Booking Holdings has been built by acquisitions over a very long time, said CEO and President Glenn Fogel at the 2022 TravelDaily Conference in China. He mentioned that the company is still looking at possibilities of acquisition, but at the same time, he wants to “concentrate on the priorities.”
For Fogel, buzzwords like super app, metaverse or blockchain are further down the road than what the group needs to get accomplished right now. He has a vision for Connected Trip, although it’ll take many years to really build out.
Despite the uncertainties in China, Fogel is still bullish about the long-term future of travel in the country. He is also confident that Booking Holdings’ cooperation with Meituan and Didi will be mutually beneficial and create better experience for travelers.
Fogel also shared his views through a virtual talk with Charlie Li, CEO of TravelDaily China, about short-term rental, competition with Hopper, and key factors for a travel company to succeed in the next decade.
Following are excerpts of the interview
Charlie: Last November, Booking Holdings announced the acquisitions of Etraveli and Getaroom with a total price of USD 3 billion in just two weeks. Why would Booking invest so much capital to acquire B2B consolidators, especially under such uncertainties?
Glenn: Let's separate out the two different acquisitions. Getaroom basically helps connect us to other parties that have customers who don't necessarily do hotels. Maybe they do or they don't, but it's a B2B business that we had been doing for a long time.
And we saw that Getaroom had some customers and some technologies that we liked a lot, so we brought it in. And it's really just a bolt on acquisition, helping us to improve a business that we’re already doing well, B2B. And that was for Priceline.com, which is one of our brands in the US. We bought it and closed the deal in December. That's now up and running, and that's good.
The other one, Etraveli. That's a different business that deals mainly with flights. Now, that business is something that we signed the contract to buy, but it hasn't gone through all the regulatory approvals, so we have not actually had a pay yet, while the regulators in the EU continue to evaluate this transaction.
So we haven't closed on that transaction yet. But the reason we wanted it is Booking.com grew up doing just hotel and short-term rentals, but it didn't have a flight business at all, so we wanted to do flights also.
We now have a flight product, but the back end of it is powered by Etraveli, and we've been doing that with them for two years on a commercial basis, and we're doing a good job together. And we said, “These are smart people. Let's buy the company so we can do it better together.” That's the idea.
Charlie: Okay. So is Booking Holdings expecting to expand the business through more acquisitions in the coming years? How are you choosing your acquisition targets?
Glenn: Well, the same way we always have done. This company has really been built by acquisitions over a very long time. It started off as just Priceline.com in the US, but then we started buying companies like Active Hotels in the UK and Booking.com in Amsterdam.
And then we bought Agoda based in Singapore and Bangkok. And we bought a company called Kayak, which is based in Boston.
And then we bought Momondo in Europe. And we bought OpenTable to be able to have restaurant reservations.
So we've always been building this company by looking for great management, great companies that have something that we don't do well, or they can expand something we do well, but they can make it even better.
I'm always looking at possibilities. But as we always say, we don't have to buy anything. We can continue to build things internally also, which we do also. So we always just evaluate things.
I can't say whether there will be more or less acquisitions, but I will say we will always look at opportunities and then make a judgment. Is that the best use of our capital, or is there another way we can deploy our capital to provide a better return to all our stakeholders?
Charlie: In China, Booking Holdings invested Meituan and Didi, what has the investment brought for each side? What's your plan for further cooperation?
Glenn: Well, we are very enthusiastic about the long-term future of travel in China. And people in China will want to travel abroad again as soon as it's easy to do it again. As soon as the rules are reduced and people can go travel, I believe they're going to go and travel. So there are lots of ways to try and get the customers to use us.
One of the ways we want to do it is to work with established companies that have big customer bases, like Meituan and Didi, and come up with a way to cooperate so that we both together can create a great experience for their customer basis and go on travel. And both companies will prosper because of this.
But right now, there's not much to be done, because there's not a lot of outbound travel right now coming out of China, given the unfortunate situation with Covid.
Charlie: Talking about your China strategy, as Airbnb shut down its domestic travel business in China, will Booking shift its strategy in the China market? Have you changed your view about Booking's position in the China market after the pandemic?
Glenn: Well, we hope to pick up where we left off in 2019, where we had good business, but not as good as some other people. There are some very, very good companies in China that do travel. They are competitors, and they do a very good job. We'd like to improve upon that, of course.
Although we have the idea of leaving travel in China, it’s not saying, we're not going to do it, but saying, I want to be part of the biggest growing share of travel in the long run.
We all look at the numbers. Look at the number of people in China who will want to travel over, the next 20 years. Is there any other country that's going to have that much travel 20 years from now? I don't think so. I think China, 20 years from now, will have more travel than anyone, and we need to be part of that. So we always have to think about this in terms of the long term.
Yes, right now, we are not strong in the domestic market, which is where there is travel for China right now. But we offer great opportunities for people who are traveling out of China, who are going to leave China and travel anywhere in the world.
And we also offer great opportunities for people who want to visit China, which also is not happening right now. When those things both come back, we'll be there to participate in it, and we're looking forward to that.
Charlie: People have been talking about the metaverse and blockchain for a long time, actually. So what's your view on their impact on the travel business?
Glenn: Right now, as we're talking the world of blockchain, in terms of currencies like Bitcoin, Ethereum and all those other ones.
There's a lot of news about this over the last couple of days, where it seems to be having a lot of problems right now.
I think the basic concept of blockchain is very interesting and may have some applications in our industry. But again, that's farther down the road than what we need to get accomplished right now. Right now, we need to get accomplished for things I talked about.
But I do agree with people who say that blockchain has some potential opportunities, and not just in Bitcoin or things like that, not just cryptocurrencies, there are other things that are important in our industry.
In terms of the metaverse, I have not visited the metaverse yet. I'm not that familiar with it, to be fervently honest. I do know that, like many other people, I have not gone to the metaverse in terms of Facebook, Meta.
Look, it may be very interesting, but again, I think it's far down the road. What's so important is making sure you concentrate on the priorities. What is the most important thing to get done today and tomorrow and next month, the next quarter, next year? It may be two years or three years.
For things like blockchain and metaverse, they are interesting and many others work on that. But for now, we'll spend time working on the things we know we need to get done soon.
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