WEBVTT - Holiday Travel Outlook

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovic on Bloomberg Radio. Just over two

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<v Speaker 1>and a half million passengers passing through US airport checkpoints

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<v Speaker 1>yesterday Sunday, according to t s A data. That's the

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<v Speaker 1>most in a single day since before the COVID nineteen pandemic,

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<v Speaker 1>and up about four and a half percent from the

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<v Speaker 1>same day last year. Again, according to the t s A,

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<v Speaker 1>still the one day tally fell about eleven shy had

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<v Speaker 1>the same figure back in when two point eight eight

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<v Speaker 1>million travelers were screened. But bottom line, like there's a

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<v Speaker 1>lot going on. People are traveling absolutely still seems like

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<v Speaker 1>a lot of pent up demand. You know, people who

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<v Speaker 1>canceled vacations and visits to their family during the pandemic

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<v Speaker 1>really trying to still get them in now. So uh,

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<v Speaker 1>I don't know, it's uh good time to travel, I guess.

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<v Speaker 1>All right, Well, let's see what our next guest has

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<v Speaker 1>to say about that Price Line CEO Brick Keller joining

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<v Speaker 1>us to be a zoom from Norwalk, Connecticut. Price Line,

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<v Speaker 1>of course, a subsidiary of the publicly held booking holdings

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<v Speaker 1>Brett Good to have you here Bloomberg Business Week. Tell

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<v Speaker 1>us about the activity that you guys are seeing. Have

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<v Speaker 1>you been traveling a lot lately? Yes, I have. Actually,

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<v Speaker 1>I just got back late last night from a trip

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<v Speaker 1>out west. The plane was completely packed, you know, a

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<v Speaker 1>little bit of a delay coming into New York, but overall,

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<v Speaker 1>you know, the Thanksgiving period of travel across the country

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<v Speaker 1>was very smooth, you know, Brett, Obviously, inflation has been

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<v Speaker 1>the hot topic all year. I'm wondering what you're seeing

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<v Speaker 1>as far as prices in the travel, hotel, airfare, that

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<v Speaker 1>sort of thing. Are they rising as much as you

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<v Speaker 1>know cp I would suggest something like seven Actually a

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<v Speaker 1>little hotter than that. Um depends on, you know, whether

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<v Speaker 1>you're booking a flight or book in a hotel, but

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<v Speaker 1>they're both up. On the hotel side, you know, prices

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<v Speaker 1>up seven eight percent versus where they were a year

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<v Speaker 1>ago today, so a little less in the CPI, But

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<v Speaker 1>when you look at flies and they're closer to fifteen,

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<v Speaker 1>especially if you're flying overseas. So with the cost of

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<v Speaker 1>jet fuel, you know, really up fifty percent where it

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<v Speaker 1>was a year ago. That's pushing prices higher along labor

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<v Speaker 1>costs and consumers seem to be shaking off those higher prices.

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<v Speaker 1>They continue to prioritize travel over other purchases and are

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<v Speaker 1>really hitting the roads. So here at Priceline, you know,

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<v Speaker 1>we're really seeing good, healthy travel demand. October actually accelerated

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<v Speaker 1>from where it was in August and September. As we

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<v Speaker 1>look into next year, patterns seem to be holding up

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<v Speaker 1>at least so far. So are we back at levels

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<v Speaker 1>based on what you're seeing off your platform, Brett, Yeah,

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<v Speaker 1>we're very close. On the hotel front. If you just

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<v Speaker 1>look at industry data broadly, for for the hotel category,

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<v Speaker 1>you know, their occupancy rates are just about where they

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<v Speaker 1>were in two thousand nineteen, maybe a percentage point below,

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<v Speaker 1>but very healthy on the flight side, even higher in

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<v Speaker 1>the nineties in terms of you know, seat capacity utilization.

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<v Speaker 1>So things look pretty good in the industry right now.

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<v Speaker 1>And you know, consumers no longer have any COVID concerns,

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<v Speaker 1>especially here in domestic travel in the US, and we're

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<v Speaker 1>seeing a really strong demand into Europe and now starting

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<v Speaker 1>into Asia as they've lifted restrictions there. Let me just

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<v Speaker 1>just to follow on that. So I am always curious,

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<v Speaker 1>Brett on a platform like yours, I mean, how much

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<v Speaker 1>visibility do you have looking out Is it a couple

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<v Speaker 1>of months, is it's six months, is it twelve months?

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<v Speaker 1>What kind of visibility do you have in terms of

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<v Speaker 1>what the environment might be for travel heading into sure, well,

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<v Speaker 1>the average booking window for a consumer booking you know,

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<v Speaker 1>out into the future is usually pretty close in two

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<v Speaker 1>three to four weeks. That's really where most of the

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<v Speaker 1>bookings happen. But we do see, you know, well into

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<v Speaker 1>the future people will book out to three and four

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<v Speaker 1>months for certain types of vacations, and so that's a

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<v Speaker 1>good proxy for what we're seeing. And so far that

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<v Speaker 1>data looks pretty good. Things are still relatively healthy as

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<v Speaker 1>we look into the future into first quarter of next year,

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<v Speaker 1>so you know, demand again appears to be holding up

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<v Speaker 1>um and we'll we'll see where it goes from there.

