Thanks @mikebrisy, I had on my to-do list, the following things to have a closer look after this manic week is over (1) Cash - your diagram was super helpful (2) the AI impact - moat + opportunity and (3) the impact of the Smart Platform.

A few of the slides is making me re-think exactly what SDR's moat is, in an agentic AI world when AI bots run loose around small/independent hotels on one side (they hold/are the room inventory), then distribution channels on the other side (they distribute the rooms to travellers). SDR sits in the middle of this, not merely passively directing traffic, but actually actively adding immense dynamic value to the hotels in directing the traffic.

I want to think a bit deeper as to how disruption could occur and get bullet-proof conviction that public AI agents have no hope in hell. If there is one good thing that the SaaScare has done, is that it has forced me to about the possibility of wilder, out-there-with-the-fairies scenario's, in answering this question. Something I struggle with as I am perhaps too anchored to reality, which in today's times, is perversely, a bit of a problem ...

What pisses me off royally is that the SP has erased 3 years of gains in 2-3 months and I am back to my cost price from early 2023 when I first bought in. And SDR has grown many-fold in that time, financially and capability-wise but still lost all of that reward .... something has to eventually give with that pricing mismatch, but patience is absolutely required! $4.41 is not a bad valuation to start with in this new low-PE world.

This experience is also making me really think hard as to whether the Buffet buy-then-hold-to-death approach is fundamentally valid still.

@jcmleng I haven't really got my head around the agentic AI threat for $SDR, yet. And I wished we'd have had the chance to hear the $SDR team actually present this material, rather than just be served up the slides!

Does $SDR's advantage lie in its position between the properties and the OTA's? Perhaps. But as an intermediary, is it vulnerable to disintermediation? Not so much at the property end (limited resources argument of SMBs), but more from the OTA end.

The big OTAs like Booking,com and Expedia are themselves investing in AI. Arguably, they could decide to integrate directly into major PMS providers OR provide embedded distribution capabilities. They have global reach and huge datasets (# venues, over time). For example, according to my BA, Booking.com accounts for roughly 69%of OTA hotel booking market share, and Expedia anything from 11-17%. These market positions are large when you consider that $SDR's foothold is of the order of 10% room share and 5% property count share in its market segment. So, a material dataset / view of the market, but comparatively modest.

Could OTAs provide overall revenue management, other than within their own customer base? Doesn't the Property want a neutral revenue manager to optimise across all channels? Might that together with its growing, global dataset give $SDR an enduring edge?

Unlike $CAR or $REA, $SDR is not a marketplace - it is a relatively "thin" intermediary - with some giant incumbents at one end of the transaction.

I haven't thought too deeply about $SDR, but I see it as relatively vulnerable (compared with $WTC, $TNE, or $REA) and that's another reason why I am happy to maintain my exposure at 4.5% of my ASX portfolio.

More thinking is required here.

@mikebrisy, all good questions, which is why I want to think about it more deeply. Some initial framing thoughts:

- SDR IS absolutely the neutral Revenue Manager for the Properties - revenue management is fundamentally challenging/previously non-existent, but SDR has found the way to deliver this, cost effectively, at scale, to small properties so they now have some capability they never dreamed of having. And SDR is performing this role with both its own AI agents over its extensive data around bookings, pricing, yields etc. - I don't think public LLM's will get here as the data remains completely closed

- As an extension of the data thinking, similarly, the booking data of the OTA's would also be closed. If both ends of the data pipe are closed proprietary data, I can't quite see what an agentic AI bot would learn from that is out in the wild. If there is something it can learn from in the wild, then the data moat isn't really a moat.

- SDR is also essentially the workflow for a small property to publish room inventory/pricing/availability and to fulfill that inventory - thats some combo of Smart Distribution/Channels Plus and Dynamic Revenue Plus - 1 pipe property->SDR, and SDR takes care of the other end of piping in the big OTA's. Every transaction flows through SDR and hence, SDR becomes part of the system of record of the property - that is what SDR has positioned itself more clearly in the slide pack this time

- The OTA's could bypass SDR but then we go back to today's 1 OTA to a gazillion properties big and small and each property has 1 pipe per OTA - you would essentially unwind everything SDR has done to date. I can't see a business case for the OTA's doing this at all, even with agents - its not the just the technical pipe, its the support, the ongoing management of the integration etc. For OTA's, they only have 1 pipe into SDR and SDR takes care of everything else. To undo this just because they have an agent to do this, doesn't make sense to me. But it IS an area to think more deeply about.

- If you have a property hook up to multiple OTA's on a 1-to-1 basis, the property would lose all the revenue management capability, lose its ability to manage inventory across multiple OTA's - this is all done by SDR now. Can't think of a reason why a small property of say 20-50 rooms would want to go back to this world, just because an OTA has a bot to come in from the OTA-end. This again, does not make sense to me from either end.

- The other question I am thinking about is, if I was bored and wanted to build an agent to make life easier to find cheap flights or cheap hotels, what sort of build-an-app instructions would I type into Claude? What would my use case be? If I had potential use cases, I could then work through each use case and see how that might hurt SDR. Maybe a question to ask Claude or Chat ...

So, my current thinking is that the intermediation layer is not a thin one at all. My start point is to see SDR as an extension of 2 mission critical workflows of a property, (1) inventory management for the property and (2) revenue management. The OTA pipe is just the vehicle for bookings to occur. You take these 2 capabilities away and the property goes back to being at the mercy of the OTA's with no revenue management capability ... if I think of it like that, coupled with deep and extensive data that onlyt SDR has, the moat is tight as hell.

BUT .... my fear is that this thinking is still too anchored in reality, and does not extend far enough with-the-fairies. Hence, like you, my reluctance to commit more capital, until I think more deeply about this.

What would really help is if I had a chance to speak with a small hotelier running SDR and get some perspectives from them ... it would be awesome if anyone has a contact that would be open to a 20-30 min chat!