Booking Holdings CEO Glenn Fogel talked about the company’s development in Asia and China market, as well as competition with Airbnb, in an interview with Christine Tan in CNBC’s “Managing Asia” premiered on 14 September.
“Everybody will say that Asia is the greatest growth area for almost all industries,” Mr Fogel said. “There are couple of factors that are driving this growth in travel. As people go from a lower income level to a higher level income, one of the first things they actually want to do is travel. So, we're getting that tailwind. Then on top of that, it's a great region to visit.” Asia grows faster than most of the areas in the world.
When asked if China would be the next growth area for Booking Holdings, given that the company had made significant investment in the market, Fogel said that Booking Holdings would grow its presence in China as well as other fast-growing regions, but he conceded that China could absolutely be the biggest travel market.
“When you look at all the different macro-economic areas, you look at things in terms of the growth of the population, particularly the ages of the population. Age is much more demographically younger than other parts. So as these people age from teenagers into young adults who earn money, they want to travel. We need to be there now to help develop these brand habits.”
In terms of working with China’s top online travel agency Ctrip and consumer platform Meituan Dianping, Fogel said Booking Holdings’ outbound capabilities was a factor leading into such a cooperation.
“We believe that there are really three things that are so important for our business being successful in China and one of them without doubt is outbound business. We need to make sure that we are providing a great service to every single Chinese customer who wants to explore and experience the world.”
Fogel also identified three reasons why Booking Holdings invested 500 million dollars in China’s ride-hailing giant DiDi Chuxing in July this year. The first was that DiDi was by far the biggest player for ground transportation in China. Booking Holdings wanted customers unfamiliar with the Chinese language to be able to go around seamlessly and smoothly with the help of Didi. Secondly, as Booking Holdings was not as well known in China as some local competitors, this could be a good way to impress Chinese consumers. Thirdly, Booking Holdings liked to have a reasonable return on investment.
On the issue of alternative accommodations, Fogel didn't think Airbnb had an advantage over the group. “On our side, you see the incredible breadth of hotel accommodations, and you also see those alternative accommodations on the same page. I can compare and contrast them right there. On Airbnb, you can't do that. You only can look at alternative accommodations. It's a big difference.” Although Airbnb was gradually listing hotels on the platform, the number of its hotel partners was limited, and there's also a service fee charged from other sites like Airbnb, said Mr Fogel.