Glenn Fogel joins 'Squawk Box' to discuss the company's quarterly earnings results, state of travel, weaker travel spending in the U.S., consumer travel demand, impact of AI, and more.

Amsterdam

Booking Holdings reported better-than-expected profit and revenue for the second quarter, driven by strong international bookings, particularly through its brands like Priceline and Kayak. CEO Glenn Fogel highlighted that while global travel demand remains robust, the U.S. continues to see fewer international visitors compared to pre-pandemic levels, which is impacting the domestic hotel industry. Fogel attributed this to a combination of geopolitical concerns and logistical issues such as lengthy passport control lines, despite a weaker U.S. dollar making travel more affordable for foreigners.

Fogel also addressed trends in consumer spending, noting a two-speed economy where lower-end travel segments face more softness, while frequent travelers continue to spend. He discussed Booking Holdings' ongoing partnerships with major AI companies, emphasizing that established relationships and technological adaptation have helped the company maintain its market position despite repeated predictions of industry disruption.

Booking Holdings CEO Glenn Fogel on Q2 results

Meantime, booking holdings beating second quarter profit and revenue estimates. International booking strengths Strengthening at the price line and kayak parent helped offset weaker travel spending in the U.S. Join us right now Glenn Fogle booking holding CEO. Good morning to you Is the YOLO economy continuing Glenn is that what this is that what these earnings are suggesting Well, good morning Andrew and thanks for having me and certainly we are very pleased with the second quarter numbers Did show a lot of people still traveling I think that's just the fact of life nowadays people like to travel and they're gonna spend their money that way So even in areas or perhaps there are softness in the economy people still are prioritizing going traveling So there is an issue though of folks coming to the u.s Something you actually pointed to a couple months ago when we talked what's going on there hasn't really changed Unfortunately, we still have an incredible deficit in terms of people outside the u.s Coming to visit us here. It's really sad because when you look at us compared to 2019 we are still below the number of people who came and visited in 2019 and that's bad for the hotel industry in the U.s. It's bad for the employees. It's not good and How much do you think that's a function of? Economic weakness in these other countries. How much do you think this is a some kind of political statement? And can you identify? Where there are certain countries where that used to come to the u.s. That may not be right now and what's going on Yeah, I think it's a factor. It's many factors. Look, obviously we see Canada the u.s. Way down But Canadians are still traveling. We see them going to Mexico. It's for our business because we're so global We're still getting the business but the people in the u.s. Who work in the hotels They're not getting those Canadian visitors and that you know, we'll see it in Europe Europeans not come to the u.s But we see Europeans are going to Asia or perhaps they're traveling within Europe We still get that business the American hotelier does not get that business now Why well, it certainly can't be because the dollar so strong so people can't afford it That's not it as we know US dollar has decreased making it cheaper for a foreigner to come visit So I have to I have to say it probably is some of the elements that we see in the geopolitical area For people saying, you know, I'm not sure I want to go to the u.s. Right now Maybe I'm gonna have a problem immigration passport control And one thing that's really big is going into the u.s If you are a non u.s Citizen you can have a really long line to get through that passport control you go back home You tell your friends I went to the u.s. It was a wonderful place to visit, but it took me three hours at JFK That's not conducive to increasing the number of people who kind of come visit us Can I ask you Glenn do you spend any time talking to folks in Washington about that particular issue I spoke with secretary Duffy about that as did many others. We've talked to people at Homeland Security about this We've talked to people State Department State Department controls immigration all these issues. It's throughout everybody gets it The administration understands this they're putting money in the new bill is going to help improve the situation and it's really important We have two really big tourist things coming. We got World Cup coming to the US We got the Olympics come in the u.s We want to make sure that people are able to come here be able to visit and have a great time Spend their money here. It'd be great We obviously want to get a big piece of this and so we have we have an incentive to help improve it And I would imagine just I mean you can maybe explain the math But for every dollar spent on an additional TSA agent for example that lets folks get through that line quicker That there's a there's a force multiplier in terms of economic impact Oh, no, absolutely true And the fact is so many people say look I'll bet I'll pay an extra $25 on spending thousands to come visit I'll spend 25 I'll spend 50 if I don't have to wait so long But the problem is and speaking with the secretary about is all the people about this part of the issue though It's actually the physical about amount of space you have in these airports You can only put so many booze to get people through to check their passports. So there's a physical issue, too In terms of just looking at the strength of the customer around the world Irrespective of sort of where they're traveling are you seeing any any trends in terms of people going sort of looking at lower-end hotels that might have been looking at higher-end hotels before Downgrading in terms of what's happening in terms of airfares going from you know Economy plus to regular economy or or by the way the opposite which would be even a more pleasant surprise Yeah, you're definitely getting to see it to a two-speed type economy around the world almost but particularly in the u.s Where you see the lower end? Having a little more difficulty So you see more softness in the two-star hotel the three-star hotel You see back of the cabin of the plane a little bit more trouble there Whereas people who are doing well in their terms of their own personal economy They're still spending a lot of money and and for us obviously We want everybody to travel everybody no matter how much money we want them to go but for our business for example We see over 30% of our customers or what we call genius levels two and three Those are frequent travelers and those people are producing old mid 50% of our booking.com accommodation So we're not as impacted as perhaps an airline might be Glenn let's get different question about the business itself and and the defeat to the extent that there's a moat around your business How you think about AI Impacting that and let me just lay out a Situation for you. It seems to me that one of the things you've done so very well is develop relationships contracted relationships Apis and all sorts of other things with all sorts of airlines and hotel companies and and the whole thing so you can actually Soup to nuts Really create an easy on-ramp for the customer and that's been a great thing My question is in an age where you know open AI and its new operator or agent service or Some of the others that are doing similar things whether one day they too will be able to actually make reservations directly with the hotels or directly with You know the airlines effectively going or and not even needing what's called an API Meaning that literally the service the the AI will literally just go to those websites on their own And be able to almost you know reverse engineer what you've created without Needing to have those relationships Yeah, I know I'm smiling at you a little bit because of course we hear this many times and one of the great things is Establishing relationships. So for example you having to mention open AI And of course, we are very proud of been one of the founding partners with them in their operator mode And if you saw the most recent thing the agent mode and I know you saw their introductory video that Sam Altman led off But if you look at that, you'll see it's booking calm That's doing the hotel booking which is just wonderful and look we have relations with Microsoft. We're doing with Amazon and Alexa we're talking with all the people in this area to create this We provide a very specialized very complex very hard to do business They do a very hard business themselves in terms of these large language hub models together We can create something great for the consumer and great for the partners. We're going to continue to work together I've heard this thing that you're gonna get dis Intermediated for the 25 years. I've been here at this company and it's funny I've heard it when Google was coming out. I heard it the hotels will get their own websites You know, you heard it all the time about AI we have great AI that we're doing working together During the time I've been here the 25 years I keep hearing how you're gonna get dis intermediate our stock has gone up from when I first joined our low point $6 a share Currently, we're you know getting closer and closer to 6,000 make the math simple as we if we get to 6,000 That'd be a thousand a thousand times increase over the 25 years Technology has changed tremendously over the 25 years and it will continue to change and we will continue to change with it

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