Booking CEO Glenn Fogel on AI, competition, and the future of travel

Today, I’m talking with Glenn Fogel, the CEO of Booking Holdings, which owns a large portfolio of familiar travel brands, including OpenTable, Kayak, and Priceline, as well as Booking.com, the company’s biggest subsidiary, which is hugely popular in Europe.

This episode is pure Decoder bait all the way through — from Booking’s structure to competition with hotels and airlines increasingly going direct to consumer, even to how European regulation affects competition with Google. Glenn really got into it with me — there’s a lot going on in this space, and it’s interesting because there are so many players and so much competition across so many of the layers.

Booking is a really big company — bigger than you might think. It slowly and steadily absorbed many of its rivals over the years, starting with Priceline’s purchase of Booking.com in the mid-2000s and ramping up with big buys like Kayak for $1.8 billion in 2013. Booking has also expanded beyond flights and hotels into more parts of travel and hospitality with acquisitions like restaurant reservation platform OpenTable. 

But Booking.com itself accounts for 90 percent of the company’s total profits, so I wanted to know how Glenn organizes resources across the company — especially since he’s also the CEO of Booking.com. See? Decoder bait.

We got really into why a company like Booking.com exists in the first place. It doesn’t own any hotels or airlines itself. Anyone who’s part of a hotel or airline reward program here in the US has probably noticed recently that those companies are working really hard right now to cut out the middleman and get you to book directly with them. Some airlines, for example, now only let you earn reward miles for direct booking.

I thought I understood that trend, but Glenn’s view is that it’s actually an outlier. Even the biggest chains in the world, he said — your Marriotts and your Hyatts —  benefit from online travel managers like Booking because the world is so big and complicated. From where he sits, the hotels don’t necessarily want to operate customer service in a hundred languages or take dozens of different payment methods, and that’s the service Booking is offering.

Glenn was also surprisingly open with me about regulation. Booking.com is based in Amsterdam, and Europe’s big new tech law, the Digital Markets Act, classifies it as a gatekeeper just like Apple or Google. Glenn is not thrilled about that, as you might expect, but at the same time, it means competition with Google might be on a more even playing field.

And of course, everyone who comes onto Decoder this year wants to talk about AI, and Glenn is definitely bullish on AI over the long term, especially for customer service. That moment where you call customer service explicitly because you want to talk to a real person? Glenn thinks you might not need that as badly as you think, in part, because the AI won’t care if you swear at it.

There is just a lot going on in this episode — I think we probably could have gone twice as long.

Okay, Booking Holdings CEO Glenn Fogel. Here we go.

This transcript has been lightly edited for length and clarity. 

Glenn Fogel, you’re the CEO and president of Booking Holdings. Welcome to Decoder.

Booking is a big company. It’s a complicated company. It owns a lot of brands that people know, maybe some brands people don’t know. Can you quickly just describe what Booking Holdings is?

It can be confusing, especially depending on where you live. If you live in the US, you may know, I hope you know Booking.com, but you may know Kayak better, or you may know OpenTable, or you may know Priceline. And if you’re in Asia, you may know Agoda. And if you’re in Europe, you definitely know Booking.com — so a number of different brands. A lot of people are surprised by how big Booking.com is versus the other brands. 

Booking.com is probably about 90 percent, approximately, rounding off of the total amount of profits coming out of Booking, and people are surprised. They say, “Wait a minute, you mean OpenTable, Priceline, Kayak, altogether, and then, the other ones are about 10 percent?” And [I]say, “Yeah.” But it is a very big company, so even companies like Priceline, Kayak, and OpenTable are very big companies, too. It’s just that Booking.com is much bigger.

And that’s almost entirely in Europe, you’re saying, Booking.com?

No, we’re very, very global. As I say, I hope a lot of people in the US — I think a lot of people in the US — know about Booking.com, and throughout the world. We operate very global. The only places where we would have trouble filling your travel needs would be places that we’re not allowed to operate because of either US or EU Law.

Booking as a company was formed with a lot of roll-ups, right? You’re describing a lot of brands that started as independent companies, like Priceline, Kayak, and others. How does that work now? You bought them. Are they standalone companies? Are they all part of one company? What’s the structure?

You use the word roll-up; I used to be an investment banker, and a roll-up by definition really means taking a lot of companies and merging them together into one company and reducing costs. That is not the way we did it. I’ve been at the company now since 2000, so I’ve been here a long time; I helped do all the deals. So, when we brought a company in, all of them were very small when we bought them, and one of the key things to get entrepreneurs to come and stay with us was to create an independent management style. So, the people who had started these companies would want to continue to do what they’re doing so well. You had to give them the sense that they still had some stake in how things were going to be done.

Now, over time, there’s certainly been bringing together the best ideas, communicating: “How are things working? What’s working here? Make sure you pass that information to other areas.” And of course, there are some centralized services, too, that you do, but overall, we still like to try and drive down to the lowest level. It’s not just at the brand level, but all the way down, try and give as much authority and ability to make decisions as far down the chain as we can do.

You mentioned the idea that you’re going to help people with all of their travel needs, basically, wherever they are. Is that how you think of the company? Is it a service organization for travel? Are you bigger than that? Do you have ambitions to expand beyond it? There’s a lot happening in travel that I want to talk about, but I’m curious about the big picture.

Travel is an enormous opportunity for us. It’s hard to say how big the total addressable market is. It depends on who you ask. Maybe $3 trillion. Now, last year, we were by far the biggest company in the global space, where our market cap was… You’re running $130 billion; that’s very big. You look for the next biggest, and that’d be Airbnb, and they’re in maybe around below $100 [billion], in the 90s. And then, the next one down, Marriott, $70 [billion]. So, we are very big, but there’s still tremendous opportunity in travel per se. And let’s face it: travel is still not done as well as we all would like it to [be], so there’s great opportunities for us to make it better.

One thing that’s interesting about Booking or any of your subsidiary brands people know: you don’t actually operate the travel experiences, right? You’re not running the hotels. You’re not renting the cars. I’m assuming you don’t run restaurants. I don’t know, everybody secretly has a café they want to run. My dream in life is to run a restaurant, so that’s why I asked it that way. But the travel industry is like a lot of paperwork, fundamentally. Is that how you think about it: you’re automating the process of getting a flight, booking a hotel, getting a restaurant reservation?

It’s interesting how you mentioned it, because it’s true: we do not operate hotels, we don’t operate the actual planes, and as you say, we don’t operate a restaurant. But here’s the thing, and one of the issues, though, is: how can you make it better, given the fact that we’re not going to provide the ultimate service that a person’s actually spending their money for? And really that comes into a bit of, let’s call it, instead of paper, let’s call it information. And this is something I’ve seen and looked upon over many, many years … Really what we’re just trying to do is organize information, being able to provide the information in an easier way for people to make decisions, and then help execute those decisions in a better, faster way.

