Skift Take

Booking CEO Glenn Fogel's "connected trip" strategy has drawn critics, but he did make a compelling case for the need for it, and just how broken the travel experience still really is.

Booking Holdings CEO and President Glenn Fogel spoke with Skift Executive Editor Dennis Schaal at Skift Global Forum 2021. The two discussed the theme “Why Travel Needs to Work Together as it Rebuilds.” 

You can watch a full video of their discussion as well as read a transcript of it, below.

Dennis Schaal: Hey, everybody. Glenn, so nice to have you here in person, and you’re actually not just the CEO of Booking.com. You’re the CEO of Booking Holdings, Priceline, Kayak, (and) a few other brands out there (like) Agoda. So this is not just a Booking.com CEO.

Glenn Fogel: I was wondering about that introduction, actually. We should’ve talked about it.

Schaal: Yeah, he would have told me about it later.

Fogel: Maybe you knew something I didn’t.

Schaal: Oh, God. All right, if you have any questions for Glenn, please help me out. Ask the questions through the app. That would be great. So Glen, just looking back at the whole pandemic — the beginning of the pandemic — you guys had to lay off 25 percent of your workforce, get funding, whatever. How do you feel the company navigated the pandemic and what sorts of lessons have you learned along the way?

Fogel: Well, it’s been a very hard time for everybody. Let’s face it. It’s not just our company. It’s everybody in the world. It’s been really tough. And you look back and you think, “Gee, what could I have done differently and what should I now having learned the things I should have done differently, going forward, what should we prepare for?” Right? And it’s interesting because we’re all thinking about, “When is this going to end?” What we’re not thinking about is, “OK, what happens after that? What’s the next thing and being prepared?”

And it’s interesting because we always put in our risk condition. We always talked about the risks in the company (and) in our public documents. We always talked about a potential pandemic. We always had it there, and we wrote it. But did we really prepare? We probably didn’t. And that’s something I think about going forward — how can we prepare ourselves better for the next big crisis? Because there are going to be crises all the time. They never go away. And that’s the thing — being agile, being flexible, (and) being able to make changes quickly. How do you make decisions?

And I think we did a really good job to get 27,000 people in a very short time working from home. I mean, if somebody had asked me, “Can we do that?” before it happened, I would’ve said, “No way,” and yet we did it. And then going forward — how can we put together things so that our customers can be treated fairly and well in this crisis? How can we help out the industry and do all these things? It’s worked out, I think, much better than I would have predicted if somebody said you’re going to have a pandemic like that. But the fact is we have to continue to think about how can we make sure we’re prepared for anything that happens down the road. And that’s the real lesson.

Schaal: Interesting. So one of the big developments during the pandemic was the Airbnb (initial public offering). They had a crazy valuation. At this point, you guys are within shouting distance of their valuation, and some of the media would say that maybe some investors feel like Booking.com or Booking Holdings was taken down a peg. You were clearly king of the hill in the years leading up to the pandemic. How do you view what has taken place? Has it changed anything for you?

Fogel: I really don’t think about it in that way, and I know so many people that make this into some sort of sporting event. Who’s ahead and who’s behind, and what your scores are and all that. And I’m saying, “How about we just concentrate on providing a really great service for our customers — our customers are both the travelers and our suppliers — and make the world better?” And that’s really where I concentrate. When somebody says, “Oh look, Airbnb, or this,” I’m like, “What does that have to do with making somebody happier on their travels?”

Schaal: But you’re not just a happiness company. You’re there to make money, and they’re a formidable competitor. I mean, you’re looking to break into the U.S. in a bigger way in short-term rentals. So to that, you say?

Fogel: I say that if you provide a great service, the money will come. Provide a really good service to travelers and to suppliers, and everything else will be fine. In regards to Airbnb, I can’t tell you how much I admire what they’ve done. Brian’s a great leader. He’s done fantastic things. It’s really helped a lot of people, and certainly, we benefit, too, from the fact that more people also look at non-hotel accommodations because we have a heck of a lot of non-hotel accommodations. We’ve got over six million on them.

