Skift Take

Online travel giant Booking Holdings looks a lot like it did in 2019, only with a better ground game in vacation rentals and more product innovation.

Booking Holdings has made great strides in its vacation home and short-term rental business, CEO and President Glenn Fogel said at Skift Global Forum in New York City on September 20.

“We’re spending a lot of time, energy, and effort building up our home business,” Fogel said. “Almost a third of our business is now in the home area, which is really wonderful.”

Fogel talked with Dennis Schaal, Skift Founding Editor and Executive Editor, about’s competition with Airbnb, his vision for the “connected trip”, and new insurance-like products that take advantage of financial technology, or fintech. Watch the full video, or read a transcript of it, below.

Interview Transcript

Dennis Schaal: Hello, New York, and all the people online. Glenn, thank you for being here, per usual.

Glenn Fogel: Well, thanks for having me. And these are very strange chairs.

Schaal: Glenn, our goal is to keep you on edge.

Fogel: I’m going to fall off, I think. Good. Go ahead.

Schaal: First, on a more serious note I wanted to… Today is actually the fifth anniversary of Hurricane Maria, and I wanted to give a shout-out to all the people in Puerto Rico and the Dominican Republic that have just been walloped by Hurricane Fiona. I think 90 percent of Puerto Rico doesn’t have power right now. The electrical grid is a mess anyway, and I’m trying to reach friends in the Dominican Republic, haven’t heard from them in days, and it’s on its way elsewhere. So a shout out to them.

Fogel: I echo that. It’s just tragic what’s going on there right now. Just so many people affected and hopefully, FEMA and the others can help as quickly as possible.

Schaal: Yep, totally. So, Glenn, talk about some of the cool things you’re doing at Booking Holdings. What’s the most innovative thing you’re doing over there these days, and what does it mean for your company and for the travel industry at large?

Fogel: There are so many things happening at once, it’s sometimes hard for me to keep track of everything, but the truth is just getting back to basics has really been the most important thing for us. I heard apparently Sunday night, apparently, the pandemic’s over, I heard in the news, but the truth is we’re still suffering and we still are digging out from a hole. Yeah, we had great numbers for the second quarter. I mean, it was the first quarter that we actually were able to do better than 2019 for a full quarter. That was fantastic. But we all know it’s not done yet. There’re parts of the world that are still far behind 2019 numbers, so getting back to basics is first. Then do all the new things that we want to do.

We talk about the connected trip, we talk about FinTech, and we talk about making sure that we are coming up with our home area to be comparable to anywhere in the world with any competitor. These are things we’re working on right now. But I stress to people, “Yeah, it’s exciting all the things down the road, but please let’s keep our eye on the ball to get done what we need to get done so we can bring back the basics.”

Schaal: Asia: That has a big impact on your company. You had a pretty big presence in Asia and the entire travel industry.

Fogel: China obviously still has a Covid-zero policy. China certainly gives a big contribution to the overall travel industry, that’s until they come back. It’s always going to be an issue in Asia. There are other parts of Asia that are still behind. Of course, just because we see declining rates here in the States of infection doesn’t mean we’re going to be out of the woods forever and who knows what’s going to happen down the road.

Schaal: I was excited that we’re near the top of the program today, and we’re going to talk about the connected trip and you can tell us what your vision is for the connected trip. But the travel industry has been in such a crisis lately because our trips are so disconnected lately. How many of you flew in maybe a day or two early because you were worried that your flight would be canceled? I know I did because you can’t rely on air service anymore, so let’s go-

Fogel: I just want to say, it’s absolutely been hard for the airlines in the summer. There were more delays than there had been in the past, and there were more cancellations than the past. There were lines out the gazoo in some airports. I mean, if you’re a [inaudible 00:04:15], if you went to Amsterdam sometime over the summer, you may have had a two-hour line to get through immigration, or to come home you may have had a three-hour line outside to get into the airport, so there were problems. But the truth is when you look at the statistics, they weren’t outrageous, so instead of there were 2% of the flights were canceled, 4% were canceled. I don’t know if those are the exact numbers in some parts of the world, and you can have a headline, says, “It doubled.” True, but many, many, many people were able to get to where they needed to be. Maybe they were a little bit delayed, and it wasn’t easy. I’m not going to beat on my airline partners. They were doing the best they could in a very difficult situation.

Schaal: Why does it feel so much worse? Is it a media conspiracy or…

Fogel: Wait, wait. You mean, if it bleeds, it leads? The bad news is what does-

Schaal: Yeah, that’s what I’m talking about.