And that’s really what we’re doing here, and that’s the service we’re providing: making it easier for people to discover, to learn about what they want to do, then to actually make their reservations, then make sure it gets done in the right way, make sure we’re getting great value to them, making sure they’re getting the best prices, and then, God forbid, anything goes wrong — and in travel, sad to say it’s true, sometimes things do go wrong — and then being available to help them, help them quickly. That’s really what we’re providing. We’re an agent to the traveler.

When you say you’re an agent to the traveler, that sounds like you’re saying you’re a travel agent, which is an industry that got wiped away, disintermediated completely by the internet. Is that coming back as people get out of the pandemic — they start spending money on travel again?

No. Well, first of all, a lot of people call us an online travel agent. That’s the word a lot of people use. But the truth is that the human travel agent has been a declining population for a very long time. And I’ll tell you, [with] the things that we’re working on right now in AI and things of that nature, I suspect it’s going to continue to decline as we create the virtual travel agents, we use all the skills we have in AI, all the new things that are coming out, particularly in generative AI, and try and recreate what was, once upon a time, where the only way you could do travel was speaking to a human being.

One reason I ask it that way — and it seems like we’re going to end up talking about AI… I talk about AI in almost every episode of the show lately — is that the promise of a human travel agent or one of the concierge services, maybe a premium credit card we’ll offer, is that they will know the right people at the airlines or the hotel or whatever to solve your problem quickly.

You’ll just call your travel agent, and they will do it for you. A website or an AI chatbot and some other interface, they won’t have those capabilities. They will just have whatever capabilities the underlying APIs will give them. Is that a gap that you have to get through to bring the travel agent experience back?

Well, I think the way you phrase that may not be the way I would look at it. When you say that there’s a concierge who will be able to accomplish something better than someone like us could do, what’s really undergoing here is that if someone, this concierge person, that person has a very high volume and very high value to a supplier, so the supplier may then give that concierge agent more benefits in terms of helping cure problems faster.

There’s no difference here: we’re doing it, too, with our best customers. Don’t forget: an airline or hotel cares a lot more about the volume we provide to them than any single agent is possibly going to get. Again, we did $151 billion of travel last year. $151 billion. That’s a heck of a lot of travel. We have a lot of relationships. So, the issue for us, though, is how do we distinguish, [for] someone who does more business with us, do we give them a higher level of service? Do we separate out and categorize customers? And I think all businesses are always looking to try and take care of their best customers in a better way. That’s just the nature of why you’re trying to attract them and keep them.

That actually brings me to a big question about online booking services, like the ones you operate, across the board. Do you want to own that customer relationship? If you go to the airlines or you go to the restaurants or whoever, they would love to own the customer relationship. Delta does not want me to book with another airline; they certainly don’t want me to book on Delta through you, but they want me in their portal. Is that something that you find tension with? Is that something we’ve already worked through and it’s a solved problem — that you want the customer relationship?

So, here’s the thing: I like the way you ended with customer relationship as opposed to ownership. I don’t believe in owning customers. I think that’s a terrible phrase, and I don’t believe in that. I believe you want to provide a great service that that customer always wants to use you versus a competitor. And whether that competitor is another online travel agent or another portal, like a bank that offers up travel services, or even the supplier directly, you always want to provide a better service so they use you instead of somebody else. And how do you do that? That is, at the basis, giving more value to that customer. Now, one of the benefits we have over anybody else is we get the ability to have a lot more data than any individual. So, as I point out, we do more travel visits than any individual travel supplier does.

In addition, we get to see the traveler across many different verticals. So, while an airline may know a lot of habits about that person in terms of their flight things they like to do, how they like to do their flights, they don’t know a lot about their hotel preferences. They don’t know a lot about their ground preferences. They certainly don’t know about what they like to do when they get to wherever they’re visiting. We have all of those verticals, and that goes into our whole idea of what we call our connective trip. It’s really stitching together all elements of a trip so that we can provide a great service to them. And as people use our services, we learn more about what they really prefer. We’re able to personalize and provide better services to them so they then feel a need, a desire, to come back to us.

Let me just ask you a very simple, maybe dumb, branding question. The site’s called Booking.com. Priceline is obviously famous for “Name Your Own Price” for a flight. When it started, Kayak was a multiple-flight search booking system. Those are all pretty flight-centric. The idea that you’re going to sell a full-service experience — you’re going to know the customer pretty well [and] say, “Here’s a bunch of experiences, buy this trip, push one button.” — are you getting take-up on that? Are people buying into that? Or are you still kind of stuck with what people already think of as the brands?

The first thing is we are by far a hotel accommodation. Hotels or homes — all parts of accommodation by far. Flights are a very small part of the business, comparatively speaking. You’re right: you’re correct that Priceline, 20-something years ago, did start as flight-only, but very quickly, hotels became bigger at Priceline. As I mentioned, Booking.com, our biggest company, has only been doing flights for a few years, so for its 20-something years, it was an accommodation-only business. So, just to let you know, flights is the smaller part of it, a much smaller part.

But we are seeing people are beginning to pick up this idea of doing attractions and doing “what to do there,” and it is something that we are growing. We just started that a couple of years ago, so it’s relatively early, but it’s definitely something that when I am deciding… nobody decides “I’m going to go to a place, I’m just going to stay in the home or the hotel.” You go because you want to do stuff, and one of the great things is that our customer acquisition costs are relatively low since we already have them going somewhere.

This, I think, brings me into the Decoder questions. You’ve mentioned a lot of brands people know and how they’ve changed. Priceline has changed from flights to hotels; Booking started with hotels and is going into flights. You’ve got other ones. How do you structure it so they either are competitive or cooperate? How is the company actually structured right now?

Yeah, no, you always want to make sure that you don’t have cannibalization. You try to make it so that you’re not actually fighting against each other — you’re trying to compete against the outside. So, obviously, we have to set it up so that we come up with certain ground rules: how companies are going to compete; what areas you want to concentrate; asset allocation; capital allocation. How are you going to do it? And we do that with a group management board that I lead, where I bring together the leaders of the individual brands. I happen to also be the CEO of the largest subsidiary, Booking.com. 

So, while I also run the top, the Booking Holdings, I’m also CEO of Booking.com. But it does require some coordination because what you don’t want to do is waste time, energy, effort, money on doing things that are duplicative and things that you don’t think are — that are going to give you incremental benefit.

Are you in more of a divisional structure or more of a functional structure? Are each of your brands independent with overlapping capabilities?

Yeah, they are formally separate companies. They have their own CFOs, their own CEOs. They do operate as separate entities, but we do try to bring them together for coordination. And of course, the Holdings company has a responsibility to enforce certain things that are standard that you have to have, just something as simple as privacy or, say, something like security. These are things that you want to enforce across the entire organization at once.

Do you enforce those competitive overlaps? Do you say to, I don’t know, Kayak that they shouldn’t get too much into Priceline’s lane?

Well, Kayak actually being very different, being a meta [search engine], they actually go across all… A better example would be Priceline, Agoda, and Booking and making sure that we are concentrating on the areas you want to concentrate. What we don’t want to do is have somebody try and take business away from another brand and end up in a case where all we’re doing is giving away money to somebody else because, say, we’re overpaying for marketing, let’s say, in an area.