And the fact that I really like about our product is the fact that customers many times don’t know what they want when they come and visit. They’re not sure, “Do I want a hotel or do I want a condo? Do I want a home or do I want a little tree house, or what do I want?” And we offer it all. And by enabling this service that enables people to see all the different types of accommodations and be able to compare them, see what the different prices are, see what the different reviews are and do all these things, I think we really do offer the customer a better way to shop.

Schaal: So Brian [Chesky, Airbnb CEO] was here the other night and he said, I forget what figure he used, that they were spending $800 million in marketing annually, and they basically shut it off. I’m sure that’s an overstatement. And yet they still had 90 percent of the traffic, something like that. So what do you take from that?

Fogel: Well, they misspent $800 million. I don’t know. I don’t know. I mean, did they fire the (chief marketing officer)? They said $800 million. They got nothing for it?

Schaal: That is certainly another way to look at it, but they certainly do have a great brand in terms of…

Fogel: Clearly, clearly.

Schaal: Onto other subjects now…

Fogel: I bet their investors like that.

Schaal: So it was announced that U.S. borders would finally be opened up to people from Europe and other countries starting in November. What does that mean for your business?

Fogel: Ah, it’s really great. And I’m surprised it took so, so long. But better late than never as they say, right? I mean, did anybody else find that odd that we wouldn’t let in people from places that have a much lower infection rate than ours? I mean, what was the science on that one? I mean, it’s just so weird. We have virus everywhere in parts of our country, and we’re saying, “No, don’t let those people in. They may bring in a virus.” What is going on? Who was thinking like, “You know, this would help a lot if we don’t let people in from Europe.” It’s like, whatever. Look, it’s needed for this industry because we need international travel. International travel is so important for so many jobs (and) so much of this industry. So anything we can do to enable people to travel internationally safely is great for all of us. And I’m really thankful that they finally, finally did it.

Schaal: Great. So in the competition, in short-term rentals, you’re trying to break into the U.S. You’re trying to sign up property managers. I think that’s the basics of your strategy, and Vrbo has also been making some gains, right? They’ve been aggressive in trying to woo or steal Airbnb superhosts. They have this incentive program that’s in the U.S., Canada, France, and the UK at this point. I don’t hear much from Booking.com on this front. I’m sure you have an approach. Probably not super enthusiastic about publicizing it, but what is your approach to attracting Airbnb superhosts. There’s a lot of anger at Airbnb among hosts. How are you dealing with that?

Fogel: So a couple of things, and excuse me, there were a couple times of breaking in, you said. And I just have to politely correct (you). We’ve been in the short-term rental business in the U.S. for a very, very, very long time.

Schaal: Right.

Fogel: We have a big business doing that. We do want to make it bigger, and I’ve been very open about saying there are some areas where we think we’re behind some of our competitors. I’m very honest about that, and I want to improve upon it. And that includes getting more hosts. We’ve talked about that a lot, about providing them the things that they need to be successful on our platform, (and) changing things from doing those things, which we are doing. And yes, Vrbo is doing a whole bunch of incentives, so they can have more people on their platform. And that’s the nature of competition.

You used the word steal, and another person used that word. We’re not stealing anything. Steal is a bad word. You’re trying to create the most competitive environment, and you’re going out and you’re providing great things so that people come and use your service — whether that’s on the supply side or on the demand side. We’re trying to do the same thing. And we’re talking with hosts who have properties, who are big managers of large amounts of properties, and talking with them, coming up with ways that we can work together to make sure that they’re putting their inventory on our platform because the truth is, when a bed is empty, that’s no revenue. You fill that bed, and the margin goes straight to the bottom line. Everybody in the world in this business knows how important it is to have occupancy up as high as you can get it, and that means using every single channel you can to make sure that that bed is filled.

We are up in the opportunity for those people who are not currently using us, and we’re trying to make sure that we are doing whatever they feel is necessary to make sure they’re comfortable using our platform. And that’s what we’re doing. I don’t publicize it. I agree we’re doing it because one of the things I believe is important when you’re trying to be successful is not telling other people what you’re doing.

