We are doing the ET Global Business Summit virtually for the first time. That means no airline travel and no hotel bookings and no dining out. All of this severely hits your businesses. How have you navigated through this situation?
It’s a very difficult time for everybody in the entire world. Nobody has been able to escape the problems of this pandemic and I and my family we all came down with the virus. But, fortunately, we recovered very quickly. And I know so many people personally who have had such terrible times with this illness. At the same time of dealing with the fear of your own personal health and your family’s health, also dealing with the lives and the health of 27,000 employees of the Booking Holdings organisation — it’s very difficult. But you have to react and have to take the necessary steps to try to make sure that you do everything possible to preserve what we had created over 20 years, which is the greatest travel company in the world.
How are you keeping your folks motivated?
We have taken every single step we can to try and preserve as much employment as possible. Of course, the travel industry has been hit more than any industry around the world I think. We did have to restructure the organisation and unfortunately about 25% of our employees will have to go on to other things. It’s so sad but the thing that touched me so much was the morale of the people. Everybody recognises this is what we have to do to preserve and have a company going forward. But I know there is a future for all of us. This pandemic will end at some point. Economies will come back. Jobs will be there. And we will get through this.
Can you tell us about the changes in consumer behaviour that you expect due to the pandemic?
We are seeing changes happen already and it’s about behaviours changing. The first thing that we have noticed is right away people don’t want to go anywhere. But when restrictions started lifting, people said, okay I can go somewhere. And then you start saying is it safe to go to a hotel or is it safe to stay in a small, single dwelling like a home. So many people said I don’t want to go to a place with a big lobby. I’m going to go to an alternative accommodation which is a home … and a tremendous number of people chose that. In our second quarter, we had over 40% of our new bookings for people who wanted alternative accommodation, which is maybe twice of where it was earlier. So, when people think of travelling, they are going to think of not only hotels but can say I had a good time in that private accommodation; so that will be part of that consideration set. What that means is supply will increase tremendously in the alternative accommodation space.
In terms of recovery, where does India stand?
There is a correlation between how bad are the infection rates, how bad are the government restrictions on travel. That correlates with how much travel we are going to get. I can tell you without looking at news items, how many restrictions are in place, and how the virus is because I will look at how our bookings are doing. And India unfortunately has been having a hard time. Compared to some other places, it is still bad. The US where I live is bad. Even Western Europe, things were good in the summer in terms of low infections, but that is going back up and that will correlate with travel. We need a vaccine. Then we will all be able to get back to normal.
What are you seeing in terms of a revival?
The recovery to go back to the 2019 levels of travel and hospitality, we are not going to get there in three years. This is going to take years. It is going to take a long time. It is all dependent on when we get vaccines, when we get distribution of the vaccines. That will determine everything. But, governments can help accelerate the recovery. When things are safer, when there is a vaccine, all the governments around the world, can if they want to, and they should, help to bring back the tourism and hospitality business. Some governments are doing alright. Japan is relatively safe with low infection rates, and the Japanese government has put together a programme that is helping to bring back tourism and travel. We are participating in this. Thailand has very low infection rates. We are working with them. I urge every government to put specific programmes in place so that when it’s safe to travel, that money can be put to work and we can revive the travel industry faster.
What do you think of Airbnb planning to go public at a time like this?
I think it’s great for them. If you want to go public, go public. But…no consumer cares. It’s purely a financial transaction that will help some people who have been holding that stock for a very long time and not been able to sell. It may bring more capital into Airbnb but it’s not like they are hurting for capital right now. They raised a lot of money during the crisis and they are well positioned. I don’t think it’s going to make much of a difference at all.