Closed borders, deserted cities and planes stuck to the tarmac: the Covid-19 pandemic had put the tourism industry on hold. This painful page seems about to be turned. In any case, this is what the latest results from one of the giants of the sector, the online hotel reservation site Booking.com, reflect. He has just announced a record annual turnover of more than $21 billion, up 25% compared to 2022. Speaking to L’Express, Glenn Fogel, his boss, mentions “revenge” taken by frustrated travelers during the health crisis. And speaks about the enormous challenges ahead, with the rapid deployment of generative artificial intelligence, as well as global warming, which should each in their own way rethink the way we travel the world. Interview.
L’Express: Booking has published sharply increased financial results for 2023. So has global tourism turned the page on Covid?
Glenn Fogel: Our platform recorded more than a billion nights booked last year! We are more than satisfied with our performance, which is based on a long-term improvement in our services, both for consumers and for partner hotels. This leads us to believe that the foundations for the future of the company have been laid. We are also expecting an excellent year in 2024. It is true that many regions in the world have overcome the health crisis. Unable to travel for several years, people all wanted to leave at the same time, which we clearly benefited from. In English, we talk about “revenge travel”, a sort of revenge taken during the Covid period. Other populations are still emerging from this phase. China, for example, remains significantly below its 2019 level – a reservoir of growth, therefore, for us. But overall, the benefit of the post-Covid recovery tends to dissipate now, we are entering a more normalized environment.
Is the conflict in the Middle East disrupting your activities?
Yes, in the fourth quarter of 2023 our numbers were affected. We estimate that the growth in our room reservations would have been 2 points higher, i.e. 11% instead of 9%, without these tragic events. In the first quarter of 2024, this should still cost us around 1 point of growth. Obviously, our first thought is of the massive human cost of this conflict. But we also need to recognize that this will have an impact on economic activity. For Booking, which is a global company, this does not prevent us from maintaining a very positive long-term vision of the future for the tourism industry.
What will be your main drivers in 2024?
The first is the growth of the global economy: a rising GDP translates into more travelers, and that is good for us. This is mainly due to the section of the disadvantaged population which falls into the lower middle class and can then afford holidays. Traveling is one of the first things households do when moving out of poverty. Added to this is an underlying trend: those who do not yet use the Internet to organize their stays will gradually convert to online booking. We are also counting on improving our quality of service to gain market share from our competitors. And we are continuing our latest developments: we started marketing plane tickets in 2019 – until then, in the United States, we relied on another of our companies, Priceline. In four years, our sales have quintupled. We also offer other services to our customers such as car rental, or travel insurance, as well as transfers, from their home to the airport, from the airport to their hotel. New activities that will contribute to our growth. From now on, the ideal would be to combine them to facilitate the entire travel reservation, rather than fragmenting purchases, often a source of problems of all kinds. So we are working to offer a single point of contact, where our customers can take all the necessary steps. We call this the “connected trip” [NDLR : voyage connecté].
How the Paris 2024 Olympic Games will they contribute to your performance?
Between those who will give up spending their vacation in Paris because they fear the excitement of the Olympics, and those who will come expressly to attend the event, I think that ultimately, for Booking, there will be no of particular impact, neither positive nor negative. Personally, I hope the weather will be nice because… I would like to come!
However, are you observing certain trends today, in terms of reservations and prices?
Of course, prices will increase as we get closer to the Games. However, and we have observed this type of phenomenon in the past, from a certain point, just before the event, we observe a sudden drop in prices. Quite simply because those who hoped to get exorbitant prices for their rooms or apartments ultimately found no takers. And are then ready to rent them at all costs.
Before the Olympics, another event is looming in France: the Taylor Swift concerts in May. Are you seeing a “Taylor Swift effect” on your bookings?
Yes, if it continues to move, it’s good for the economy! What we observe is that some Americans travel very far to attend his concerts, to countries where tickets are so much cheaper that the difference exceeds the cost of the flight. The Taylor Swift effect is positive for the local economy, less so for the environment…
In this regard, the fight against global warming requires today to wonder about tourism, on our travels. Are you working on recommendations for “greener” travel?
Absolutely. If a user writes to us: “I live in Paris but I have to travel to Dubai. I want to proceed in the most ecological way possible and according to a precise budget”, we must be able to offer them different flights depending on the type of plane , emission levels of the journey. Advise him of alternatives, why not starting with a train from Paris to go to another destination which will provide him with another mode of transport. Or simply suggest that he travel at another time of the year, because then he will have different, less polluting flights. However, this will not be automatic. We will do what the consumer wants. This has always been our belief. It’s not our place to try to change the rules of the game. We just want to provide as much information as possible so that person can make a lasting choice. Afterwards, you know, it’s not always easy. Two years ago, we developed a green labeling system for hotels around the world, but it did not please some national regulators, who required assurance from an independent third party. We had to abandon this idea. However, we thought it was a good initiative, and that it would help convince travelers to choose hotels with more ecological practices. We must now change course.
How are you approaching the artificial intelligence (AI) revolution?
We have developed a travel planning tool called “AI trip planner”. A user types: “I’m interested in a five-day stay in the south of France. What do you suggest?”, and that gives him ideas. Then, if he wishes, he can initiate a discussion, ask for details like from a real advisor from a travel agency. It’s not perfect yet, but it’s a good starting point when booking a hotel. Priceline has also developed a tool called “Penny”. It is a chat agent that allows you to ask any question, at any time during your reservation. Usually, customers ask if there is parking. Many also use it when welcoming their dog. What’s rather funny is that here again, real conservation naturally takes place. “Penny” says, “Yes, you can bring your dog.” And people add: “But you know I have a very big dog…”. In any case, AI will benefit us enormously over time. Our customer service will be able to operate much more quickly. Beyond our activities, work remains on the implications of this technology, as well as its reliability. For hotel reservations, if you make a mistake in the recommendations, it will not endanger the world. For other areas, health, for example, it’s a different story.
Are you ready for the implementation of the Digital Markets Act (DMA), legislation on digital marketswhich must come into force on March 7, and promote online competition?
I’m not worried. What concerns me is that the Digital Markets Act ultimately only applies to a very small number of companies. Competitors like Expedia in the US or Trip.com in China are as big as us, but because of the way the DMA was built, they won’t be affected in the same way. So I hope that this text will not harm the European economy or European jobs [NDLR : le siège social de Booking se trouve à Amsterdam, aux Pays-Bas]. Generally speaking, we must ensure that we create a regulatory framework that will allow the European technology space and European industry to be as competitive as others. How is it that the continent has some of the best universities, the best fundamental research chairs, and that we do not have as many technological giants as the United States or China?
Will the fine of almost 500 million euros that the Spanish competition regulator wishes to impose on Booking for unfair competition have consequences on your activities in Europe?
I would like to clarify that this is only a preliminary announcement and that the fine is not finalized. Afterwards, we are inevitably disappointed and in total disagreement with the conclusions of the Spanish regulator. We believe there must be fair rules. On the other hand, having separate competition authorities at different national levels, with different rules, does not help big tech companies. We believe that it is up to Brussels, particularly within the framework of the DMA, to decide on these questions.
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