Schaal: Right. Much to our chagrin. So Peter Kern of Expedia was here yesterday, and he had some nice things to say about Booking Holdings. And he also had some trash talky things to say about Booking Holdings, which I welcomed. I mean, honestly. So I just wanted to hit you up with a couple of them and see what you say. So he said, “They,” meaning Booking Holdings, “are a nearly perfect machine at driving discounts through performance marketing. Nobody’s better than them. They didn’t waste the 800 million, right? So I admire them greatly, but that doesn’t mean that it has as much potential because when we get it right — Expedia — our machine will accelerate as we lean into our advantages.” In other words, he said, Expedia has more upside for investors than does Booking Holdings. You’ve kind of peaked, in other words. They’re down there, but you’ve peaked.

Fogel: Well, if he said it about me personally, I’m sure that’s true, actually. The makeup artist was looking at me … I come into this thing, they put like…

Schaal: Yeah, she was probably listening yesterday.

Fogel: She was looking at me like, “Oh, you’re a lot of work, Glenn.” Peter’s a great guy, and he’s done wonderful things already. You look at that stock price again (and) the investors are very happy, I’m certain. What they’ve done there is good stuff, and I love being in an industry that has such incredibly talented people all competing to create the best things for the consumers, and that’s what we’re going to continue to do. And I’m very pleased to say that I think we’re doing a great job, and I look at the results that we’re coming up with and what we’re providing. And some of the great things down the road with our connected trips that I’m really seeing are beginning to come together. I just know that the future is incredibly bright for all of us in the industry, not withstanding I may have peaked.

Schaal: So about your connected trip strategy, he said, “It’s a good set of words. But we’ve been in the trip business for a long time and we sell more multi-product trips than any other (online travel agency) in the world. We’re going to keep doing it.” And he says one of his staffers asked him about the connected trip — your connected trip — he says, “It’s a trip.”

Fogel: So here’s the thing. Just a show of hands: How many people flew here or took a trip? Me — I drove. Okay. How many of you thought it was absolutely seamless, perfect from the time you actually started planning to right now? Of course, you’re still in the middle. It still could go terribly wrong. But for the people that it hasn’t yet, how do you feel about that? Was this just as easy as everything else you do when you order stuff from Amazon and it just shows up a couple of hours later? Many of you are old enough to remember to get a cab in the middle of the rain, you stood outside and you put your finger up and you just prayed to God somebody would come by and get there, right? Now we have Uber or Lyft and all those wonderful things, right?

There’s so many examples I could give, and yet travel, travel. We’re still in the stone ages because we’re still ticked off as could be. And I’m going to be smart. I was at one of these conferences and I singled out a supplier, “I’m not going to do it this time,” even though it was fun. I can do it this time. My daughter was on a trip this summer, and she and her boyfriend, they were getting on a plane from New York out to the West Coast. And she was outside JFK — 15 minutes (away), driving (there), and she gets a text that the flight is canceled.

That’s it. Not like, “The flight is canceled and we’re going to rebook you. And by the way, we’ve taken care of your car rental, which was in this other city. But now we have to do you into this other city, San Francisco, instead of San Jose. So we’ve changed the car rental for you, and you’re not going to get there until much later. But don’t worry — we notified the hotel that you’re not going to be getting there after midnight. So please don’t give them away.” None of that happened. All that happened was the text just said, “It’s canceled.” My daughter, she’s calling me, “Dad, what do I do?” And I’m like, “Did you happen to use our service?”

Schaal: She booked elsewhere.

Fogel: She booked direct.

Schaal: Oh my God. It pays to book direct.

Fogel: Clearly not. And I said, “Well, did you call the customer service?” She said, “Yes. They said it’ll be eight hours before they’d get back to me.” Eight hours, eight hours. And I’m like, “OK, let me see what I can do.” And I was home, of course, so I was online. I dealt with it all. I fixed it all. We’re fine. That should all happen automatically. That should happen instantly. This data is available. There’s no reason that shouldn’t have happened the way I can go to my phone and get an Uber, or I can go to Amazon and it just shows up. And if something’s wrong, I don’t have to wait eight hours for somebody to call me back. It’s bad. That’s why I believe this connected trip … I don’t think it’s just a bunch of words. I think it’s creating something that we all want and desperately need, and it will help make travel a much better experience. And that’s what I want to help achieve.

