We can replicate the success of short term rental in Europe in the US – Skift

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Booking Holdings is committed to expanding its alternative accommodation offering in the United States, and plans to do so through partnerships with property managers rather than the more laborious task of recruiting individual hosts.

That’s one of the takeaways from an extensive interview Skift conducted Monday with Booking Holdings CEO Glenn Fogel. He spoke about the company’s competition with Airbnb in the United States, equated its “connected travel” strategy with the proliferation of superapps in Asia and defended the company’s strategy of mergers and acquisitions in attractions and hotel services. .

Asked about his recent statement that there is “no reason” that Booking.com cannot have “very good deals” in short-term rentals in the US like it has in Europe, Fogel rejected the idea that the two markets can be different in terms of inventory types or dynamics.

Join us at the Skift Short-Term Rental and Outdoor Summit on May 19

Fogel said the fundamentals of the two markets aren’t too different in that profit-driven hosts want to fill rooms with paying customers. What is indeed a twist is that Booking.com built its inventory of alternative accommodation in Europe before the emergence of Airbnb, but today in the United States, Booking.com has to compete with this player. established.

New Focus

When Booking.com entered the US market several years ago, it focused on its hotel business, but Fogel said he was convinced the company could now use the demand it could generate on its platform. shape to become a bigger player in short-term rental in the United States.

“We are the most profitable and largest player in the industry,” said Fogel, referring to the combined hotel and non-hotel businesses of the company.

On Monday, Fogel did not claim that Booking Holdings was the largest alternative accommodation company. However, in November 2020, the company said it had 6.5 million alternative accommodation listings while in September Airbnb, which was preparing to go public, boasted 5.6 million ‘d’ active announcements ”.

It’s sort of a comparison between apples and oranges. Fogel declined to comment on Airbnb ad numbers, but defended Booking’s 2020 figure of 6.5 million, saying it was based on “truth and facts.” He added that Booking Holdings would not lie in the official documents it files with the US Securities and Exchange Commission.

Property managers and individual guests

Airbnb CEO Brian Chesky said his company was in somewhat different business than its competitors. “Because Airbnb, we mainly focus on individual hosts,” Chesky said in February. “They represent 90% of our 400 million hosts. And OTA [online travel agencies] are mainly geared towards professional guests. “

Booking.com’s strategy certainly fits into this narrative. Fogel told Skift the company intends to focus on growth by working with multi-property managers in the United States, as this strategy is an effective and efficient way to expand its offering.

Asked about recent Airbnb and Vrbo host recruitment campaigns, Fogel would not disclose, for competition reasons, the precision with which Booking would recruit new hosts. He said Booking had its methods, never demanded exclusive listings and that the key was to always offer great value for money.

We asked Fogel what Booking can do in the US to take advantage of the lingering anger of hosts over Airbnb’s refund policy for pro-guest cancellations during the pandemic and frustration over customer service issues.

Fogel wouldn’t comment on the host’s alleged disillusionment with Airbnb. Fogel added that he was proud of the customer service that Booking.com provided to both suppliers and customers during the pandemic, which could benefit the company.

The CEO of Booking Holdings would not comment if Airbnb takes market share from Booking.com in Europe. “We’re still waiting for Airbnb to report first quarter results, so I don’t have any interesting information beyond what you have,” Fogel said. “Sure, they’re a big competitor.”

Airbnb is expected to report its first quarter financial results on Thursday.

Google vacation rentals and other meta-search sites

Google launched its vacation rental product a few years ago, but today three of the major players – Airbnb, Booking, and Expedia / Vrbo – are not providing it with inventory.

Fogel said he speculates that the reason for the absence of large short-term rental platforms in Google Vacation Rentals is that the product does not sufficiently help businesses meet their goals.

Regarding other meta-search or price comparison engines in travel, ranging from Expedia’s Trivago to Booking’s own Kayak, Fogel said he doesn’t see any “thematic” trends in travel agencies. online currently reducing their marketing spend for short term rentals through these sites.

The problem arose because Expedia Group CEO Peter Kern said last week that Vrbo, in addition to removing its inventory from Google Vacation Rentals several months ago, is also cutting vacation rental marketing spend. on several metasearch engines.

Mergers and acquisitions strategy

In 2018, Booking Holdings acquired the tour and activity technology company FareHarbor for around $ 250 million in cash and stock, but in 2020 much of Booking’s attraction sourcing business was handed over to Musement from TUI.

In the same vein, Booking acquired Buuteeq in 2014 and went on to buy PriceMatch a year later to develop its BookingSuite hotel business, which it ultimately closed.

Fogel said that just because Booking can shut down a brand or service doesn’t mean it hasn’t got value, which can come from intellectual property or the onboarding of new employees, acquisitions.

FareHarbor, which specializes in distribution services for tour and activity operators, does “a great job,” Fogel said, adding that it was never designed to work with big attractions such as the London Eye.

In mergers and acquisitions, it can’t all be a “home run,” Fogel said, adding that if a company’s goal is to get a home run with every deal, it is probably not taking enough risk.

No turning back on the connected route

One of Fogel’s flagship initiatives since his appointment as CEO in 2016 has been to invest in a connected travel strategy. In summary, the goal is to provide travelers with a full range of personalized services, from flights and accommodation to ground transportation and tours, at appropriate times during the trip, and to integrate everything into one payment platform. internal.

There are many skeptics as to whether this multi-year effort would be new or revolutionary.

When asked if travelers even want connected travel, Fogel pointed to the popularity of superapps, which allow users to book everything in one lonely app, and the ever-present frustrations of travelers over delayed flights and travel bookings. land transport that do not keep pace later. arrival, for example.

Having more customer data, as expected in Connected Travel, would allow Booking to provide better service to both the traveler and the supplier, he said.

Fogel said building the connected travel isn’t as gigantic a task as inventing a new vaccine, which means it’s doable with time, technology, diligence, and the right marketing.

Register now for the Skift Short-Term Rental and Outdoor Summit on May 19

Photo credit: Glenn Fogel, CEO of Booking Holdings, is optimistic about the development of the company’s short-term rental business in the United States Booking



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