Do you think of those core functions, like marketing or, more specifically, technology, as things that you share? Because that’s a pretty big cost across any sort of web property or service property like you run. Having duplicative tech stacks is often the biggest cost.

Yeah, the tech stacks are very different, and they’re built up differently. So, just for example, at the very beginning, you had Priceline and Agoda have what’s known as a merchant model, in which case people would pay upfront for their reservations. Booking.com started off in a different way, where they took no money upfront; you paid, for example, at the hotel, and then Booking.com got paid a commission after you left. Very different structures in the way things are built up. Now, of course, we want to try and do things where we can actually get some synergies. We want to do something, so, for example, procurement. Procurement is done across the entire organization, but of course, there can be different needs. So, you want to try and get volume scale benefits, but in the end, there are times you say, look, we’re not going to try and do this one-size-fits-all because they’re different needs, and that comes on a case-by-case basis.

You’ve mentioned you’ve been there for 20 years or so. You’ve watched the company grow this way. You’re not a CEO. What’s the benefit of being structured this way? Because most CEOs come on here, and they say, “We brought things together. We had a bunch of synergies. We’ve stopped paying for multiple engineers building in different tech stacks.” What’s the value of having duplicated functions and divisions like this, as opposed to mashing it all together?

As CEO of Booking.com, as CEO of the group, I always want to be careful and make sure what I’m doing is best for the entire organization, not just good for Booking.com. When we do things that may appear to be duplicative, you want to say, well, what is the cost of standardization? What is the delay? How much are you going to slow things down while you’re putting everything together onto just one platform? Is that really going to give a benefit? On the other hand, though, as I mentioned earlier, about driving things down to the lowest levels of the organization, letting people just run hard with what they are doing, it gives it, I think, a benefit overall.

Look, it’s worked so far, but as you mature and as growth slows, as it always does over time as you get bigger and bigger — it’s just law of large numbers, it’s harder to grow at 50 percent when you’re a much bigger company than it is when you’re a smaller company — then you start looking at that: are there better ways to do it in a way that will save money by standardization across the entire organization? But again, this is on the very nuance that we have to be careful not to slow the company down just for the sake of coming up with everybody doing it the same way.

Obviously, you’re speaking to me from the Netherlands now — Booking is headquartered there. In the American market right now, the margin pressure on every company is out of control, and you do see companies getting smaller and consolidating their teams. Even the biggest tech companies have had rounds and rounds of layoffs, and they’re eliminating things that seem like a lark or maybe just zero-interest rate ideas that they had. Do you feel that pressure in Europe? Do you think the market is different for you?

Again, we really have to think global. Always global. We don’t think about individual markets. Of course, when we’re reporting, we’re talking about which areas there are. We are a global company, operating… I don’t remember the exact number — it’s over 200 countries and areas around the world. So, we’re always looking. Now, we have the benefit of diversification, and since one area may not be doing as well as in other areas, you get a benefit when the other areas are doing better. 

But look, there’s always pressure on whether economies are going fantastic or you’re in a recession. Either way, you’re always under pressure because you have competitors who are trying to come up with better ways to do it. So, you’re always looking at your costs. You’re always trying to make sure you’re doing things in the best way and trying to save money. But you have to always be thinking, am I doing it in the right way? “I’m saving money, so I’m doing something good in the short term, but that’s going to cost us a lot more in the long run.”

I want to talk about that competitive pressure because it feels like in your business, in particular, it comes from a lot of different places, as opposed to just adding up competitors. But let me come back to that in a little bit. How big is Booking now? Have you been growing out of the pandemic? Are you about the same size? Are you holding steady?

No, we are far and above where we were in 2019, before we went into the pandemic. As I mentioned, $151 billion of travel, that is a very large number. It’s very large. In the $130 billion market capitalization, these are enormous numbers for most companies, but it’s compared to the scale of the opportunity because travel is so big. That shows that we have a lot of growth still to have.

How many people is the company now?

Approximately, round off, call it 25,000 employees. 

And how is that allocated? Is that mostly at Booking.com? Is that across the company?

Yeah, more at Booking.com than the other ones, given the nature of the size of the different companies, but there are thousands in every one of them and spread throughout the world.

And do each of those have their own structures, or are all the structures harmonized?

Well, when you say structures, what do you… Help me out. What do you mean when you say structure?

I will once again pick on Priceline and Kayak, which are the ones that I use, but you could pick any of them. Do they have their own product teams? Their own design teams?

Are those structured the same way at each one? Or are they allowed to have different structures?

They’re totally different structures within them. And of course, they are separate companies, so they all have their own design, their own technology, their own CTOs, their own chief product… Every single one is a separate company.

So, that part that you were talking about — about pushing things to the lowest level when it’s necessary — how do you make those decisions? Do you say, “Okay, we see what’s happening at Booking. That’s a good piece of core. Call it AI technology. We want to bring that everywhere”? When does that happen? Is that a meeting? Do you just send an email? Do you fire off a text?

No, there are different meetings. We call them sometimes steer co’s across brand stuff. AI is a good example of this. We’re having different groups have meetings across brands to ensure that all the companies are learning what’s working in one, what’s working in another. A lot of the opportunity right now for a lot of companies is increasing productivity through generative AI stuff. So, we want to make sure, well, what’s working here? What are you using for your copilot in your tech space? Which one are you using? Oh, how’s that working? What kind of numbers are you seeing out of that? Oh, we should try that one, too. Or we should try this one because this is working for us. That’s the type of thing. But in terms of the day-to-day stuff that you really go down deep, deep, deep… You asked the question about how we make decisions.

We are a very data-driven company. Now, most companies say that, and everybody goes by that old saying that “in God, we trust; everybody else, bring data.” But we really live it. And we’ve lived it for a very, very long time. A/B testing was our mantra really. A lot of people weren’t doing that. A lot of people were doing stuff where it was the old style based on the highest-paid person’s opinion — we never believed in that. We always believed “show us the data” because digital commerce is really one of the greatest experimental bench tables you could ever play with. And you can see right away, if I do this, what happens? If I do that, what happens? And we’ve been very fortunate, and that’s really how we came from, really nothing, to be the size that we are — by continuing to look at what is actual real in terms of data versus just what is somebody’s opinion.

That information sharing you’re talking about at most companies is pretty unstructured, but the way Booking is structured, you’ve got these different companies, different teams. It seems like you probably need some sort of structured communication to make sure information is flowing between all these groups. Is that something you’ve organized, or is that something that just happens organically?

Well, a lot of it happens organically, but we, as I mentioned, set up for important things. We’ll set up steer co’s, so we want to make sure that we do have an actual centralized place for information to share, or, as I say, in this group management board, where I am sitting with the leads of my other companies, and we are able to share, set up an agenda on: What do we want to discuss, what are the important elements to do that? And then, at the very top — when we’re putting together our planning for the next coming years — is really getting the input from all the brands, and all that in the very top I can see, and then we can have further adjustments to what is going to be the total plan for everybody.

