In this episode of Zeno Live, Nick Whitehead speaks with Josh Wood about the outlook for 2024.
Josh, great to have you back here in Auckland. Welcome back to Serko HQ.
Thanks Nick, it's great to be here. I love coming to Auckland and New Zealand.
And we love having you here. Look, it was only just a few weeks ago that we were together at GBTA, the big convention in Atlanta, and before that at the Business Travel Show Europe in London, so you've had plenty of time to interact with the business travel industry in general. Any observations you want to share with us?
Well, you certainly see the effects of consolidation, I think. The thing that I took away from GBTA is just there didn't seem to be a whole lot of new people coming into the fray. The big players are there and they're still in their big booths, but I didn't see a whole lot of new entrants. I didn't see a lot of excitement around what's the next thing. It was more of a status quo.
Ready for a bit of a challenge and a bit of disruption?
Absolutely. And that's the fun side, right?
You've also had an opportunity to kind of get face to face with a whole load of customers and prospects as well. What have you been hearing from them about booking for business?
What's been great, especially at like BTSE inLondon, is talking to actual customers that are using the product and what they've been talking about is just how much it's evolved over the last year and how much they recognize that it's evolved. So we got to debut the new dashboard in June and there was a lot of excitement around that and where we're going to and how we're bringing the products together and making it a more seamless experience for booking.com customers to get into booking for business and vice versa has been really good. And just the enhancements that your team has been making have really started to pay off for our customers.
Amex GBT recently came out to say that they see their biggest growth opportunity in the SMB space as more than 70% of companies in that segment are not in a managed travel program. Are you similarly positive about the opportunities for B4B?
Yeah, I think the small to medium sized business space has a lot of room to grow. It's a very, very large. diverse segment of customers. And if you look at recovery post COVID, I think Amex in their report even talked about that many of their enterprise customers have not returned back to 2019 spending where SMBs are continuing to spend and ramp upas they grow their businesses along with that. It's only natural that business travel grows as well. Those small to medium sized businesses, if they're really successful, won't be small to medium sized forever, right? They'll grow too large and our biggest challenge is to make sure that we continue to be the thing that they need when they need it. And so that's how I'm thinking about the future. We're in the small to medium-sized space right now. Some of those customers will naturally need additional features, and I just hope we're ready for them when they are.
All businesses of every size are facing headwinds or financial pressures at the moment. Are they trying to manage their costs better or find cost efficiencies or cost savings when it does come to business travel?
Yeah absolutely. I mean the fact that already our product is completely free for customers to use whether it's booking, managing, calling up and having a TMC service they're booking, all of those things are free. That already represents a significant savings and then we continue to bring in the amazing pricing and selection that people associate with Booking.com. All of those rates come into Booking.com for Business. And then we're looking at other opportunities on where we can deliver even greater savings.
I think the other really important thing that separates Booking.com for Business from just like using Booking.com is companies are then able to have visibility of where their travelers are going. With reporting they're able to see and understand how much the spend is, so we're giving them the tools to have a better insights into their overall travel program and you know with better data leads. If you want to improve something, you measure it, right? And we're giving companies the opportunity to measure what they're doing in a way that they haven't been able to before, which is super powerful.
And then also with the budget feature, being able to give guidance to the travelers right around what's an appropriate amount to be spending or targeting for their accommodation. And I think we have a lot of work that we can still continue to do on the budget feature. So it's going to be great to see how that evolves and seeing us be able to start giving guidance versus companies putting in their own budget. We can also say, hey, this...you know, maybe $50 a night in San Francisco is not a realistic budget for your employees. And help guide them to what is.
So thinking about development and innovation, you've spent a lot of time with the booking for business and Serko product leadership teams over the last couple of months. What can you share in terms of the focus through to the end of 2024 and as we look into 2025?
Yeah, so I think what's been incredible is just watching the evolution of Serko. We've started to do A/B experimentation,I think a year and a half ago. Seeing Serko adopt that and watching small teams start to evolve and making more and more rapid changes and improvements for our customers. And that's been incredible to watch the cultural change within Serko, but then what has been great, when I'm at the trade show, customers are talking about like, oh man, things are always changing, you guys are adding so much stuff, it didn't do this before, now it does this, and I use it every day.Those sort of things are really, really rewarding. So I think you'll see a continued acceleration of just enhancements to the core product.
And then we're also looking at ways of making the process of getting onto the platform so that you can use it easier for our customers and the ability for them to make the leisure bookings that they want to make on booking.com and then get back into booking for business and and eventually have booking for business in their pocket with a mobile app in addition to the web version that we have now. I think those are really where we're thinking about.
We've made some leadership changes or enhancements over the past few months with David Holyoake coming in to lead the unmanaged travel space for Serko and a new head of data coming on board. How are you seeing the impact of kind of the evolution of our leadership function?
Yeah in general I would say that you know when we started partnering together five years ago I was impressed with the leadership at Serko and I've only gotten more impressed. So I think David adds a really unique perspective. I'm looking forward to working with him over the coming years and I know who you've hired for the head of data and I think you've made a good choice there and and once you guys are ready to announce it people will see why I'm smiling with his background and stuff like that.
But yeah, I mean, I just think you're really well positioned to execute and grow very, very fast. If I was the competition in the managed travel space, so if I was the competition to Serko’s Enterprise Business, I would be nervous. Because I think you've put together a team that can be really impactful over the next few years.
So you've done a lot of work at Serko HQ on experimentation, and in fact, you're speaking at the SaaStr conference in SanFrancisco in just a couple of weeks on experimentation. How have you seen that practice evolve at Serko over the last year or so?
Yeah, so I've seen it take off. We ran the first experiment back in 2021 or so, right, where we tested, hey, is this design better than this design? And so from experiment one till now I think you've run more than 200 experiments. Watching the team talk about experimentation, talk about what the hypothesis is, execute something that gives a small indication of whether this is the right direction or not, and then continuing to build on that as they find success has been wonderful.
And it's even led to organizational changes within Serko. You guys just went through a re-org, and the byproduct of that is you now have teams with less management control because now people have the data and the tools to understand whether they're making the right decision for customers or not. So being able to just deploy more and more teams that are rapidly making innovation, it's something that separates really amazing companies from everyone else. You guys have definitely become an amazing company.
It's been really cool to see not only the reporting from teams on how many incremental making small changes, but also how much kind of negative impact they've been able to avoid by not rolling out features that they assumed were going to be conversion enhancing, but actually they discovered that when they turned them on for a small sub-segment that they weren't going to be positively impacting. Yeah, yeah, that's what's great. Learning always costs money, right? You pay money to go to college because you learn and you run experiments that are unsuccessful to learn what not to.And so watching that learning throughout Serko has been super rewarding.
What's your outlook for the rest of 2024for Booking.com for Business?
I'm really positive. I think that we've made some great enhancements through the first half of the year and those enhancements will continue to pay off as we go through traditionally the highest peak months of business travel and I'm just really excited about together and where we're going to. So I'm nothing but optimistic. One thing that some of our viewers may not be that familiar with is the seasonality of the Northern Hemisphere and Europe in particular.
Can you share any insights around how that kind of impacts travel bookings in general and then business bookings in particular?
Yeah, so traditionally during the summer, summer in the Northern Hemisphere, people are not going to be on a business trip. So we see a peak in demand for leisure travel during the summer and a corresponding dip in demand during the summer for business travel. Once September, October rolls around, those inverse and there's a lot of tradeshows, a lot of business travel that happens at September and October traditionally. And so yeah, we're coming into what should be a peak season for us.
