It would be easy to assume that 2020 couldn’t get much worse for Glenn Fogel. In February, the boss of Booking Holdings was already scrambling to keep up with waves of cancellations. Millions were pulling their travel plans over fears of Covid-19, and the sector was bracing for a severe downturn as holidaymakers were told they would need to self-isolate.
Within the next few weeks, things would go from bad to worse. Fogel himself contracted Covid-19 — “luckily a very mild case” — and, at the same time, bookings across the company’s Booking.com, Kayak and Priceline.com sites fell off a cliff.
By April, booking numbers were down by more than 80pc year on year, the company’s value had fallen by a third and, a few months later, it was forced to cut a quarter of its workforce, equal to around 4,000 roles.
“In my heart, for a long time, I hoped that this would not happen,” Fogel told staff at the time. “But, nothing can mitigate the impact this crisis has had, and will continue to have, on both the travel industry and our business.”
“Things are getting worse, not better in many countries,” says the 58-year-old with a sigh, as he speaks over a video call from his home outside New York City. Recent figures showed revenue slipped 50pc in the third quarter to $2.6bn (£2bn). “The fear is that things will not improve quickly.”
CV Booking.com
But, Covid-19 is not the only thing weighing on Fogel’s mind right now. The pandemic may have ravaged Booking, but Fogel seems resigned to the fact.
It is something else which is riling him up now. “One of the biggest issues right now is competition,” he says animatedly. More, specifically, he wants to talk about “what’s happening in Brussels”.
In recent weeks, Fogel has been paying close attention to new rules that are currently being drafted by the EU over the digital sector. Details over the upcoming legislation remain murky, but it is thought that tougher restrictions are set to be imposed on the companies the bloc deems to be “gatekeepers”.
The legislation is being drafted to take on tech leaders, names such as Amazon, Google, Apple and Facebook. Unsurprisingly, all those companies are expected to be classed as “gatekeepers” and subject to more arduous rules. More surprisingly to Fogel, Booking Holdings’s Booking.com site is expected to fall under the classification too.
“It’s just nuts to me,” Fogel blurts out. “Travel is so competitive. We’re fighting every day to get business — every single day.”
In his view, “there is no gatekeeper” in travel. It is not just Booking.com which he says should not have to face these tougher restrictions. Rival Airbnb should also be exempt. “Yes, companies that are being abusive should be more closely scrutinised, but I say this very clearly, Booking.com is not a gatekeeper. There just aren’t gatekeepers in travel.”
There are various figures to back him up. In Europe, less than 15pc of all hotel revenues come from Booking.com. Online, there are more than 130 travel agents customers can choose to book their hotels through.
What’s more, before Covid hit, almost two thirds of all hotel bookings were still being done offline, with customers either phoning up hotels themselves, booking via physical travel agents or walk-ins.
These figures are yet to convince everyone, though. In the UK, a House of Lords select committee surveyed hotels, fielding responses that claimed it was “difficult to compete with the online presence of Booking.com”. “The sheer size of the challenge would mean I would need to spend a budget too large to try and compete,” another hotel had said.
Estimates also suggest that in the “online travel agent” sector in Europe, Booking.com’s market share is around 70pc — something critics say shows its hold over the sector.
Fogel rejects such criticism. “I bet when people look at travelling, they don’t say, ‘oh there’s only one place I can book with’.
Travel freely poll
“People look at a lot of different ways to book. The regulators don’t understand that more than half of hotelier’s business comes to them directly, and they have ways, through very easy-to-use technology, to distribute their rooms to many different retailers like ourselves, or maybe Expedia, or maybe Tui, or a wholesaler. They can send them anywhere and they do.”
At Booking, there is another thing at play here. Booking Holdings may be headquartered in the US but its Booking.com site, the expected subject of the new tougher rules and Booking’s largest business, is headquartered in the Netherlands.
For Fogel, it seems this would make any harsher rules a tough pill to swallow.
“Booking.com is one of the very few success stories in Europe,” he says. “The last thing I think anybody would want to do is come up with regulations that will hurt one of the few success stories and help many of the other non-European tech companies.
“It would be detrimental to technology in Europe more generally, and would in the long-run be detrimental to us ever being able to develop great worldwide tech giants” Fogel pauses. “By us all, I mean Europeans,” he explains, a reference to the fact that he himself is not European, but from the States — splitting his time between New York and Amsterdam.
Stricter European Union rules would likely not only hurt the bloc’s tech ambitions, Fogel says. “Certainly, the UK could come up with different regulations coming out of the EU. But here’s the issue, what we need is everybody to be very careful in the regulatory area. You could have countries not regulating here, but if another group of countries does, it could be very negatively impacted.”
Of course, he adds quickly, there should be some regulation. “Markets don’t exist without regulations, but they need to be good regulations.” Without that, it’s just “chaos” he says.
It’s fair to say that, even without this upcoming red-tape on the horizon, Fogel is in an industry which is already in chaos. Almost nine months after many countries shut down for the pandemic, hotels, airlines and restaurants have all been warning over imminent collapses.
Figures from the Office for National Statistics this month suggested a third of hotels and restaurants feared going bust over the winter.
The question is now what that means for Booking Holdings, which also owns restaurant booking site OpenTable alongside its travel booking portfolio.
Fogel admits it won’t be an easy period. “We’re hoping that someone just flicks a switch, and suddenly the world is beautiful again, but that’s not the way it’s going to work. I’m sure there will be setbacks somewhere.”
But, he isn’t too concerned that choices will dry up for customers. “Hotels don’t disappear,” he says. “Owners may lose their ownership but if it’s a good hotel and a good location, a new group will come in. I’m not concerned about there being a shortage of hotels at all. A lot of restaurants are closing their doors, but as soon as people can go out to eat, new restaurants will pop up. It’s the nature of dynamic capitalism.
“I guess I’m more concerned about the demand side of things.”
Certainly, so far, there has been no uptick in this. Across the world, hopes may be buoyed that a vaccine is on the horizon. Fogel himself is even on the waitlist for a hotel in Utah for a ski trip.
But, across Booking’s business, most customers haven’t made the plunge to book their 2021 getaways yet.
“We’re all hopeful that by the spring, some of these mitigation effects governments are putting in, people being vaccinated, there’ll be an improvement. But, we all know it’s going to take time. There might be a lot of pent up demand, but for many people, it will come down to how safe it is. And it won’t be enough to bring us back to 2019.”
This year may have been difficult for Fogel. Now, the hope is that next year there will be slightly fewer hurdles to overcome.
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