A “steer co” is a steering committee? That’s my guess. Is that right?

Yes, correct — steering committee. 

And then, how big are those committees? Do you decide, “Okay, we need an AI steering committee,” and you just pick a leader? How big do those committees get?

It depends on the size of which one it is. It can all depend, or just a few to a large one. By the way, it seems larger ones go slower than smaller ones, just by the nature of the number of people who want to contribute. But we will set it up when there’s an issue, an element, or something where it’s cross-brand, and we want to make sure that we’re getting good communications going across.

I’m really interested in this because so many of the companies I talk to are functional companies, where the CEO controls product and marketing, and divisional structures are just more complicated. But it sounds like what you’re saying is you get more speed, you’re doing more testing with the customer. Is there a world in which you see, “Okay, we’ve gotten really big in order to make the big step change with AI or something. I need to do some more top-down leadership”?

I’m weary of ever having anything too centralized. I think you look at a lot of successful organizations that work much better because they’re taking advantage of all the people’s great ideas, all the people’s abilities, and when you have… Look, it’s funny. We hear stories of, say, Apple, under Jobs, and he was really… The story is always of him like the single heroic leader. But I’ll tell you: I had never worked there, and I don’t know what it was like back in the day, but I bet there were a lot of smart people giving a lot of good ideas and helping make sure those great products came out.

They are no longer shy about saying they were there and helped those products come out, I will tell you.

But we’ll use Apple as an example, or we just had Rivian on the show. Rivian is a super functional organization. The entire product operation reports to RJ, the CEO. You’re saying you see some value in spreading things out.

Oh definitely. [ Diversification is a great thing, too. You end up in this mono thinking, where if you’re one person, with one idea, and this is the way it’s going to be, that person is not willing to accept other people and be willing to [say], “Hey, maybe I’m not the smartest person in this particular thing.” And having multiple brands doing multiple different things, I can think of a whole bunch of different things that came out of one of the brands, or another one that was really absolutely fantastic, and of course, the other areas picked it up: “Hey, we’re going to do that too because it’s going to help us all.”

So, this brings me to the other Decoder question, which you already previewed a little bit. How do you make decisions? What’s your framework of making decisions? And, I think importantly here, is your framework different for your role as the CEO of Booking.com versus the CEO of Booking Holdings?

Well, obviously, I defer a lot of stuff to the branch, so those CEOs who are in charge of those companies, and more important for me is making sure I understand why they’re making the decisions, and of course, at the end of the day, they’re responsible for their numbers and hitting what they have said they’re going to produce and what they’re going to create. At Booking.com, I’m the one who’s responsible for that, so I guess I have conversations with myself about that. But the thing is, at the end of the day, and I say, it’s how do we make decisions? We make decisions, as I said, on data, but also, what’s really important to me is listening — really listening. And just because I have the title of CEO doesn’t mean I know everything. In fact, I don’t know most things. My biggest decision is really making sure that I’m hiring the right people, the best people, and even there, I’m using other people to help me make that decision.

Because there’s no one person who knows everything, of course, but actually, most people only know a lot about one single area, and they have to really accept there are other people who have a better understanding of other areas, and you have to depend on them to make those decisions. I’m doing that all the time. Yes, I’ll ask questions, and I’ll listen to the answer and see how confident that person is speaking, that person really knows what they’re saying, and that it makes sense what they’re saying. 

But at the end of the day, you really have to depend on the team. Look at your best sports teams, right? Best sports teams because of the great players. The coach helps lead the team, but the coach doesn’t play. The coach never goes on the court and scores the baskets. Coach never goes in soccer and kicks those shots. Coach isn’t the quarterback throwing the ball. The coach is setting up a structure and hiring great talent and making sure that great talent then goes out and executes to their best.

Do you think about that differently for how you manage Booking.com versus managing the CEOs of the other companies in the holding group? You’re probably competing for talent across the board.

Yeah, but it’s not… that doesn’t come up much at all. It really doesn’t. And yes, really what I want to do more of — and we’ve done some, but I want to do even more — is the cross-fertilization of people, having people move from one of the companies to the other ones. We have not done as much of that as I would like; we’ll do more of that in the future, I think. It’s really giving people new opportunities and different opportunities that would be an important thing, I think, for a lot of people. Plus, I think people also enjoy new challenges and coming up with new things.

Like I said, almost every CEO I talk to runs a functional company. So, I was very excited to talk to somebody in a divisional structure. But let’s talk about the travel industry for a minute here. A lot has changed. You’ve been there almost 20, 25 years—

Twenty-five years almost, yeah.

You’ve been there almost 25 years. I think it’s safe to say that there have been many radical revolutions in travel in that time. There was the pandemic. It went away; it’s come roaring back. You’ve seen things like the rise of these premium credit cards. You’ve seen things like the rise of loyalty programs. And lately, I think you see the rise of influencers in social media, just really making things happen. Like everyone went to Greece this summer, from what I can tell, and that’s just a social media phenomenon. What’s the thing right now that’s driving the most in travel? Is it just pent-up post-covid demand? Is it something else?

See, one of the benefits of having been in the business for almost a quarter of a century directly, and before that I was an investment banker, and my clients were airlines, so I had more time doing that too, so I’ve had a good look at this industry, and here’s the great thing about it, is that in the long run, travel always grows slightly better than GDP. We’re talking global now. Okay? Now, there’s going to be some volatility. And when you have something like a pandemic, or the great recession of 2008, and 2009, and things there, or even earlier, the dot-com implosion recessions, the early part of this century, you always have these issues of, will it come back?

And it always does. And that’s the great thing. So, I know there are going to be some soft times, there are going to be some great times. Like when we came out of the pandemic, there was that revenge travel surge, which is fantastic. But the truth is, I know that that couldn’t possibly last because in the end, we’re going to end up in a long-term run where travel goes slightly better than GDP. Now, on top of that, our job is to get a bigger share of that, and we have benefits of scale and capabilities that enable us to do that.

That scale is really interesting, right? You mentioned earlier you have the ability to negotiate favorable rates or favorable treatments from some of the airlines or hotels that you work with. Those companies want to be direct-to-consumer — the airlines in particular. The hotels maybe not as much; they’re getting theirs—

No. Look, nobody likes to pay for marketing. Nobody wants to pay for distribution. Everybody would like customers to come to them directly and at no cost. That’s what everybody would like. That’s not the way the world works. Marketing is a very important part. Distribution’s a very important part about how you sell stuff, but the desire to sell directly has always been there and always will be there.

So, do you go to those partners and say, “Look, we know you want to go direct, but look, the law of the world is you have to pay for marketing”? Or do you say, “We’re going to bring you more customers and this rate is worth it”?