Fogel: I don’t know. Do journalists do that? It’s hard to believe.

Schaal: Not here.

Fogel: Oh, no. Not here.

Schaal: Not me. Not moi.

Fogel: No, you wouldn’t do that. I think part of it is, it was harder, okay? Absolutely true. Can’t deny that. I think it’s a very important part of people’s general wellbeing that they want… When they’re going to go on a holiday, they want to go on vacation, they want it to be right and if it gets screwed up, that’s really traumatic for them. Let’s face it, most people don’t get a lot of vacations during the year, so I think that may have been part of it. I think also it was something that everybody could see and hear about, so it was newsworthy. But I do feel that lots of industries had lots of problems trying to get people back to work, and that was problematic. But the headlines seemed much more so on that and much less so that, “Gee, the wait at the restaurant is about 15 minutes later than it used to be to get the food because they don’t have as many servers,” that wasn’t as much news.

Schaal: And part of it, I guess also was people were so anxious to travel.

Fogel: And people were very anxious to travel. That’s right.

Schaal: Yeah, finally get going again.

Fogel: Finally get going. Yep.

Schaal: Let’s go to a really short video. It’s 30 seconds about the connected trip. Flights, hotels, cars, book it all on … Is that the vision?

Fogel: Yeah, and I think the real thing is making it easier, because we know it’s not easy, and everybody who traveled here and if you put your own trip together yourself, you know it’s still a mess. I’m talking the same thing I talked about, I don’t know, five years ago, six years ago, whatever. The fact is, doing your travel planning is still a pain, and the proof of it is you still don’t see a lot of people who are going to book everything at once. Why? Because they’re so exhausted after they do one vertical, they can’t do it. I mean, you book your flight, I dare say you’re going to go to the bar before you try and get your hotel. Absolutely. This is something that we should be able to cure. It shouldn’t be that hard. You wouldn’t think so, but it is. The systems are all different, disparate. It’s hard to get it together. It doesn’t live together.

This is what we’re working on to make it easier, and by doing so, the idea is that will give more value to the consumer, they will decide to come back to us because it is easier. I will give you… Obviously, a better friend now that Dara is no longer at Expedia and Uber and it’s good. Now I can be much friendlier with him. But think about Uber. I mean, everybody who’s a New Yorker, when you think about what a pain it was to get a yellow cab in the rain, God forbid you are not a white male, try and get a cab and it was hard.

Schaal: I used to be a cab driver. I’ll tell you.

Fogel: Yeah, well, you were not one of the people who discriminated, I know.

Schaal: I did not.

Fogel: But the truth is, it was ridiculous, and then you get in, it’s a beaten up yellow cab that barely moves. Then Uber comes and you press one button, one button and a nice car shows up and the person, maybe they know where to go, maybe they don’t, but they got a GPS thing that they can actually see where they’re going to go. Then you didn’t even have to get cash and put it through the little plastic thing, you know that little slot between the bulletproof thing to get… You didn’t have to do that. You just got out of the car. It was wonderful, and because it was so much more wonderful, everybody started using it. So my vision is, let’s make travel like that. Let’s do it at and then we’ll have people come back to us because it is better.

Schaal: I was thinking about your approach to connected trip and what Hopper is doing with FinTech. The way I saw it was, and you could tell me where this is screwed up because a lot of my ideas are screwed up. It’s sort of you’re sitting there when people are approaching their trip planning and you’re saying, “Hey, just chill everybody. We’ve got your back. Problem occurs, we’re there for you, we’re going to fix it. We’ll rebook you, whatever.” Hopper, on the other hand, they want people to be a little uptight about their trip. Like, “Hey, pay us a fee and we’ll freeze the airfare. Pay us a fee and you could cancel your airfare for any reason.” They even have a fee now, “Show up at the hotel, check in, and if you don’t like it, you could leave. We’ll rebook you.” So it’s sort of a totally different approach to trip planning. What do you think of that?

Fogel: I wouldn’t quite characterize it the way you describe these things. I think both Hopper and the products you were describing and things that we work on and things like flight insurance or any accommodations, there are lots of things that actually come together. There is anxiety in travel and the first anxiety is, “Am I choosing the right place to go to?” Because there’s that thought, “Is this going to be good or not?” Then you’re looking at all the reviews and all that, that’s step one. Then step two is thinking, “Okay, am I getting the best price or not?” Feeling certain that you are getting the best price is really important to people, which is why you want to be providing the best price all the time.

