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Booking Holdings President & CEO Glenn Fogel Talks AI Competition, Global Travel
00:06:37
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Bloomberg Audio Studios Podcasts Radio News Wall
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street weighing in on a strong quarter for bookings Holdings. Citi says that results show the outlook with a broad strength Evercore. ISI says core trends remain solid despite slightly softer profit guidance. The company also announcing a 25 for 1 stock split. Let's get more details now from the company CEO Glenn Fogel, who joins the program. Glenn, great to see you. And look, the analysts said it there it was a strong earnings. So maybe we need to talk about the elephant in the room. Shares are down 8%. I can only imagine it's anxiety that seems to continue to be souring a lot of companies so far in the market these past couple of weeks. What is your response to concerns that AI is going to disrupt booking?
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Well, first, thanks for having me. And I got to echo what you said. I mean last night coming out with the numbers that we put out were just stellar. The whole year has been even though the world's been volatile and we've had all these economic we still power through accelerating each quarter and being able to come in almost adjusted EBITDA almost $10 billion, returning over 8 of it to a billion to the shareholders. This is just fantastic. Going well. And it's interesting too. It's not like the world changed anything from what we said last night that would cause people to be more concerned about AI affecting our business, a positive for our business. That's what's so interesting. And I'm not sure anything I said that would have caused anybody to think anything different. Clearly it's going to take some time for this all to shake out and the people see the benefits that we are producing through AI.
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Well, let's get to it because the criticism maybe goes, I can open up my Gemini or Chachi beat or whatever and have it book for me at some point. You know, my entire trip, a hotel, a flight and car. So why would I need booking holdings in any of the companies under your umbrella? Glenn, what would be your response to that?
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Well, we don't have the time to go through all the reasons and there are a lot why that is not the way the world is going to be. But I will say that here's an example of a path in the past where people have tried that. Look at Google, enormous company, very big at the top of the travel funnel. People going to Google first trying to figure out what they want. And Google tried. They actually did do this thing called book on Google and then they pulled back from that. Why? Because this business is a lot more complex than one would Think, I mean the supplier proposition that we deal with, we deal with over 4 million properties globally. And it's not all they just put in the prices and the availability up. This is some of the connectivity you got to work with day by day. And it's working with these managers of these properties in terms of what should they be putting out in terms of sales, in terms of geo prices, mobile prices. We have our loyalty program genius. I mean we talked last night about mid 60% of the people are coming to us direct and we have those AI tools. We're making even better. You can do your entire trip. It's not just the hotel, it's the flight, it's the ground transportation, it's attractions. What you do, putting that all together, stitching together with AI produces a much better thing. And then the customer service and the trust that it'll actually be done right. That's really complicated stuff that we do so well. And by the way, you tell me Gemini or ChatGPT are going to do this. Well, have fun with the merchant of record issues and regulations. I mean if you go to Europe, all the issues you have to deal with in terms of making sure you're doing this within the regulatory framework. I do not believe that the tech companies, and this is proved by Google, when they see how difficult, how much you need boots on the ground, they'll say, you know, we can make a lot more money on advertising, which is what Google does and together we made a lot of money. Now we're doing it with chatbots where we are one of the first people in, we're putting in advertisements at the bottom of the results that come out of chatbots. Perhaps they will move into more a Google way in terms of using an auction method for advertising, which wonderful for us and good for them, we'll see what happens. But the idea that people are going to be going to a large language model and doing their booking and it's all going to work fine and no problems, I do not believe that's the way the world's going to work.
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Glenn, I got to say, I really do feel for you. I mean it's a lot of CEOs in your position that are having to deal with this, that a market that's just like throwing everything out with the bathwater because they don't know how things are going to look. I'm curious from your end, what has it been like to onboard to hire, to find a talent that can guide booking into this next era? Because all of this feels relatively new, how difficult or maybe easy is it to get a handle of how you reshape booking to incorporate some of these AI tools.
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Yeah. So I'm in the company now 26 years. This is my 10th year as CEO. And yet look, technology has been changing over these quarter more than a quarter of a century. And trying to get the right people, the good talent to be able to do that. That's been done for a quarter of a century. Been doing that. It's no different now than it was in the past. And by the way, we started with AI more than a dozen years ago. Machine learning, machine learning models that were being used to make sure you saw the best properties. That's a I and now generative AI. Sure, it's, you know, you got to find the right people. But I'll tell you, we're not, we're not researchers doing the top end and we're certainly not spending hundreds of billions of dollars to build out new models like some of the frontier players are. We're using those models that doesn't require quite the same talent that are using in trying to come out with these new wonderful models.
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Glenn, if I can just jump in because we're running out of time and I don't want to only ask you about. I want to ask you about other things too. How is your customer right now? What is the strength, what is the willingness of people not just to book vacations and book all the things that go with it, but also spend on those?
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Yeah, no people want to spend is certainly the higher ends of the economic strata. People are definitely spending. You sense in our numbers and we came out with what we guide said looks good. And we definitely see assuming there are no macro events that happen, we assume that people are going to continue to do what they did in 2025, which is help explore the world. That's our mission, making it easier for everybody, experience the world. I'll tell you, it's a wonderful time right now for travel because not the excitement going out by using AI and all these new technologies.
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Glenn, thank you so much for joining this morning. We appreciate your time. Glenn Fogel, the CEO of Booking Holdings,