Oh, absolutely. You got to give added value. No one is going to use your service, no matter what it is, unless the person thinks they’re going to get value. And the value to provide is incremental customers, that they could not have gotten their own way, or they wouldn’t have gotten as cheaply as they got it from us. So, let’s give an example here. Let’s say you are a small hotel in Switzerland: How are you possibly going to get Chinese travelers? What do you do? You’re going to market in Chinese? Do you speak Chinese? We do 44 languages. How are you going to do the customer service? Are you going to have your customer service people do Chinese customer service? I don’t think so. So, there’s so many different things. How about payments? Let’s do that one — it’s a good one, too. Small Swiss hotel, do they take Alipay?

Probably not. They take WeChat Pay? Probably not. We’ll take the money from the customer in China, we’ll put Euros into the bank account of a Swiss hotel. Well, because Switzerland doesn’t use the Euro, we’ll put in Swiss francs for them. But that’s the thing. That’s the thing you have to think about, all the different ways things are done. Look, no hotel goes out and makes its own electricity. Why? Because it’s cheaper to get the electricity from the utility, right? Well, we provide customers that they would not be able to get, or if they could, it would cost a lot more than us providing it for them.

So, the small hotel in Switzerland is a great example. Everyone wants the small hotel in Switzerland to succeed, I assume. I am guessing no one is rooting against the small hotel in Switzerland.

Sure, the big hotels are rooting against the small hotels.

Right, but it’s the big hotels that are kind of the problem, right? The American travelers, probably looking for brands that they recognize—

… they might be looking for the Hiltons or the Marriotts. Or you think they’re all…

What I’m getting at is, basically, are you selling a more boutique experience, or are you selling the cheapest-

No, no, we are providing… We’re doing neither. What we’re doing is providing what the customer wants. If the customer wants a Marriott, wants a Hilton, whatsoever, we have great relations with Hilton, every single international chain. We are a big supplier to them. If the person wants a small boutique, we can provide that. They want a home… A lot of people —Americans, generally — don’t realize how big our home business is. Our home business is approximately two-thirds the size of Airbnbs, and that’s just our home business. Now, what a lot of people also don’t know is that we’ve been growing very rapidly in that area and expanding. The reason they don’t know is because in the US, we’re not as big in the homes area as we are in other parts of the world.

But if you want a home, we can provide you with a home, too. So, really, at the end of the day, it’s “what does the customer want?” That’s what our job is — to provide them what they want, and we’ll provide them the value so they can get it better from us than they could other ways. Because let’s face it, as I say, what we’re doing is an information transaction, and going out and getting information is very, very inexpensive nowadays. Another way to say that is, the customer is just one click away from somebody else.

Right. And usually those clicks are to the Hyatts and the Marriotts of the world because–

Because those companies are big enough to do the marketing. They can probably figure out how to accept WeChat payments. They are inherently international. They can convert the money into Swiss francs and probably do some [foreign exchange market] leveraging and arbitrage — they’re big enough to compete with you on the services that you say you’re providing.

Actually, they’re not. See, that’s the thing.

Even the biggest, and I won’t say who, we’ve had some of the largest chains in the world come and ask us to provide certain types of services for them because we can do it better than that. Think about the technology basis—

Well, no, give me a hint. Maybe you don’t have to say who, but give me a hint.

Here’s the thing: Think about the technology difference. Look, thousands and thousands and thousands and thousands of people are coming up or doing engineering stuff to create a better way to do travel in our companies. Most companies have nowhere near, and the people they do have have to spend a lot of their time making sure that their own just basic bread and butter technology stuff is working fine. So, we can provide these types of services to the suppliers in a way that’s cheaper and better than they could do on their own.

Do you see that tension in the industry that eventually people are becoming a supplier of hotel rooms to your platform, and that might be commodifying them?

Well, of course there’s always the fear. Look, again, nobody ends up wanting to end up beholden to somebody else. Let’s use a different example: how many times do we hear people complain about Google, and they say, “I hate this, I have to spend all that money with Google to get a customer. If only they would come to me directly, I hate being beholden to Google.” That’s no different than anything else. 

Look, everybody wants to be able to make sure that their customers come to them, and they don’t want it to pay for how they’re going to get there. But the nature of competition is such that if somebody doesn’t put money into Google, they’re going to lose out on business. If somebody doesn’t want to work with us, that’s a perfectly reasonable thing. But if I can provide incremental value to them, they will generally want to do business with us.

You previewed the next question perfectly because I was going to ask about Google. The comparison to Google here is right there, right? A bunch of media companies, for example, don’t want to be suppliers to Google; they want a direct relationship, but the search engine is what creates demand. You’ve talked a lot about generating demand, about matching the customer with the small hotel in France — that’s a search product. Is that how you think about the core value? This is a search product and it’s going to curate the results for you?

That’s one element, but there’s so many things. We go all the way the other way: one of the worst things for people on travel is a problem. And if you’re not there to solve that problem… They booked it with you, but you don’t solve for them; they’re never coming back to you. So, one of the great things you provide to a customer is assurance that if something goes wrong, you’ll be there to help fix it for them, and they won’t be out on their own trying to fix it. That’s a real value. No search engine does that. That’s a big difference. 

In fact, one of the reasons people say, and I don’t know, I’ve never gotten this from Google, a lot of people say, “You know what reasons Google does not go further into the actual transaction? They don’t want to deal with that actual messy, messy part of customer service.” Now, that may be true, may not. Certainly, I can understand why somebody… It’s a hard thing to do well, but once you do it well, you have an advantage.

One of the other interesting parts of the comparison to Google is where the results come from. Right now, I think a lot of people are reevaluating the deal Google gets, which is to index all the websites and then show the results, and then AI has made it so that Google might read the results for you. There’s just some recalibration about where Google gets its results on, what it’s allowed to scrape, and in particular, what the AI companies are allowed to scrape. 

You run a search engine. Literally, today as we’re speaking, Booking lost a case against Ryanair, which had accused Booking.com of scraping the website and then overcharging fares. Is that just the way it goes — that you have to be able to go look at everything and you feel like you should be able to look at everything? Or do you need deals with airlines, hotels–

The Ryanair case had nothing to do with scraping. So, if you read the actual case, it had to deal with a 1980s law that dealt with whether or not somebody can access information using a password, and did that create a problem for the user? It dealt with things like hacking, back in the ’80s. What’s interesting in that case, though, while we’re not pleased with the way it came out, I don’t know if you saw the amount of damages: $5,000. Literally $5,000. Really unbelievable. 

Here’s the thing: I like the idea that people should be able to get information as cheaply as possible, but I also understand the issue that people who have ownership of proprietary information they’ve created should not be forced to share it. But if I do put something out to the public, then I have essentially given it out to everyone, that anybody should be able to use it.

It’s an interesting question. This whole generative AI thing is going to be a very interesting case because as we’ve seen some of these cases come around, the training models, the training sets for these models is, well, should somebody have gotten paid for training that information for the model or not? And I don’t know how these court cases are going to come out, but I certainly am as interested as the next person in what these types of cases are going to result in.

