Glenn Fogel, Booking Holdings CEO, joined Yahoo Finance to discuss the travel outlook for 2021 and beyond.
SEANA SMITH: Booking.com is out with new research showing that there is serious pent-up demand for travel and that Americans just can't wait to pack their bags and go. We want to bring in Glenn Fogel. He is the CEO of Booking Holdings.
And Glenn, it's great to have you. The results of this survey really show that people are certainly excited to travel, and so much so that 68% said that they would rather travel than find true love. 70% said that they would be willing to give up their favorite vice in order to travel. How quick of a rebound are you expecting to see?
GLENN FOGEL: Well, there absolutely is a lot of pent-up demand. We're beginning to see it start to come out. We know that people love to travel. And basically, they're waiting to feel safe. And now that people are beginning to feel safer, they're getting their vaccines, they're feeling it's OK to go travel, we're beginning to see it happen, which is why we're trying to make sure that everybody gets out there.
We're offering an incredible promotion of $50 as a post-stay promotional credit. So come to Booking.com, the app. You stay. You get a $50 credit. We're hoping to really stimulate this industry.
ADAM SHAPIRO: We've had on people like Nick Calio, who's the president and CEO of Airlines for America, the trade group, who said essentially what you just said, people want to feel safe. They also want to feel safe in the destination they're going to. There's this proposal out there, possibly, for some kind of COVID-19 passport to guarantee you've been vaccinated to get into restaurants. Would that slow down this-- this travel recovery that we're witnessing?
GLENN FOGEL: I think the element really is, is making sure that people feel safe when they travel and feeling that when they're going to different places, whether it be a restaurant or something, do they feel comfortable or not? And there are different variations on this. Certainly from our point of view for travel, we know there are certain places that nobody's traveling right now, because governments don't want to have people come visit because they don't think that necessarily everybody's going to be safe coming.
But countries like Iceland, for example, are saying, look, we don't want everybody coming, but we're more than happy to take people who can prove that they are safe to travel. We'll take you. You can prove that they either are vaccinated, or if they have proof that they are not carrying the virus through a test right before they travel, or if you recently were sick and you can prove that now you're better so you have natural immunity, please come and visit. That's the type of international travel we need to start building. And if something like a technological way to show that you are a safe traveler, I'm all in favor of that.
SEANA SMITH: That's interesting there, because I think we've heard both sides of it, some people saying that they're not in favor of it, because they're worried that it would actually slow down the rebound. But it sounds like the argument that you're making is that it could actually help speed up some of the rebound that we could see. Glenn, you take a look at the projection just in terms of more and more people are booking, so there's demand there, how fast are you seeing prices then rise? And I guess, if you're thinking of booking something for, say, July or August, should you be booking right now?
GLENN FOGEL: You should have done it yesterday, actually. We are seeing those prices going up, whether it be airfares or hotels. We really are advocating please, come to the Booking.com app right now. Get in there. Find that hotel that you want. So much of our inventory is free if you cancel, so it's like a free option.
So come. Get it now. Lock in that good price now. If your plans change, you cancel. If you don't, you stay. You go through. After you stay, we give you that $50 credit. Why wouldn't you do it? It's a free option. I would do it immediately.
ADAM SHAPIRO: Do you think that the kind of restrictions we saw before the pandemic-- like the airlines, they would charge you for the bag, they would charge you for the air that was going to be in the bag, they would charge you for the air around the space for the bag, those things are all gone. Will they come back?
GLENN FOGEL: Yeah. Well, I think that it's always a function of supply and demand. When you have an airline and there's nobody in it, you'll do anything to get some people to please come into the plane and please fly with us because we need the revenue. As those planes fill up, of course, then there are going to be different ways to try and get more revenue out of those passengers. So it's clearly just a case of supply and demand. Right now, again, the idea is go get that fare right now. Lock it up now. Don't wait.
SEANA SMITH: Glenn, let's talk about some of the booking trends that you're seeing, what people are booking, where they're going, how they're getting there. Have you noticed any significant change in behavior on your site just in terms of what people want now compared to what they wanted a year or two years ago?
GLENN FOGEL: Well, it is interesting from a year ago. If you remember a year ago, it was the worst of the pandemic in the US, and basically nobody was going anywhere-- anywhere, basically. Then as the lockdown started to be lifted up, people traveled very locally. They were going by car. They didn't want to go far at all.
But as people feel safer and safer, we see that people are willing to go further and further afield, being willing to get on planes. Of course, the big limit is that there's not a lot of international travel. A US person can't go to Europe just for a holiday jaunt.
So that's keeping people from what historically would have been a lot further travel. Unfortunately, that's really hurting the industry. We really need international travel to come back. And the only way that's going to happen is if we have more people who are vaccinated and governments feel it's safe to travel.
ADAM SHAPIRO: I think all of us just want to get out and go anywhere, and flying is not something that would frighten us. But look at Delta. Delta had, I think it was 900 airplanes in their fleet, and now they're down to something like 500. The other airlines have cut back.
And for instance, Southwest is using this as an opportunity to modernize the fleet, the order for the 737 MAX. What do you think happens as we go forward with-- there's going to be-- the planes are going to be very crowded. But do you see them growing their fleets as international comes back perhaps in a year or two?
GLENN FOGEL: Well, I think absolutely the first thing is you got to get the planes out of the desert, and that's not-- it's not like you're pulling your car out of a garage. And I agree with you, there could be a case this summer, potentially, we don't know, but there could be a shortage of actual lift, because people really do want to travel. And the rate of vaccination in the US, it's going so rapidly, people could be saying, I'm absolutely going somewhere in the summer and find out, wait a minute, there are no seats available, because it can't just happen overnight.
Now in a longer term, absolutely, I believe that, look, fleets are always going to grow, because travel is always going to grow, though, of course, it's going to take time for us to get back to where we were in 2019, particularly because the business travel, that's going to be down for a while. And I suspect it will always be a smaller share of total travel, given the changes. Look what we're doing right now through this video technology, you and I having this great conversation. You don't need to go a two-hour meeting, fly all day, come back. You can do it by this, and that's going to come out of the business travel a bit.
SEANA SMITH: Glenn, real quick, we only have about a minute left here. But from your survey, 66% of Americans, 60% of accommodation owners surveyed that they want the government to do more to support the travel industry. Do you think the government should do more at this point to support the travel industry?
GLENN FOGEL: I absolutely would love it if the US government would do what some other governments are doing. We worked with Japan. Japan was putting together tax credits that help make it cheaper to travel to get that industry back up. We worked with the government of Thailand. They, together with us, we put together a package. We allowed people to travel that was cheaper using government funds.
It would be wonderful if the US government-- it's done so many great things in helping us in terms of this terrible crisis-- would put some money direct to the travel industry in terms of getting demand back up. Look, my company, Booking.com, we're out there, we're offering $50 to every single American who wants to travel. Come to the app. We're going to give you that post-stay credit.
I'd be wonderful if the US government were to come out and help us out also and offer up some direct subsidies to help people start going. 20%, almost, of the hotel industry is unemployed right now, 20% of those people. And those are incredibly entry-level jobs that are necessary to help bring back this economy. I would love it if the US government would put some money directly into the travel industry.
SEANA SMITH: Glenn Fogel, great speaking with you, CEO of Booking Holdings. We hope to have you back again soon.