The travel recovery has boosted Booking Holdings Inc. to record quarterly earnings, and Wall Street expects the company to post even bigger profits this year.
The company, which operates its namesake website, Booking.com, plus Priceline, Kayak and other travel and dining sites, has earned $1.8 billion through the first three quarters of 2022. Customer bookings are running more than one-third ahead of the year-ago pace.
The stock, while finishing down 16% in 2022, is holding up much better than shares of rival online travel agencies.
CEO Glenn Fogel spoke recently to The Associated Press about whether the rebound in travel is sustainable, uncertainty about the economy, and his management style. The answers have been edited for length and clarity.
Q. You had a record third-quarter profit, and analysts expect a good fourth quarter. What's the outlook for the new year?
A. Gross bookings for the first quarter are up 25% over 2019. So that was a very positive sign. It’s always a very early indicator, and things can change, there can be cancellations — certainly we’ve seen that over the last few years. But we are encouraged by what we see so far.
Q. Airline and hotel prices are up sharply. How long can consumers pay those prices?
A. The prices are very high. Those prices would not be so high if there wasn’t demand -- simple supply and demand. One hypothesis is people have built up large savings during the last few years because of the different government programs and the fact that people were locked down in their homes. So people built up savings, and now they want to spend them.
Q. But aren’t they going to exhaust those savings, and will that be soon?
A. Well, that is the question. At what point do we get back to, say, a 2019 world in which people had a lower amount of savings and a higher level of debt? And do people start correcting there or not? One thing that nobody knows is what’s going to happen with our economies going forward, the U.S. economy in particular. Right now things are good. Right now we’re feeling hopeful.
Q. How is working from home changing travel demand?
A. If people are under a flexible work schedule -- meaning they only have to show up at a set location some of the time ... they are working from another location that they will also combine with a vacation. You see that in the increased amount of travel on Thursdays and Fridays. Not sure how the companies are keeping track of how much work is actually being done on Friday afternoon.
Q. Booking Holdings has a lot of exposure to Europe. Do you need to grow in the U.S.?
A. We do believe it’s important for us to continue to build our share in the U.S. One of my jobs to make sure that we make ourselves as aware to the U.S. traveler who wants to find a home in the U.S. as any other part of the world. Our room-night growth rate in the U.S. for the third quarter was up approximately 30% versus 2019. That’s a huge jump, and we definitely are gaining share and I hope we will continue to do so.
Q. Airbnb is ratcheting up its search for people to list their homes. Are you doing the same thing?
A. Some time ago, people who owned a home would perhaps go to a platform and list it themselves. (Now) there are intermediaries. These are people, professional managers, who will take care of the listing for the property owner, handle all the issues. We’re going to large property managers who have a significant amount of inventory, and that enables us to have more selection, more different places that people can stay on our platform.
Q. What new products do you have?
A. One that I do think it’s important is the area of sustainability, our Travel Sustainable Badge program. (Properties are rated in tiers.) Some of the stuff is obvious like changing your incandescent lights to LED lights, but there a lot of other things in terms of water, all sorts of things.
Q. But do consumers book based on sustainability ratings?
A. Price is always the first thing on someone’s mind, but that doesn’t mean they don’t care about sustainability.
Q. How big a problem are fake reviews, and how does that affect the company?
A. We already do a very good job making sure that what’s put on is an opinion of someone that at least has actually experienced whatever they’re commenting on. One cannot put a comment or a review on a hotel unless they’ve actually stayed at a hotel on our platform. If we see an interesting change in someone’s review score, our machine learning will immediately say, ‘Hmm, this is an anomaly. We should look into this.’
Q. Has your management style changed in the time you’ve been CEO?
A. As you age, you recognize how important it is to reserve judgment and wait, think before making decisions — that it’s important to let things settle. When I was much younger, I had a higher-percentage chance that I think I knew the right answer right away.
Q. You're 60. How long do you plan to stay, and what's the succession plan?
A. (Laughs) That’s something that I discuss with my board of directors. It’s always important for all companies to keep in mind that nobody is ever in a job forever. I will say I love this job, I love what we’re doing.