As it happens, I know that 1980s law that you’re talking about pretty well — it’s the Computer Fraud and Abuse Act. It’s the law that says you can’t access the computer system without permission, and if you do… It is very messy. The history of the CFAA is not cut and dry, and certainly, it does not always get applied well. 

But the core idea of it is, you need permission to access a computer, even if it’s on the internet. Well, the court just ruled against you, right? Ryanair published its prices, and you got them somehow. Is that something you need to structure or systematize across the board? Are you paying for API access to your various hotel and flight bookings?

You don’t pay for API access, but what’s interesting about your case is you say, “Yes, that was the first… that was the jury’s decision.” Fortunately, we’re not done yet. We’ll be appealing this, so it’s not over until it’s over on that one.

Well, I look forward to that appeal. Again, the CFAA is messy. For the listener, we can fall down a long rabbit hole of the CFAA, which we’ll avoid for now, but I promise it’s messy if you want to look into it. There’s other issues here, especially in the comparison to Google. 

For example, in Europe, the Digital Markets Act was just passed and called Meta, Google, and Apple gatekeepers. It also classified Booking.com as a gatekeeper, too, right? You’re in the same categories as the big players on the internet because you own the demand. In the parlance of my friend Ben Thompson, you’re the aggregator, because you can control and send demand; you have a lot of power in the market. Do you see that kind of regulation as having a meaningful impact on your business?

So, here’s the thing, while we certainly were not pleased with being called a gatekeeper in what is one of the most competitive industries in the world, the idea that we have such, as the regulators alleged, a dominant position. And I’m like, “Well, do you feel that you don’t have another way to travel?” Really? But that’s the way it is, that’s the way it is. Okay. So, we have to follow the rules, and we are following the rules, and we are doing all the things necessary for that. And I don’t see it as being a huge issue for us at this time. But I do see on principle, it’s unfortunately going to something that I’ve said several times. I don’t think this was the optimal solution they were searching for. What’s interesting about regulations, I’m in favor of regulations in general.

Let’s go back to sports. You can’t have a sports game without rules, right? Let’s go to… soccer’s an easy one. There has to be a rule that you can’t pick up the ball. Because if you can pick up the ball and run with it, then it’s not soccer anymore — then it’s something else, right? So, that’s okay. So, the thing I’m… my thing on regulations, though, is I want the rules to be the same for everyone. I don’t like it when certain companies are governed one way, other companies are governed another way; that gives a bias for one versus the other. I don’t really see the need. Now, sometimes people say, well, you have to do that because this company is so large, and actually has a monopoly position. And I say, “Okay, now I understand, that kind of makes sense.” But then we look at ourselves, and we’re not a monopoly. Are you kidding me?

Even more so, which is sometimes regulations really don’t… They’re set up for a reason. That’s a good reason, but it doesn’t work so well in practice. I’ll give you an example that, right now, there’s a shortage of pilots, commercial pilots. A lot retired during the pandemic, and the world needs more pilots. So, in parts of the world, there is a regulation that no matter what, if you’re 65 years old, you can no longer be a commercial pilot. Now, the idea is what? Well, we want to have safety, we want to have aviation safety. And then, you take that, well, we don’t want pilots who are too old to fly, and then they just came up with, well, 65. But here’s the thing: there’s somebody, one day after they’re 65, suddenly they no longer are able to fly, and the day before they were able to fly?

That doesn’t make a lot of sense, when you think about it. There are probably a lot of 65-year-olds who actually can do their job fine and that their health is perfect and fine. And so, maybe the rule should be something that actually talks about capabilities and health and really make it so we want safety first, absolutely, but maybe just having an arbitrary 65, which was put together probably God knows how many decades ago, when maybe 65-year-olds really shouldn’t be fine… It just seems strange to me, and that’s a rule that’s not good. So, what we want is regulations that actually are effective in achieving what their goal is, not coming up with something that is a proxy for it and end up actually making things worse in terms of when you start segregating out different companies in different areas, and we’ll see. Of course, politics plays a big role in a lot of this.

Oh, we’re going to get to policy in a second. But let me flip the DMA conversation on its head for one second. Obviously, the DMA applies to Google. There are companies here in this country that are thrilled about the DMA, that would love something like the DMA to come. Yelp is the company I’m thinking of.

Google being under the DMA and having to open up its search results or at least not being able to favor itself so much — will that help Booking.com or Booking or any of your companies?

We’ll see. It just happened, in terms of the law coming into effect not that long ago, and then the companies have six months after being named a gatekeeper to make certain changes. And then the EU regulators have a chance to examine it. We’ll see. It’s very early to know how these rules are going to play out.

What changes do you think you’re going to have to make?

Well, there are certain requirements, in terms of sharing information. I can go through a whole list of the DMA. But again, what I’m saying is, I don’t think it’s going to change our business hugely. I’ll give you an example of how it changes. So, one of the things that we have in the past, we’ve said to a couple of hotels, for example, we’d say, “Look, here’s the deal, we’d love to do business with you. We’ll translate all your content. We will give you lots of advice on what photos to put in. We will make sure that you can try and get customers from all over the world and provide incremental demand, and we’re not going to ask for any money at all right now. We’ll do all that for you, and we’ll spend a fortune in marketing so you’ll get more customers. The one thing is, though, if you do get a customer, we’d like you to pay a commission. So, there’s no risk, and you’ll get almost all the money yourself, just a little bit of a commission.”

The one other thing, though — what would be really bad for us — is if you price below the price you give to us. What’ll happen is people will use us to figure out which hotel they want, and then they’ll just click over to you and get a cheaper price. And that, in the end, we won’t then get the commission because they booked it with you, et cetera. So, that was called parity. And the DMA says [we] can’t have that parity. And we’re like, “Really? Okay.” Well, in some countries, we didn’t have that. So, now, what’s happening, though, is… Because [in] other countries, we’d already dropped that parity, we saw there wasn’t much of a change actually in the business.

But one of the things we’ll have to do is, we’ll have to continue to give more benefit to our customers so they still have a reason to book with us, and now, of course, we can match the price. If a hotel lowers the price, well, then we can lower the price, too. We’ll do that. Or we’ll provide more services and more things so they continue to use us. And at the end of the day, maybe this is good for society actually, more competition, I don’t know. It’s a rule; we’re following it. And I still believe, though, in the end, the best thing is to provide a better way to do travel, and that’s how you win in the long run.

I got to tell you, I know there’s a long history of arguments about price parity, especially in Europe, where you operate. The way you describe it doesn’t sound bad. You might pay a higher price on your property, but you know that you have to earn that money, and—

And you never know, we may just lower the price ourselves. While they may give us a price and we have X percentage of commission, maybe we take some of the money out of our own pockets, so we make sure that the customer still gets the same price. We’ll figure it out as we go along. But I definitely believe that you have to provide better value. If you don’t, why is anybody going to use you?

Just broadly step back, out of your role as CEO of these companies. You talked about needing rules and making sure the game is fair. That seems like the right outcome — that the companies are under more pressure to deliver more value?

