Booking Holdings CEO’s Complicated Messaging in Light of EU Scrutiny

Consider the complicated message that Booking Holdings CEO Glenn Fogel has to deliver: He tells a hotel industry in crisis, come to us, “we are the largest platform for demand and travel,” and he advises regulators, “we’re still extremely small in Europe.”

A contradictory narrative? Depends on how you look at it.

“So I’d like to make a point [for] any regulators listening, we’re still extremely small in Europe, a very small share,” Fogel said during an interview at the Bank of America Securities 2021 conference earlier this week. “I just want to make sure we get that across. Obviously, in the U.S., there are — there’s another player [Expedia Group] who’s bigger than us.”

Fogel was addressing pending legislation in the European Union that would clamp down in still-unspecified ways on Netherlands-based Booking.com, which has its strongest market in Europe, as well as Google, for being “gatekeepers” that wield inordinate power over the travel market.

As CEO of both Connecticut-headquartered Booking Holdings and its largest branch, Booking.com, Fogel argued several months ago that in 2019 Booking.com commanded just 13 percent of hotel revenue in Europe.

He said Wednesday that travelers have “infinite” choices on which companies to use to book hotels. “Everybody knows this,” Fogel said. “Even the regulators know this, which is so bizarre. Because when I talk to lawyer and — anybody says, when you got to your last hotels who would you use? OK, what about of the time before that and the time before that? And certainly people say, yes, I know, yes I do look at a lot of it.”

Fogel said it would be “ridiculous” to label Booking.com a gatekeeper.

But the conundrum is that although Booking.com had what some might consider a elatively small market share in Europe — 13 percent of overall hotel revenue pre-pandemic — when you consider the entire market, including other online and offline travel players, and hotels’ own sales channels, Booking.com indeed is a very powerful force in the region. Just ask any independent hotel paying 20 or 25 percent commission.

So whether European regulators decide to take Booking.com down a notch or two, may depend on whether they evaluate Booking’s role from the perspective of just the European online travel market, where Booking wields enormous power, or the wider hotel industry in the region, where its influence its diluted.

Fogel said it is too soon to talk about any impact from a potential regulatory crackdown because the various parties are still negotiating the legislation, which has not yet been adopted.

We Are Big and Powerful

On the other hand, Fogel’s message to hoteliers is that coming out of the pandemic they will not only face traditional competition from rival properties and brands, but they also have to confront a newly empowered short-term rentals industry.

The solution, according to Fogel, is that hotels should come to Booking.com for help.

Why? Because Booking Holdings is the biggest travel platform in the world.

Actually, he thinks airlines, which face a business travel market that may “forever” account for a lower share of the travel ecosystem than previously, and hotels will come calling and be more amenable to deal.

Both airlines and hotels will be looking to generate travel demand, Fogel said.

“Well, we have the demand,” he said. “We are the largest platform for demand and travel. And so well I think we’re going to have a more cooperative way just because we are more valuable to that part of the business.”

The hotel industry leaned into the online travel sector coming out of 9/11 and the financial crisis of 2007-2008, and Fogel thinks that will happen anew because of the rise of alternative accommodation sector, especially during the spring, as a mainstream travel option.

Consumer demand for alternative accommodations, Fogel said, “that doesn’t go back.”