trips per years.
• 22:52
  Speaker 13: It's over ten percent of their total income. Humans are
• 22:54
  Speaker 13: spending on travel. So anything to make that more affordable,
• 22:58
  Speaker 13: I think just benefits the consumer. It benefits the economy,
• 23:01
  Speaker 13: benefits the local regions who are receiving the tours and
• 23:05
  Speaker 13: revenue and the tax revenue, and ultimately it benefits the suppliers,
• 23:08
  Speaker 13: right the airlines and hotels. The banks are making it
• 23:12
  Speaker 13: easier for travelers to go through their hotel and to
• 23:16
  Speaker 13: book a ticket on their airline. It is hard to
• 23:18
  Speaker 13: keep track, but I think a lot of people spreadsheet,
• 23:22
  Speaker 13: you know, can afford one or two premium credit cards.
• 23:26
  Speaker 13: You know, there's a limit to how many of those
• 23:27
  Speaker 13: you can have in your wallet. And you know, just
• 23:29
  Speaker 13: choose the best one and it's a great place to book.
• 23:32
  Speaker 3: Are the are the travel is the industry? Are they
• 23:37
  Speaker 3: embracing this? How do they view it? Is it? Is
• 23:40
  Speaker 3: it some way to grow their business?
• 23:43
  Speaker 13: Yes, I think in the United States is furthest along
• 23:45
  Speaker 13: of any country in the world.
• 23:47
  Speaker 12: You've seen this for years and years.
• 23:48
  Speaker 2: Right.
• 23:48
  Speaker 13: You can look at the earnings reports of the major
• 23:50
  Speaker 13: airlines in the US and a huge percentage of their
• 23:54
  Speaker 13: their income and especially their profit is related to their
• 23:58
  Speaker 13: loyalty program and selling the points to their co brand
• 24:01
  Speaker 13: credit card issuing partners.
• 24:03
  Speaker 12: So that that's a fundamental.
• 24:05
  Speaker 13: Part of the airline business that keeps it going, keeps
• 24:08
  Speaker 13: it profitable. Hotels more and more, especially with the large chains,
• 24:11
  Speaker 13: are doing those co brands and leaning into their points
• 24:14
  Speaker 13: program too. So the interoperability between the airline and hotel
• 24:18
  Speaker 13: points programs and the credit card programs is a huge
• 24:21
  Speaker 13: part of that. And then I would say the US
• 24:24
  Speaker 13: is very far ahead. And then what we're seeing as
• 24:27
  Speaker 13: in our business, we're doing a lot of global partnerships,
• 24:30
  Speaker 13: so we're seeing a lot of other countries have been
• 24:32
  Speaker 13: you know, a lot of companies in other countries have
• 24:34
  Speaker 13: been tracking what these American credit card issuers are doing
• 24:37
  Speaker 13: with the American travel suppliers are doing, and they want
• 24:39
  Speaker 13: to share in some of that success too, so they're
• 24:42
  Speaker 13: not as far ahead, but that's where we come in,
• 24:44
  Speaker 13: and we kind of can bring them the greatest technology,
• 24:48
  Speaker 13: the most innovative technology in the space and help them
• 24:51
  Speaker 13: kind of achieve those results in their markets for the
• 24:55
  Speaker 13: first time.
• 24:56
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