Mergers and acquisitions are sexy for shareholders, analysts and the press. Booking CEO Fogel knows, though, that sometimes the best decision is not overpaying and walking away from that shiny object.
Whether it is out of ego or for personal financial incentives, companies sometimes do mergers and acquisitions for the wrong reasons, and many academic studies show that takeover deals generally turn out to be “losers.”
That’s the view of Booking Holdings and Booking.com CEO Glenn Fogel, who was interviewed several weeks ago on the subject of leadership for a podcast, C-Suite Conversations With Scott Miller.
Dealmaking can be incredibly perilous, Fogel said, adding: ““you are playing with live ammunition.”
Acquisitions can be very “disruptive,” Fogel said, and companies need to be aware of how these deals would impact shareholders, employees and customers.
Even before becoming CEO, Fogel was involved in many of the Bookiing’s acquisitions, including for Active Hotels (2004), Bookings B.V. (2005), Kayak (2013), and OpenTable (2014). As CEO, Fogel’s Booking acquired Getaroom (2021), and its proposed purchase of eTraveli Group is pending regulatory approval.
Fogel said he doesn’t recall ever making an acquisition for the wrong reasons although he’s tabled discussions and/or never returned to negotiations when he’s found out something about the management team he didn’t like or uncovered other problems.
Fogel Walked Away From a Deal in Europe
Although Fogel didn’t mention during the podcast any specific deal he’s walked away from, in 2018 he did talk about one for Skift’s The Oral History of Travel’s Greatest Acquisition: Booking.com.”
A rival, Expedia, announced the acquisition of Italian hotel booking site Venere in July 2008, but prior to that Booking.com management met several times with Venere’s founders in Rome about doing a deal, Fogel said.
“The founders were having arguments and they really wanted to sell it, be done and leave,” Fogel said. “And just hand it off.”
Fogel’s team asked the Venere founders who would run the brand if they departed, and they replied that Stef Noorden, who had served as Booking.com CEO, could head up Venere.
“Now Stef spoke many languages, like a lot, but he doesn’t speak Italian,” Fogel recalled. “He says, ‘I don’t speak Italian.’ “Well, you can learn Italian.’ We’re looking at them and say, ‘No.’ We just looked at each other said, ‘No. I don’t think having Stef learn Italian is really the right way to do this.'”
That was the end of that negotiation.
OpenTable Was Too Early
Asked during the recent podcast whether deals sometimes get consummated too early, Fogel acknowledged that the company’s 2014 acquisition of OpenTable, which has been subjected to impairment charges over the years, may have been premature.
When Booking acquired OpenTable, the thought was that the brand and its restaurant partners would be able to take advantage of travelers dining out during their trips rather than solely servicing locals, Fogel said. At one juncture, Booking had planned to integrate OpenTable restaurant reservations across the Booking’s various brands, but it doesn’t do that today.
“We still have not been able to really capitalize on that thought,” Fogel said, referring to travelers making dining reservations at their vacation spots. “So we were a little early on that.”
Booking Used Pandemic Lessons in Russia and Ukraine
Reprising an issue he raised at Skift Global Forum in September 2021 in New York, Fogel told the podcast recently that Booking was not nimble enough during the early stages of the pandemic in 2020 as it could have been despite frequently citing pandemic risks over the years in it its financial filings.
He said Booking was much better prepared starting in January 2022 for the Russia-Ukraine War, which broke out in late February of that year. Fogel said the company readied several scenarios and evacuated employees out of Russia and Ukraine, although he cited at least one tragedy.
Fogel said at one point Ukraine employees who fled Kiev returned to the office there because Kiev was considered safer than where they relocated to. “We lost an employee’s husband to a missile,” he said.
Fogel said it is important to keep business setbacks, such as losing a little money from time to time, in perspective because they are nothing compared to such a loss of life.
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Photo credit: Booking Holdings CEO Glenn Fogel knows the dynamics of deals gone right and wrong. He's pictured here speaking at Skift Global Forum in September 2022 in New York. Neil van Niekerk / Skift