Schaal: We’ve got a couple of audience questions that look interesting. What type of (mergers and acquisitions are) left in the online travel sector? What worries you about what type of new tech would disrupt your business?

Fogel: Oh, there’s so much out there. It’s ridiculous how much is out there right now. There are so many new things coming down the pike. There are so many new types of technology, and there’s stuff that’s much further along. That is in terms of concerning things like quantum computing, which I don’t know how much people are following that stuff. (It) could be just incredibly mind-blowing different. But of course, that’s still pretty far down the road. But there’s a lot of stuff that people are trying to develop. Some of these different services and things that I’m talking about — bringing things together.

I don’t know if you see things, and I say travel, but (it’s) travel hospitality. Look at what’s happening right now with Toast, which provides that great service to the restaurant area, right? The reason it’s so successful and the reason it’s valued so high … the reason everybody is excited about it is because it’s providing something that is very different for the restaurant tourists to be able to operate their systems better and make things work better.

Well, think about the hotel business right now. And if anybody here works in a hotel and you look at all the different services and systems and they don’t talk to each other, and it’s just a nightmare. Talk to anybody who works in the back office of the hotels. It’s crazy. These are all things that can be approved on there. Lots of people are working on that. So again, it’s not just what we as consumers see upfront. It runs all the way through the stack, and there are places to make improvements everywhere.

Schaal: I always tell this story. I booked a hotel through HotelTonight, really two years ago.

Fogel: HotelTonight?

Schaal: Yeah.

Fogel: Hmmm.

Schaal: You know them. I’m sure you looked at them, and it was a former Starwood hotel. I forgot which brand, and the front desk guy goes, “Oh, let me go on the back. I (have) to see if the fax came in.”

Fogel: Fax?

Schaal: Fax.

Fogel: Antique. An antique.

Schaal: Yeah. Another quote.

Fogel: Half the people here have no idea what a fax is.

Schaal: And this hotel has rotary phones in the room, so that’s pretty cool. They do. You recently launched a dedicated (financial technology) unit.

Fogel: Yeah.

Schaal: So the question is give us a sense of the financial payments efforts you are doing. What led to the creation of the fintech unit?

Fogel: Well, the reason we created it is, again, this area of providing a better service. So for one example, just right away, when you’re traveling internationally, there’s so much (foreign exchange) that you have to deal with and things are annoying. Make it easier. If you are a hotel and you’re a smaller hotel and you’re taking credit cards, you’re getting charged a lot of money. And I’m thinking to myself, “Well, we have volume. We can do that cheaper. Why don’t we help the hotels out? We’ll do it. We’ll do it for them, and we’ll do it in a way that it’s cheaper than they would do on their own.”

Schaal: You’ll be processing the credit cards?

Fogel: Well, why not do something like that?

Schaal: Yeah.

Fogel: And then you come up with things. Everyone, I assume, is familiar with how exciting this buy now, pay later (practice) companies are doing right now. Well, that too. I mean, we used to have, remember … Well, you may not. You may not be my age. This was back when I was peaking, way back. You have a thing called Christmas savings thing for your…

Schaal: Christmas club.

Fogel: Yes, exactly. So you save money, so you’d have money so you could then travel at some point. Well, now there are a lot more different ways to be able to use credit. So there’s so many things that we can do here, and the idea is (to) create services that are good on both sides of the marketplace and make some money while we’re doing it. That’s what we’re trying to do.

Schaal: And are some of these things taking place now?

Fogel: Absolutely. Yeah, I’ll give you an example. So again, we live in the U.S. Well, not all of us, but some of us do. And it’s fairly easy: credit card. It’s all fine — not a problem. But let’s say, and I give this example because it’s the easy one. You’re in China and you do most of your payments. Let’s say you’re using Alipay or WeChat Pay or something like that. And you go traveling in Europe or you go to the small hotel in Switzerland. You think they’re going to take that? They’re going to say, “What’s that? I don’t know how to do that.” And they certainly don’t want to spend the time, energy, effort, money to set up all these different types of payments. We can do that for them. We’ll take that WeChat pay, we’ll take the Alipay money, and we’ll hand the money over to the hoteliers in the way they want to get paid. That’s the simple example of where we can provide something that removes the cost, take costs out of this system, and it’s good for everybody.