It could work out that way. It could be something that way. I think the way we were doing it, though, was a very good way to do it because the only… This is called, by the way, narrow parity. We’ve only had narrow parity. We weren’t saying that they couldn’t have lower prices with other websites and other competitors, et cetera; we’re just saying that if we’re going to have a partnership with you, the hotels, we’d really like it to be that people don’t use our service and do everything, then just jump over to you, frictionless, to go over and get it cheaper. But okay, look, this is the rule, this is the law. It’ll be this way.

You mentioned politics, and talking about regulation versus politics, but it is election season in the United States. Booking Holdings is a holding company. It’s a company formed from acquisitions. Right now, under the Biden administration, acquisitions are somewhat disfavored; it’s hard to get them through. Although, I will say Microsoft was able to buy Activision, which is a pretty big acquisition that occurred under the Biden administration. But it’s generally harder to get them through.

Are you looking at, “Okay, we got to make more acquisitions. I hope that climate changes”? Because around the world, in Europe, the United States, these big deals are disfavored in favor of more competitors.

Well, I think you’re right that there definitely has been a trend over the last few years in Europe, in the US, and in other parts of the world, that has changed what used to be thought of as something that was a good idea, of allowing mergers and acquisitions to enable better services to the customers, to now be… wait a minute, maybe it’s squashing competition.

Look, it all comes down to the individual cases, and what we don’t want to do is enable monopolies to continue to entrench their monopoly power. On the other hand, what we don’t want to do is destroy what is a very important part of the entire tech ecosystem, which is enabling people to create new businesses, get venture capital money to form these companies, become somewhat successful, but recognize they need an exit. And very, very, very few companies ever become of a type that can become an IPO.

So, the general way people are able to get their investment out is through the sale of that company, and by lowering the ability of big companies to buy these startups, smaller companies, et cetera, and enable this whole cycle of capital being allocated to new ideas, creating new service, new products, then it’d be bought by a larger company, and that money flows back to the venture world, and creates new companies… That whole cycle is being disrupted — can be disrupted — by this idea of, “Well, we’re not going to allow profitable big companies to buy anything.” That’s a bad idea, and I think it’s naive of some people to believe that there’ll be no consequences to this.

Have there been any acquisitions that you haven’t done because you were chilled by the regulations?

Well, go the other way: we were blocked, literally blocked by the EU from buying a relatively small flight travel service — it’s called Etraveli — in Sweden. We wanted to buy it [for] $2 billion, which [is] a relatively small size compared to the size of our capital. And also, what’s interesting is a very competitive market. There’s no shortage of ways to buy an airline ticket in Europe or anywhere, okay? But here’s the thing: they said, “Well, if you buy that, that’s going to increase your ability to sell hotels.” A little true — there’s some benefit to it, of course, and I can’t deny that. And the regulator said, “It’ll increase your share by 1 to 2 percent,” — that was their decision — “and therefore you shouldn’t be able to buy, and you’re not going to be able to buy that.”

Now, my answer to that is that makes very little sense given a lot of our competitors have both flights and hotels, and us buying this flight company would enable us to make a much better flight service with our capital, with our technology, with what we know how to do. We’d make it even better for the consumers, and we provide more competition to the flight business. Well, we’re appealing that one, too, so we’ll see. Come back in a few years — I’ll let you know how it worked out.

You’ve got two CEO roles. How much of your time do you spend on these kinds of issues, the regulatory issues? How has that changed?

Well, it never used to be any time at all, back in the day. Back in the day, this never came up, and now it starts to come up. One’s a factor of us being bigger; one’s part of it because, as you point out, the world has changed a little bit, and it does take time. And it’s thinking these things through and dealing with lawyers and people who are [in the] public affairs field. We never had a public affairs department until relatively recently, and our legal department’s expanded a great deal. Part of the problem, though, is that we prefer to spend that money on hiring engineers and create better services. And unfortunately, when we have to spend a lot more money — not just with hiring lawyers, but hiring outside counsel, et cetera — that’s money that can’t be used to make better products and services for society.

Come on, Glenn, you’re creating jobs. All these public affairs people, they need to eat, too.

They do, they do. But the thing is, though, I’d rather have that money on engineers to make better products.

I’ve heard that argument before. I was joking about the other thing. But I used to be a lawyer; every now and again, I’ve got to offend my people a little bit.

Hey, I have a law degree. I’m a member of the New York State Bar. I have nothing against lawyers. I’m just saying that in terms of, hey, look, at the end of the day, we do need lawyers, and we do need rules, and our society is better off because we actually live by the rule of law. Those societies are better, and I’m in favor of that. I would just like to have smart laws.

Taylor Swift has been on tour. She’s conquered the entire world now. I believe she’s actually the President of the United States in secret — that’s my conspiracy theory. In the United States, the experience of buying Taylor Swift ticket was basically horrible. We did an entire episode on the antitrust law changes in the ’80s that led to Ticketmaster, that led to literally congressional hearings about Taylor Swift and Ticketmaster. 

In Europe, it’s very different. I have friends who have flown to Europe, and it’s cheaper to buy a ticket to a Taylor Swift show and a flight and a hotel than it was in the markets that we have here in the United States. That’s crazy. Do you see that regulatory difference as being better? Because the market for all of those things is more regulated, more constrained, and it seems like everyone’s happier. Everyone’s still making money, and the consumers are happier.

Well, let me say this first: I’m not an expert in Taylor Swift economics, so I understand… There is actually a course at one of the top business schools, I think, that was looking at a case about the Taylor Swift economy. And to your point about flying to Europe, I do know of somebody who flew to Brazil for Taylor Swift, and it did end up being cheaper flying to Brazil, going to the concert there, coming back, than it would’ve been to buy similar seats in New York. Here’s the thing, though: I don’t know that it’s because of any changes in regulations about ticket selling or monopoly. I have no idea how much that… And I can’t speak to that. I can say, though, that certainly we agree no one’s in favor of monopolies — nobody. I’ve never met any economist who would say that it’s better for society to have monopolies.

I say that now. I have to think back. Of course, there are some natural monopoly type things that people think they should… But you know what? We’re on the same page on that. I’m not sure that Europe’s any better at this at all, though. And I certainly can tell you that — I’ll give you a lot of examples in Europe, where, unfortunately, this goes back to politics, where the protection of certain vested interests are much worse in Europe than they are in the US. So, it depends on which industry, which thing you want to talk about. But you and I, we’re on the same page, though, that we want to create an environment, an economic system, that provides the best value to the society, and one of the ways to do that is to make sure there is fair competition.

Let’s end on the AI piece, which, you’ve mentioned several times, is an investment that every company is making. The idea that I have a problem when I travel, and I can just speak in natural language to an assistant that will help me solve that problem, is very powerful. I understand why you would be investing in that. There’s a lot of steps between here and there. So, let me just ask the first foundational question. Do you think the AI systems we have today can actually do the things we want them to do? Because that seems like the most open question of all.