Then the issue is, “Well, what if something happens? What if I get sick?” That’s why there’s insurance and things like that. I don’t think it’s that different; people are approaching it different ways and with different products and services, et cetera. I think we’re all trying though to solve the same issue, which is providing value and that value can come in feeling safer and better about it. It could come because you feel safer because you’re with a great company that’s always doing the right thing for you.

Schaal: Speaking about choosing a place to search, we have an audience poll. Where do you think the travel marketing funnel and inspiration starts for most travelers? Flight search, what is that, 19%

Fogel: 19.

Schaal: Destinations search, 80%. Accommodations search, 0% basically. You have spoken on the travel funnel. Glenn, you guys, you’re all about data, right? Making decisions based on data?

Fogel: Yeah, yeah.

Schaal: Do you have data that tells you that people really want the connected trip, that they want to book everything in one place?

Fogel: Right, so data is incredibly important, but there are different kinds of data. Asking somebody a question in a poll is one type of data. Another type of data is how they actually act. What do they buy first?

Schaal: Could be a big difference.

Fogel Right, really different. It could be hugely different. But in this question, which it’s a little bit not exactly where I would think the question really should be. It really is, the first thought is not flight or destination. It’s “What do we want to do?” If I’m in a group, “What are we going to do? Where do we want to go?” It’s that general excitement of looking at all the possibilities in the world about what to do. That’s really the first thing. Then once you’ve come up with some ideas, and I make it specifically plural, ideas, ’cause it’s rare the people, yeah, sometimes you know. “Okay, we’re going to Disney world because by my daughter’s in the third grade and she wants to see a princess and we’re going.” You don’t have to think too much. You’re going to Disney.

But a lot of times it’s “Not quite sure.” Right now my wife and I, we have our anniversaries coming up and we’re looking, and we got a bunch of different choices and we’re trying to think, “Should we go a weekend up north, or should we have a weekend in the city?” We’re looking at all different things at once. That’s really how search works, people going back and back and back, so this, I mean, it’s data, but it’s not that helpful.

Schaal: If I was to ask you, I guess I will ask you, what progress have you made on the connected trip?

Fogel: Yeah, so we’re in the US, so I can actually use a baseball analogy, because many times, depending on what-

Schaal: But we have a global audience.

Fogel: We do have a global… Okay, well, maybe we should or go with … Maybe we should go with football, real football, not American football, where you kick the ball. Yeah. Let’s just say it’s early. How about that? I’ll just go, “It’s early.”

The truth of the matter is COVID knocked a lot of industries back in what they planned to do and what they planned to grow and create. We certainly were a part of that too. We definitely got… I would like to be much further along than we are. We’re not, but we are making progress and we are offering things and I’m seeing it beginning to come together. But, the ultimate goal down the road of this connected trip that provides this incredible more value, convenience, all these things, it’s really further along.

Right now, I just want to make sure each of the verticals, flights, for example, we are just early in building a flight product at Yeah, the numbers are very good in terms of growth. Yeah, it’s still there, but there’s a lot to be done, just to make the flight product better than any other person’s flight product, and that’s it. So we’ve got to build the verticals first. At the same time, we’re slowly beginning to put them together, but it’s going to be a long journey, like anything.

Schaal: When it comes to flights, what do you think of what eDreams is doing? They claim to be the number two flight booking OTA in the world after I guess They’re doing it by subscriptions. The CEO was asked in an earnings call, “Well what about or Booking Holdings, your competition with them?” And he said, “Ah, you know, they’ve been doing flights for years.” So he kind of poo-pooed your growth in flights. So subscriptions, eDreams, what’s your take on that?

Fogel: I don’t know their numbers, so I can’t really comment on whether they are really number two or not. I’m sure you’ve looked at the data. I do not want to say anything negative about something I don’t know enough about. I don’t know enough about their product, that subscription product, how it works. I don’t know if people pay upfront because of the promise you’re going to get a discount. If you’re really getting a discount, I don’t really know that. It would be interesting for journalists who are consumer journalists to really look in to see, are people really getting a bargain, or is this a bait and switch type thing or not? I don’t know, so I leave it up to others. I do know though subscriptions certainly work in some parts of the world. Obviously, I’m an Amazon Prime subscriber because I really think I am getting the true value out of that product.