Schaal: So another audience question — a topic I wanted to cover. What is your sense of dependence on Google now post-pandemic? They’ve just started a things-to-do business. They’re doing vacation rentals now.

Fogel: So Google, obviously, we all know is the giant in the room of many, many different industries, travel included. And obviously, we all read in the papers there’s a long look at Google from a regulatory environment and people say, “Oh, I don’t know about this. Maybe they’re too big or they’re doing too many things.” Look, our sense is always just go out and get the customers wherever they are and show them such a great service that when they come back, they come back direct. That’s where we want to be. I want, of course, to not depend on anybody. I want to do it so that consumers — when they come looking for travel, the first thing in their mind is Booking.

That’s what I want to do. And the way to do that is give them great value, great service, great customer service, (and) be what really is supposed to be a travel agent. The meaning of the word agent (is) you’re working in favor of a principle — principle being the customer, that agent-principal relationship. It’s our duty to do what’s great for them. That’s what I want to do.

Schaal: Have you given up on your hotel business and do you think cities will be ghost towns in the future?

Fogel: God, I’m so tempted to say something. I’m not going to say it because I’m trying to hold it in. So nobody knows what the future is going to be, really. I’m willing to admit that I can make a prediction on that one. That ain’t happening. It’s not going to be a ghost town, but there’s no doubt that everybody wonders, “Are we going to work from offices or homes, or what’s the split going to be?” And look, I get it, people. It does seem to go almost demographic. The younger the person is, the more they want to not work in an office. And I want to ask them, “Well, how are you going to meet anybody?” But apparently that’s not allowed in offices anymore. So I guess that doesn’t matter. I’m not sure what the future is going to be in that area. I do believe — I think it may have been Brian who said something about the fact that people are going to take more trips because they’re going to be working. I hope he’s right. I don’t know. But it kind of makes sense, almost.

Schaal: He said there’ll be a new golden age of travel.

Fogel: It’s certainly possible.

Schaal: Yeah.

Fogel: It’s certainly possible. I mean, the fact is we’re all beginning to reevaluate our lives because of this pandemic. And a lot of people … look this great quitting it’s called where people are just leaving and just say, “I don’t want to work right now. I’m going to take time off” or “I just don’t want to go into office and stuff.” There’s a reevaluation of what’s important in life, and how hard do I want to work and where do I want to work. We don’t know what the end is going to be. And that’s why when people ask me, “Do we have to go back to the office?” I say, “Well, we’ll start with some rules,” and we’ll say, “This is what we think.” But it’s an experiment.

We’ll see what we learn. We’ll use the data and figure, “Is this the best way or not?” There are pros and cons that we can put on a piece of paper. But until we actually do this, we don’t know what the best way is yet. And I’m willing to admit that. There’s so many people I read in the paper, and they’re emphatic. They’re like, “Absolutely, this is what we’re going to do.” And I’m like, “How do you know? Why are you so certain?” I don’t know.

Schaal: Yeah. Greg O’Hara from Certares was here yesterday, and he said, “We have data to show that in 2023, business travel will be 80 percent back.” Who knows?

Fogel: Eighty, exactly. Exactly, exactly.

Schaal: He has no data to think it will be any different.

Fogel: By the way, Greg is an incredibly successful smart guy. So don’t bet against him.

Schaal: Yeah. So we’re out of time, Glenn.

Fogel: Yeah, well, a very good meeting. And this is my first time I’ve been in a meeting in person. I’ll just tell you, it’s so great to be back together. And I thank everybody who came here.

Schaal: We’re honored. Thank you.

Fogel: Thanks.

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Tags: airbnb, booking holdings, booking.com, ceo interviews, connected trip, kayak, sgf2021, short-term rentals, vrbo

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