Parent Booking.com CEO talks travel and leadership
The travel recovery helped Booking Holdings Inc. post quarterly profits, and Wall Street expects the company to post even stronger profits this year.
The company, which operates its namesake website, Booking.com, as well as Priceline, Kayak and other travel and dining sites, earned $1.8 billion in the first three quarters of 2022. customers are running more than a third ahead of the year- ago pace.
The stock, while ending down 16% in 2022, is holding up much better than the shares of competing online travel agencies.
CEO Glenn Fogel recently spoke to The Associated Press about whether the rebound in travel is sustainable, the uncertainty surrounding the economy and his management style. Responses have been edited for length and clarity.
Q. You posted record third quarter earnings and analysts are expecting a strong fourth quarter. What are the prospects for the new year?
A. Gross bookings for the first quarter are up 25% compared to 2019, so that was a very positive sign. It’s always a very early indicator, and things can change, there can be cancellations — we’ve certainly seen that over the past few years. But we are encouraged by what we see so far.
Q. Airline and hotel prices have risen sharply. How long can consumers afford these prices?
A. The prices are very high. These prices wouldn’t be so high if there was no demand – simple supply and demand. One hypothesis is that people have accumulated significant savings over the past few years due to various government programs and people being locked up in their homes. So people have accumulated savings, and now they want to spend them.
Q. But won’t they run out of those savings, and it will be soon?
A. Well, that is the question. At what point do we return to, say, a 2019 world in which people had less savings and higher levels of debt? And are people starting to correct there or not? One thing that no one knows is what will happen with our economies in the future, the US economy in particular. At the moment things are going well. Right now, we’re hopeful.
Q. How does working from home change travel demand?
A. If people are on a flexible work schedule – meaning they only have to show up at a specific location once in a while…they work from a location other than they will also combine with vacations. You see this in the increased number of trips on Thursdays and Fridays. I don’t know how companies track the amount of work actually done on Friday afternoons.
Q. Booking Holdings is very exposed to Europe. Do you need to expand to the United States?
A. We believe it is important for us to continue to grow our share in the United States. One of my jobs is to make sure we make ourselves as aware of the American traveler who wants to find a home in the United States as any other part of the world. Our U.S. room night growth rate in the third quarter was up about 30% from 2019. That’s a huge leap, and we’re definitely gaining market share and hopefully we’ll continue to do so. .
Q. Airbnb is stepping up its search for people to list their homes. Do you do the same?
A. Some time ago, people who owned a house might go to a platform and list it themselves. (Now) there are intermediaries. They are people, professional managers, who will take care of the registration for the owner, will manage all the problems. We go to large property managers who have a significant amount of inventory, and that allows us to have more choices, more different places for people to stay on our platform.
Q. What new products do you have?
A. One that I think is important is the area of sustainability, our Travel Sustainable Badge program. (Properties are categorized by tiers.) Some things are obvious, like changing your incandescent lights to LED lights, but there’s a whole lot more in terms of water, all sorts of things.
Q. But are consumers booking based on sustainability ratings?
A. Price is always the first thing that comes to someone’s mind, but that doesn’t mean they don’t care about durability.
Q. How big is the problem with fake reviews and how does it affect the business?
A. We already do a very good job of making sure that what is broadcast is the opinion of someone who has at least actually experienced what they are commenting on. You cannot post a comment or review on a hotel unless you have actually stayed in a hotel on our platform. If we see an interesting change in someone’s review score, our machine learning will immediately say, “Hmm, that’s an anomaly.” We should look into that.
Q. Has your management style changed since becoming CEO?
A. As you get older, you recognize how important it is to reserve judgment and wait, to think things through before making decisions — how important it is to let things work their way out. When I was much younger, I had a higher percentage chance of thinking I knew the right answer right away.
Q. You are 60 years old. How long do you plan to stay and what is the succession plan?
A. (Laughs) This is something I discuss with my board. It is always important for all businesses to keep in mind that no one is ever in a job forever. I will say that I like this job, I like what we do.