Well, they can do some of the things we want them to do, and they’re doing them right now. I like the fact that when I get on a plane, I feel fairly safe because all of the automated AI-type systems in that plane work pretty darn well, and it flies pretty well. That’s a good thing. But it turns of something you’d rethink would be less complicated, some sort of generative AI customer service–

Specifically that’s what I mean, a customer-facing LLM system — can it do it? Because the proof isn’t there yet for me. 

No, it can do simple things. I’ll give you an example. OpenTable right now is working with an AI company and its restaurant partners, and if you want to make a change to your reservation, if it’s one of these restaurants that is signed up for this, you can do it just like that with a human-like voice talking to you. “I need to add a person to this reservation,” or “I need to cancel this reservation,” and that’s then freeing up the duties and responsibilities of the host if you’d called the restaurant and wanted to tell them to change it. Instead of talking to a human, the machine, the generative AI, is doing it for them.

That’s a good use case that shows it can be done. There’s lots of little ones. But the complicated ones? We’re nowhere near that, which is unfortunate because we do need it badly. I mean, look at what just happened the last couple of days, where things go down, people are upset, and customer service numbers go off the charts. Then you have to try and figure out, “Okay, how are we going to fix this?” and it requires a lot of humans to do it as opposed to the AI. Someday we’ll be there, just not sure when.

That “when” is really important, right? A company like Booking needs to operate massive, scalable customer support phone lines or chatbots. You are the target customer for the OpenAIs and the Googles and the Microsofts of the world. When I talk to them, they imagine you. And all of their investment and their current market caps are predicated on their products being sold to you in a way that works. So, I think it’s important to note you’re not ready to make that investment in their tech yet because you don’t think it works.

Well, no, we are making huge investments because you won’t be able to create these without working on it to make it happen. I’m just saying we’re not there yet. But we are getting some things better… Some of our customer service stuff is already going through, so we’re able to do simpler things with that. And I imagine, boy, the rate of advancement is going so rapidly, maybe it’ll be sooner than I think. We’ll actually be able to achieve some of these things. But it’s very complicated stuff. Being able to… For example, if you have a flight that is delayed, being able to have an AI agent go through all the permutations, what the right things are, and all the other parts of the trip, because a trip is a chain of many different things.

First, you have to get from your home to the airport, then the airplane takes you to the place, then you have to get from the airport to your accommodations, then when you get to the accommodations, maybe you have dinner reservations… Many linked parts. And to imagine that a generative AI, human-like agent will be able to deal with all these things and all its possibilities tomorrow is not real. But in the not-so-distant future? Yeah, I think we’ll get there; it’s just going to take some time.

When you think about that time and then your investment, what’s the horizon on that investment having to pay off?

Well, look, it pays off when you start getting the simple things done, which we’re already doing right away. Because that means that I won’t have to hire as many new customer agents to handle as the volume increases. We won’t have to increase the number of CS agents at the same rate because the simpler cases will be handled by these AI customer agents. And at some point, gradually, gradually, gradually, it’ll get better and better, and we’ll have to need fewer and fewer, and it’ll be something that I think will be better for the customer. Because I don’t know anybody who ever enjoyed waiting on hold to speak to someone to fix the problem.

One of the wonders of doing an AI agent is that there’ll be no hold time — you’ll go right to the machine. That’ll be a great thing. And, by the way, the AI agent is never going to get angry back at the customer. Sometimes customers get really angry, justifiably sometimes, and they may say things that would upset the agent, and the agent may then yell back, if it’s a human. The machine’s never going to yell back, it’s always going to be nice, and it’s never going to come with a bad attitude because it had a fight with its spouse in the morning. It won’t come really tired because it stayed out too late the night before. I tell you, there are a lot of benefits to having an AI agent versus a human. And I hope we get there.

I’m excited for the stories of people trying to jailbreak the AI agents and make them get angry with them. Because people are people — that’s what they do. They encounter these chatbots, and their first instinct is to break them in that way.

Fortunately, people aren’t like that.

But some are. It’s a great effect, and it’s very fun. What AI company are you working with right now? Is it OpenAI? Are you with Google?

We work with everybody. We work with everybody — everyone you’ve probably ever heard of and probably some you may not have. We’re always talking. We may not sign a contract, but we’re always discussing possibilities. Look, again, we meet a lot of advances, but I believe we are still in the very, very early stages of what the possibilities are down the road. And I’ll bet there some of the companies that are going to come, the big winners, haven’t been invented yet.

You’ve obviously thought about this, the macro level. Do you think that the kind of needs that you will have in the future for customer service will support the valuations and investments the big AI companies are putting forward right now? There’s a paper from Goldman that came out that said, “This math doesn’t make any sense at all.” You’re in it, you’re the customer. Do you think there’s enough demand for those valuations?

We are one customer. There are many customers; there are many uses. And I’ll say this: trying to predict the future — some people say it was Yogi Bear, some people actually go back to an old Danish proverb, but it’s very difficult to predict the future and make predictions, especially about the future. And I really say that, many times, people have thought of the limits on the possibilities, and they’ve been proven wrong. And the idea in the 1960s, if somebody told you you’re going to have a thing in your pocket in 50 years that’s going to have more computer power than what we’re using to try and get to the Moon, and you’re going to be able to talk to anybody on the Earth, and you’ll be able to send video, how many people would’ve believed that was possible?

I bet not many. The same way I bet that people in the 1890s could never envision that in 30 years, there’ll be these manned machines in the air flying around. There’s so many things. I think we limit ourselves sometimes to the possibilities. So, in terms of valuation, I’m not going to try and make a guess about whether it is a bubble or not. I do know in the 2000s, there were a lot of people who said the internet is a fad. And it didn’t quite work out that way.

Glenn, you’ve given us so much time. This has been a great conversation. What’s next for Booking? What’s next for travel, do you think?

Well, what’s next is remembering these truisms: people will always want to travel. One of the first things people do when they go from poverty to lower middle class is take a trip. People will always want to see new places. Our job is to make it easier for everybody. How we do that is we use technology. We’ll use this technology. We’ll make it easier. We’ll enable more people to enjoy travel. One of the things we’ll have to really think about is, how do we handle the issue of too much travel? How do we handle the issues of certain parts of the world being the favorite place that everybody wants to go, which suddenly makes that place not such a great place to go? And we’re seeing that even now. We’re seeing that in Venice. We’re seeing that in Amsterdam. We’re seeing that in Barcelona.

The question is, how will we come up with what the fair way is so that we can best decide on how we handle all the different stakeholders in travel? Because it’s not just the suppliers, it’s not just the travelers, and not just people like us, who are helping to arrange it all; it’s the people who live in these neighborhoods. And in sustainability, what about the environment? So, we have a lot of things to think about, as travel continues to increase in popularity, which it will. We’ll have to think about those consequences and, hopefully, think long enough ahead that we can come up with the smart ways to handle it in a fair way.

Amazing. Well, Glenn, thank you so much for being on the show. This was great.

Thank you so much for having me.