00:00I'm pleased to say that joining us now is Glenn Fogel, CEO of Booking.
00:04And Glenn, look, you and the company are used to disruptions.
00:08I mean, things like COVID, concerns about the economy, all of this.
00:11How would you rank this?
00:12Does this have any sort of historical corollary in just how severe this pullback was due to the disruption over
00:18the war in the Middle East and geopolitics?
00:21Well, thanks for having me.
00:22And it's a good way to start off.
00:24You know, I've had the pleasure of being in this company since the turn of the century, literally.
00:28So I was there when the first terrorist attacks in 9-11 happened.
00:32That shut down U.S. travel for some time.
00:34And then you went to the global financial crisis, really bad for travel.
00:38And then you go into things like COVID, bad.
00:41For us, things like the Russian invasion of Ukraine, we were very big in Russia and big in Eastern Europe.
00:47And then you have the Israel-Hamas thing and that very big in the Middle East.
00:51Now you have this.
00:51And there have been smaller things like volcano in Iceland that takes down European travel for two weeks.
00:57We have that issue.
00:58So this is just one aspect of being in the travel business where things are going to come up and
01:03it's going to impact short term.
01:05But the long term is always the same.
01:08And the long term is people like to travel.
01:11And travel is always in the long run going to go a little bit better than GDP.
01:15So as long as the world economy continues to increase over time, we'll grow faster.
01:21In the meantime, what exactly does seem to be the issue, Glenn?
01:24Is it just the fact that people can't get to the Middle East region or is it sentiment?
01:29Is it pricing that's too high that's deterring people from traveling?
01:32Well, I don't think it's pricing primarily.
01:35I mean, let's start with the basics.
01:37When there are drones and missiles and bombs coming down in an airport, people can't travel there.
01:42So right away, you're taking out a lot of travel right there.
01:46Then the important thing is that places like Dubai or Doha, these are incredibly important transit airports for people who
01:53are going from Europe to Asia or people from Asia to Europe.
01:56Really big.
01:57That stuff shuts down and all of a sudden you lost a lot of lift.
02:01And now there's going to be an impact on that.
02:03Then throw on top of that, consumer sentiment.
02:06People are concerned what's going to happen.
02:08So that hits it.
02:09Your price point is a good one.
02:11Price is up.
02:12People may not want to travel as much.
02:14All those things can compound and all of a sudden you're not getting as much.
02:17But for us, I'll tell you, the thing is we know in the long run it's all going to come
02:22back.
02:22Are you, though, preparing for increased costs?
02:26Just because even if the conflict does resolve itself, there's some questions to how quickly the Strait of Hormuz can
02:31open.
02:32I know in your outlook you have a recovery by year end.
02:34But, Glenn, what is the tail risk?
02:36What is the risk that energy prices stay elevated?
02:40Yeah, it could happen.
02:41I mean, everybody gets to guess at this, right?
02:43I mean, nobody knows.
02:45Nobody knows what's going to happen next.
02:47I don't know.
02:47You don't know.
02:49Nobody knows.
02:50But we know it will end at some point.
02:52And we all get to guess when it's going to happen.
02:54And that's why people have to come up with their best guesses, what they think the long-term thing is
03:00going to be.
03:01We think it's going to be sooner.
03:03We think that things will be good, starting, we talked in our call last night, about second half of the
03:08year.
03:08We're looking for the recovery.
03:10But that's our assumption.
03:12Everybody can make their own assumptions.
03:13What happens if that doesn't get cleared up in the back half of the year, Glenn?
03:17And is pressure enough that it gets even worse?
03:20Or is that desire to travel, does it reign supreme over any headwinds to cost or otherwise?
03:27Your point's a really good one.
03:28That demand for travel is so strong.
03:31We saw that in pandemic, right?
03:33As soon as a country opened up and allowed people to travel, they started traveling immediately and strongly.
03:40Remember, we called it revenge travel.
03:42That was great.
03:42Now, when's that going to happen, we don't know.
03:45And if the problem that we have in Iran continues for a longer time than some people are expecting, that's
03:50certainly going to impact travel during that time period.
03:53But that long-term, that's not going to change.
03:56Come back to me, look, when did travel really hit in pandemic?
04:00You know, it was March, March 2000 or so.
04:02So now we're into now April of 2026.
04:06That's all long past and things have come back really nicely.
04:09Well, I, you know, come back to me in five years and look at where we are versus then.
04:14That's that long-term view that we always take.
04:17Make sure that we're doing what we can control, which is making our service, our product better for our consumers.
04:22I can't control wars and politics.
04:25I can't control the price of oil.
04:27What I can control is making sure we're doing everything we can.
04:30Bring in things like AI to make sure things are better for our consumers.
04:33Making sure we're doing all the things that make it better to travel will be there when the travel demand
04:40is able to come back because of these exogenous factors.
04:43I know you look long-term, but I want to ask about an incredibly short-term thing because it is
04:47showing my own bias, Glenn.
04:49I myself want to go to some World Cup matches.
04:51First of all, they're insanely expensive, but, you know, got a pony up to see the big matches, I suppose.
04:56But even so, just looking at what's happened in New York City, some of the data I was looking at,
05:01some hotels are filled, like, 18 percent for the World Cup.
05:05Some host cities beyond New York are even lower in terms of capacity.
05:09Hotels expected a surge, and it didn't happen.
05:12What gives?
05:13Well, I think that's some incredible naivete among people who thought that this was going to be this incredible travel
05:20tsunami because of the World Cup.
05:22Look, again, I've been in this business for a really long time, and every time there's a major global event,
05:28World Cup, Olympics, pick whatever you like, and everybody thinks there's going to be this tremendous amount of travel, and
05:35then it doesn't happen, and people are disappointed.
05:37And that's just the nature of how these things are.
05:40There's a lot of incredible excitement at the beginning, but then people see the prices, think about the travel, and
05:46it doesn't happen.
05:46For us, the World Cup is always going to be a small thing.
05:49We're so big and so global, it's a blip.
05:53So I understand the disappointment that some cities are having right now, and some cities are getting a little benefit,
05:58for sure.
05:59I mean, Dallas in the summer, let's face it, Dallas does not get a lot of travel in the summer.
06:03So they ain't traveling again because of the World Cup.
06:05That's good for them.
06:06But I understand it, and, of course, the prices are very high in terms of those tickets.
06:10I also wonder if there's some political element to this, and beyond the World Cup itself, I, for example, was
06:16talking to a really big real estate investor who's saying,
06:19I don't know how I feel about hotels at this moment because international travel to the U.S. is still
06:24down.
06:24People are hearing stories of getting hassled at the border, and they decide, you know what, maybe I'm just going
06:28to go to Greece instead of coming to the U.S.
06:31Glenn, are you also seeing that divide between domestic and international travel?
06:35Yeah, no, it is disappointing.
06:37You know, as an American, I would love to have a lot more business coming to the U.S. for
06:42travel and helping our hotel partners, restaurants, all those things do better because more people come to visit.
06:49And it's still nowhere near where it was in the past.
06:52And I'm certain that part of it is politics.
06:55We are happy to see that the Canadian to U.S. has come back a bit, so that's a good
06:59thing.
07:00But it is an issue because there are a lot of places in the world to travel to.
07:04So if we don't compete well, which means promoting the U.S. is a great place to come and visit,
07:10our economy is being hurt by that.
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