So if you can provide that value, that’s great. The problem, though, some subscription things work well because the marginal cost is so low. Let’s take, for example, the typical gym and you pay a subscription, you pay a monthly service, you can go as much as you want. You can spend 24 hours and day, if is a 24-hour day place, all you want, because it doesn’t cost the gym any more. The travel industry doesn’t quite work like that, though there could be ways you could differentiate things a little bit. I’m not sure if that really works or not, but I can say this, if it is really working, if it is really successful, we got the people, the capital, the capabilities to do it very, very fast.

Schaal: But it’s not something you’re focusing on now.

Fogel: No, it’s not on the high-priority list right now, no. No.

Schaal: Speaking of discounting, there’s always been discounting in the travel industry, but it seems to be a lot more of it going on. Now, you announced in your last earnings call that of course, you’re a leader in performance marketing, marketing on Google, but that you’re going to lean in a little bit to merchandising, which is basically discounting, right, as a… Well, tell me what you said. What did you mean?

Fogel: Well, I think merchandising, it really depends on how it comes. It certainly can be offering a discount, or it could be offering an additional product. I’ll give you a perfect example. If a hotel says, “Look, we want to give you out of the inventory a free night,” if the customer stays three nights. Well, it’s kind of a discount, right? It’s not just handing cash, so there are lots of different ways to do it. Or for example, we have a great product going out right now, people who are buying certain accommodations and they are getting a free ride from the airport to the hotel. Now that’s offering a lot more value. Now that’s not a discount.

Schaal: That’s for your Genius members, right? Loyalty program.

Fogel: Exactly. Now, is that a discount? Well, the total cost to the consumer’s less, but we can reduce almost anything that way. Yeah, it was that. So that’s why, yes, it is discounting and there is a lot. I don’t disagree with you on that.

Schaal: Okay. Let’s talk a little bit about your competition with Airbnb, on several levels. For example, in the second quarter, Airbnb spent 18% of its revenue on marketing. Booking Holdings, Expedia, Tripadvisor, MakeMyTrip, they all spent more than 50% of revenue on marketing. Is there something broken in the OTA business model? How do you look at that?

Fogel: Well, I look at the fact that… Let’s go for 2020, we made over a billion dollars EBITDA. I don’t remember everybody’s number, but I do believe it was a fairly negative number. Let’s go 2021, I think we made significantly… Did they make money in 2021? I don’t think don’t so.

Schaal: I don’t think so.

Fogel: I don’t think so either. We made a lot of money, and I think if you look at the quarter most… I mean, broken? I don’t know. We should all be so broken.

Schaal: Good point, Glenn. Okay, so it hasn’t really been overly reported that your vacation rental business, what you call alternative accommodations, has really been growing substantially and that you are up 25% in alternative accommodations versus 2019.

Fogel: Correct.

Schaal: That’s an Airbnb-like number. It’s about the same as what they’re doing.

Fogel: Yeah. It’s a good number.

Schaal: I saw today, I know you don’t focus on market cap. You’re both at $75 billion market cap today, before trading started. How’s that competition with Airbnb going? Do you think they did anything innovative with that whole new search thing that you can search for homes that are labeled “Oh my God” or “beach destinations”? Is that a gimmick? What’s your take?

Fogel: Couple things. I think Airbnb, trailblazing company, has done wonderful things and made travel better for so many people, really, while we did have nonhotel accommodations homes, etc. long before Airbnb existed, the truth of the matter is they made it popular. They were absolutely the number one player in that industry and really made travel different than it’d ever been before and hats off to the people who started it. Brian, his team did a great, great thing and really made the world an easier way to travel in different ways. Absolutely correct. We believe that’s true, and that’s why we’re spending a lot of time, energy and effort building up our home business.

The 25% increase from 2019 is great, and almost, approximately almost, a third of our business, a third of our business, is now in the home area, which is really wonderful. Continue to build out new products, new things to do so that we can make sure that when somebody’s thinking about traveling, when they come to our site, they see all the possibilities in one place, can compare and contrast a hotel versus a home and what fits what their needs are, and what the prices are, and what the reviews are. Then they can decide what is best. We think that’s a really important thing to do, to make sure that the customer is going to get what really fits what they want to travel. Look, we are going to compete for a long, long time. It’s healthy. Competition is an extremely healthy thing, and I hope the regulators recognize how incredibly competitive this industry really is.

Schaal: Well, you brought up regulators, so the consensus out there is that the European Commission is probably going to cite as a gatekeeper in Europe, in terms of having control, a certain amount of control, of the hotel industry, of selling hotels online. I know it’s definitely not a monopoly, but anyway, would it be fair for to be named a gatekeeper and not Expedia or not any of your other competitors?