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<v Speaker 1>But so far, we're we're happy with how things are

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<v Speaker 1>playing out in the travel space. Yeah, Brett, I think

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<v Speaker 1>probably a lot of listeners hit your site looking for

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<v Speaker 1>a deal of course, you know, or any tips on

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<v Speaker 1>how to save a few bucks in this holiday season,

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<v Speaker 1>considering prices of everything are higher. There any sort of

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<v Speaker 1>tricks of the trade you could share with us. Yeah, absolutely, listen.

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<v Speaker 1>This is why price Line was founded, you know twenty

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<v Speaker 1>five years ago, was to help consumers navigate a very

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<v Speaker 1>complex space and and find savings. So when when you

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<v Speaker 1>think about ways to save money today and this really

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<v Speaker 1>high price environment, one is you really need to avoid

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<v Speaker 1>these high peak travel dates if your schedule allows, and

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<v Speaker 1>more and more consumers are able to do that now.

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<v Speaker 1>So for example, with the upcoming holidays, try your best

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<v Speaker 1>not to fly on the twenty three and right right

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<v Speaker 1>before and right after a Christmas holiday or the day

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<v Speaker 1>after New Year's Day. Really try and push that out

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<v Speaker 1>a couple of days. You can save fifteen because they

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<v Speaker 1>really optimally price for those dates at From the airline side,

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<v Speaker 1>a second way is on a site like price Line,

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<v Speaker 1>you can book with mixed carriers. You can fly out

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<v Speaker 1>on one airline fly back on another that can typically

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<v Speaker 1>deliver you anywhere from five decent percent off of what

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<v Speaker 1>you would pay if you flew out and back on

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<v Speaker 1>the same carrier. So by mixing and matching carriers you

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<v Speaker 1>can save money. And a third is to package right

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<v Speaker 1>and bundle your your your bookings together. So if you're

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<v Speaker 1>going to book a hotel and a flight, bundle those together,

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<v Speaker 1>you will save money because we have access to especially

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<v Speaker 1>negotiated rays that can only be used in that bundled experience,

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<v Speaker 1>and that does deliver real value up to you know,

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<v Speaker 1>a couple of hundred dollars a trip when you really

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<v Speaker 1>are thoughtful about destinations and how you book those together.

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<v Speaker 1>You guys do have lots of data you can see

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<v Speaker 1>in real time, like what's interesting to people, what are

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<v Speaker 1>the most popular flights that people are booking right now? Well, uh,

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<v Speaker 1>you know, coming out of consumers really stay close to

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<v Speaker 1>home and many of them were not really even leaving

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<v Speaker 1>the country. Uh. And so we've seen big markets really

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<v Speaker 1>start to open up this year, especially for Christmas and

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<v Speaker 1>New Year's So New York, Atlanta, Las Vegas, l A

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<v Speaker 1>all very very top of the charts right now. Also Orlando. Uh.

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<v Speaker 1>That's always been a number one or number two market

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<v Speaker 1>for US in particular, but really for the country, and

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<v Speaker 1>it continues to be a top market for consumers. But

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<v Speaker 1>what we're seeing a lot more the second half is

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<v Speaker 1>people are leaving the US to travel overseas, and when

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<v Speaker 1>you look at where they're going in Europe, obviously London

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<v Speaker 1>is a big market, but they're also heading into many

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<v Speaker 1>other interesting destinations there and a few now moving into Asia.

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<v Speaker 1>But really for the holiday period, warm destinations are at

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<v Speaker 1>the top of the list. Locations like Cancoon, Jamaica, Dominican

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<v Speaker 1>Republic are very very appealing to consumers just looking to

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<v Speaker 1>get a break and get some sunshine. A colleague of

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<v Speaker 1>ours here uh said, yep, we just came back from Jamaica,

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<v Speaker 1>and I have to say our producer Paul Brennan actually

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<v Speaker 1>over in Madrid with his family spending Thanksgiving there, and

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<v Speaker 1>so yeah, people Mike are out and about and they're

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<v Speaker 1>getting out of the US. Take any of those destinations. Yes, yes,

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<v Speaker 1>and yes, hot sand a golf course, swimming pool, one

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<v Speaker 1>of those drinks with the umbrella. But Brett, you know,

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<v Speaker 1>it's such an unusual economic environment that we're in right now.

