Booking.com CEO: Jet Fuel Cost is Hitting Holiday Demand

Higher jet fuel costs are weighing on travel demand as more expensive flights put pressure on holiday budgets, says Booking.com chief executive Glenn Fogel. Speaking to Will Bain on The Big Boss Interview, he describes some softening in travel, including in Europe and Asia, and says rising costs can leave people questioning whether they can afford a trip when their wages are not keeping pace.

Fogel says the company’s third quarter results exceeded its guidance, but its outlook for the fourth quarter was less positive. He identifies the cost of oil, and its effect on jet fuel and airline tickets, as one factor that could be affecting demand. He says these are costs the business cannot control, with its response focused on improving its services and attracting a larger share of travel bookings.

Domestic travel performed better than international travel during the third quarter, according to Fogel. He says travel within people’s own countries grew at a high single-digit percentage rate, compared with low or mid-single-digit growth for international trips. Despite the shorter-term uncertainty, he expects global travel to grow faster than GDP over a 20-year period, with stronger and weaker quarters along the way.

Asked what governments should do to support the sector, Fogel favours improving infrastructure over financial assistance intended to respond to short-term market conditions. He says additional airport capacity could help tourism and business travel, with greater supply potentially lowering prices.

He also discusses visitor levies and the practical difficulties of collecting taxes that vary between destinations. Fogel recognises that local authorities need money to maintain the places tourists visit, but would prefer greater consistency in how charges operate. He says he does not have data demonstrating their effect on travel choices and suggests that factors

Presenter: Will Bain

Producer: Angus Tiffin/ Olie D'Albertanson

Editor: Henry Jones