Fogel: Yeah. I think there’s a lot of politics that goes into the regulatory environment, particularly nowadays, more than ever. I really believe… I know this, I know is factually true, that we have no dominant position in hotel accommodations in Europe or anywhere. Whenever I speak to somebody who says, “Oh, no, you do.” I say, Really? When you travel, when you’re going to decide where you’re going to travel, do you feel that really only place to go is us, or we’re absolutely the top of mind all the time, or do you use different… and you look and you see and you compare?” The truth is, this is one of the most incredibly competitive industries in the world, in the world. When you are deciding where to travel, if you go to Google, look at the list of different ways you could buy the stuff and different prices, et cetera, and all the different things.

I am always surprised when I hear someone say, “Well, your industry is just the OTAs and we’re not going to count the hotels who are selling the product online.” Well, a consumer doesn’t make any differentiation. The consumer looks online, they’ll go to Google and they’ll see something from us. They’ll see something from Expedia, something from, oh my God, Hilton or Marriott, or pick a… right next to it. The customer doesn’t see a differentiation.

Schaal: But you’re the strongest player that the hotels have to deal with.

Fogel: That word “have to” is not a good word. They get to choose whether they want to or not and they-

Schaal: Well, if they want heads in their beds.

Fogel: If they want to use our channel, they can do it, or they can use someone else. There’s no requirement, and there are a lot of hotels that don’t. By the way, here, I’ll give you one right now. I was in California in… I hope my people in California don’t get angry about this. I went to California with my wife two, three weeks ago for a wedding, and there’s this really great hotel in Santa Barbara, and we wanted to go there. So I go onto our sites. We don’t have it. We don’t have it at all. I’m like, “Why?” Because they chose not to. They choose not to. Some chain… Now this anniversary, we’re looking at a place in Upstate New York, not on our site. Nobody has to be on us at all. They come on because-

Schaal: Something’s wrong, Glenn.

Fogel: Wait, wait. Let me finish, okay? They come on because we offer them a value that they think is good for their business. They get to choose. Nobody’s required to do anything. By the way, we’ll have hotels that come on, they’ll give us inventory, but as the inventory starts going away, because towards high season, who are the first people that they stop sell for? It’s the third-party distributor. Why? It makes perfect sense, because it’s going to sell the remaining rooms on their own site and make more money. So it’s really, I think, a misunderstanding by some of the people who are regulating this industry who need more education how the business really works.

Schaal: Let’s go to an audience question about experiences. Your CFO was at an investor conference last week and he basically said that “experiences aren’t a big money spinner for us”. There’s been a lot of hype about experiences. Steve Kaufer of Tripadvisor said that there would be hotel-like margins in experiences. The question is what is’s vision for experiences? How will experiences play a part in the connected trip?

Fogel: All right, so if you look at the total addressable market, what is the total amount volume of money in the attraction business? It’s substantially lower than some other verticals like accommodations, right away. So that’s talking about, you can never make the same amount of money. Just the size of the two verticals is very, very different. Now, what Steve Kaufer once said about the margin set certainly can be true, but it’s a much smaller amount total. Here’s the important thing about attractions, and I’ve given this example here. At Skift, I talked about this. I won’t use it. I’ll use a different one. The connected trip, the idea is that we provide you with a better way to do your travel.

When I’m traveling, I’m on the app, and I’m walking in a town that I don’t know with my wife. I want to have that popup thing from Booking saying, “You are 300 meters from this great museum and all you have to do… and here’s why,” and you just have to press this button, one button, and you’ll go right in and it’s all paid for. It’s you don’t need to wait in line and a ticket. That’s the idea. Or other things in attractions where things are selling out and letting you know, “We know that you like this particular… ” You’re going to Amsterdam, if you want to go to the Anne Frank House, you’ve got to get tickets early. So somebody is looking at the trip to Amsterdam, that we’re letting them know. These are all things, again, providing more value to the consumer. Attractions, it’s absolutely important, but we’re never going to have the same absolute profit. It just can’t be.

Schaal: Well, Glenn we’re out of time.

Fogel: Out of time. Well, thank you for having me again.

Schaal: Thanks, Glenn.

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Tags: booking holdings,, ceo interviews, glenn fogel, online travel agencies, sgf2022, skift global forum, vacation rentals

Photo credit: Booking Holdings CEO Glenn Fogel speaking at Skift Global Forum on September 20, 2022 in New York City. Neil van Niekerk / Skift Neil van Niekerk / Skift

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