Booking Holdings CEO on bout with coronavirus: ‘Nothing to laugh about’
The outlook for online travel is cloudy at best. There is no certainty as to when travel restrictions will be lifted as more U.S. states call for citizens to stay at home and coronavirus cases continue to climb.
Booking Holdings CEO Glenn Fogel told CNBC’s “Squawk on the Street” Thursday, “I think people are scared. It is very natural right now … People are much more concerned in terms of their immediate needs.
“You have people that are more concerned about, ‘am I going to have a job’? They’re thinking about that a lot more than, ‘am I going to go away in July somewhere or not?'” Fogel said.
Fogel disclosed to investors in an 8-K filing and a memo to employees on Wednesday that he had tested positive for coronavirus after experiencing mild symptoms last week. He had been tested a week ago, but found out Tuesday evening what the results were.
When asked how he was doing, Fogel said, “I feel fine. I feel great. I haven’t had a symptom in many, many days.”
Fogel said his own personal experience with coronavirus has made him more sympathetic to what so many people are struggling with right now.
“I totally feel for everybody. Having been through this myself, I know this is nothing to laugh about. I’ve been so fortunate, so lucky to come out of it. I know there are a lot of other people that are not coming out quite as easily,” Fogel said.
As consumers and small businesses face tough decisions regarding finances, travel has been put on hold. Many companies including Booking Holdings, which operates travel websites such as Priceline.com and Kayak.com, have paused all nonessential travel for the time being.
Data from Suntrust Robinson Humphrey and STR shows hotel occupancy plunged 67.5% in the week ended March 28. Hotel revenue per available room, also known as RevPAR, fell more than 80% for the same week, pushing more properties to close their doors.
Airline passenger traffic down 70% to 80%, according to data reviewed by RBC Capital Markets.
The decline in air traffic comes at a critical time for the online travel industry.
“This is also the busiest time of the year for online travel operators in terms of bookings for spring and summer travel – at least in North America,” Mark Mahaney, managing director covering the internet and online travel sector at RBC Capital Markets said.
Expedia Group announced in late February, it was cutting 3,000 jobs. So far, Booking Holdings, which has 27,000 employees, has unveiled a hiring freeze.
“Of course, after people are done worrying about their health, they worry about their jobs too,” Fogel said. “This industry is taking it harder than any other industry. People are losing their jobs left and right, and that’s why we need the government to step up and help support the travel industry.”
As to when travelers will feel confident about getting on an airplane or staying in a hotel, Fogel said, it’s hard to assess but he doesn’t see travel returning to normal activity this year.
“It’s going to be a function of people feeling safe … Maybe 2021, we have vaccines,” Fogel said. “Maybe 2022, the whole world is just thinking about ‘hey, this virus is just like … No one has to worry about it anymore.’ We all hope that’s the case. It’s going to take time … It’s not going to be happening this year.”
One preliminary trend travel executives are watching is the slow recovery in Asia. Marriott CEO Arne Sorenson told CNBC last week that China occupancy is improving, albeit slowly.
Fogel said Asia is coming back but that it will take time. Booking Holdings shares, which have a market value of about $51.7 billion, are down 39% so far this year.