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<v Speaker 1>We have high inflation but super low unemployment. Everyone's worried

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<v Speaker 1>about a recession. I'm wondering which of those variables matter

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<v Speaker 1>the most to your business. You know, is it unemployment,

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<v Speaker 1>is it g d P? Is it inflation? Is you

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<v Speaker 1>know my guess is unemployment is is probably that the

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<v Speaker 1>main thing that would sort of be a headwind to

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<v Speaker 1>travel is that a fair assumption. Yeah, I think that's

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<v Speaker 1>a fair assumption. I've been in the industry for over

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<v Speaker 1>twenty five years. You know, we went through this back

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<v Speaker 1>in oh eight, and travel is a very resilient category.

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<v Speaker 1>People seem to prioritize that they always want to have

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<v Speaker 1>that opportunity to visit family, to take a break, and so,

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<v Speaker 1>you know, if you're unemployed, obviously that makes it very,

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<v Speaker 1>very challenging to pull together the dollars that's required to

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<v Speaker 1>tip to take a trip like this. But what people

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<v Speaker 1>will typically do if they're constrained is they'll start to

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<v Speaker 1>modify how they travel. They may drive instead of fly,

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<v Speaker 1>they may you know, drop down a star category. Um,

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<v Speaker 1>they'll find ways to save money but still take that trip.

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<v Speaker 1>And we're not necessarily seeing that trade down happen yet,

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<v Speaker 1>but certainly that's what consumers may end up doing if

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<v Speaker 1>they're really pressed for cash. Brett. We spend I feel

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<v Speaker 1>like every day in and out here at Bloomberg, because

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<v Speaker 1>of the upcoming FED meeting, because of the FED conversations,

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<v Speaker 1>because of j Pal speaking this week. We talk about,

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<v Speaker 1>you know, the prospect of a recession, whether it will

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<v Speaker 1>be shallow, whether it will be deep, whether the FED

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<v Speaker 1>will overdo it. What's the conversation's constructive conversations you guys

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<v Speaker 1>are having at priceline Um when it comes to the

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<v Speaker 1>economic outlook and the possibility of a recession. Sure, well,

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<v Speaker 1>that's obviously on everyone's mind here as well as we

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<v Speaker 1>read the news and everything that's going on in the

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<v Speaker 1>in the category. What's interesting though, is so far, the

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<v Speaker 1>hotel chains, the major airlines, they are all signaling good, strong,

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<v Speaker 1>healthy demand for their product. And a lot of that

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<v Speaker 1>obviously is because of consumers not being able to travel

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<v Speaker 1>for really a good year and a half, and so

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<v Speaker 1>that's propelling travel forward. And you know, when you think

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<v Speaker 1>about what consumers are looking to do with whatever extra

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<v Speaker 1>cash they have, they are prioritizing this now over really commodities.

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<v Speaker 1>So you know, as we think about a recession, we're thinking, yeah,

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<v Speaker 1>this could be, this could be obviously harmful to the

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<v Speaker 1>industry longer term, but we just don't see that. And

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<v Speaker 1>historically when you look back to Ohay, it weathered that

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<v Speaker 1>very very well as well. So we're very optimistic about

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<v Speaker 1>the next couple of years, even in the face of

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<v Speaker 1>what could be, you know, a recession. But you know,

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<v Speaker 1>you can't predict the future anymore. It's it's becoming a

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<v Speaker 1>bit a bit too challenging, you know, Brett Quickly, I

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<v Speaker 1>was looking at some of the notes that you sent

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<v Speaker 1>us before the show, Um and Cruises. The price you gave,

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<v Speaker 1>the low price for a cruise ship per night made

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<v Speaker 1>my eyes pop out. Is that a type of seventy

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<v Speaker 1>dollars a night you can you can go on a

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<v Speaker 1>cruise work. No, that's absolutely an accurate figure. In fact,

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<v Speaker 1>you know that's one of and most people don't know this,

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<v Speaker 1>it is one of the most cost effective vacations there

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<v Speaker 1>are because it typically includes obviously food and beverage as well,

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<v Speaker 1>so you bring that together. It's a it's a really

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<v Speaker 1>nice vacation. Now you have to get yourself to a

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<v Speaker 1>cruise port, but there are ways to either drive there

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<v Speaker 1>or find a cheap flight to get you there too,

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<v Speaker 1>then get you onto that cruise line. And now you know,

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<v Speaker 1>the cruise lines obviously had a tough time through COVID

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<v Speaker 1>and continue to have a lot of excess capacity, more

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<v Speaker 1>so than many of the other travel categories. So they're

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<v Speaker 1>really they're really rolling out the credits and other things

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<v Speaker 1>to get you onto those ships. Yeah, I just talked

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<v Speaker 1>with the CEO and CFO of Royal Caribbean for an

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<v Speaker 1>upcoming Bloomberg television broadcasting. They seem pretty optimistic about the outlook.

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<v Speaker 1>They're pretty busy, all right, Brett Keller, thank you so much,

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<v Speaker 1>CEO at price Line, joining us via zoom in Connecticut