WEBVTT - Travel Trends from Priceline CEO

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We don't

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<v Speaker 1>have to tell you if you've been in an airport

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<v Speaker 1>recently about the nightmare that is flying right now, and

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<v Speaker 1>a big part of that has to do with the

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<v Speaker 1>way that demand has really snapped back following a couple

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<v Speaker 1>of years of people sitting on the sidelines. We've got

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<v Speaker 1>a great voice on where people are going, where they're flying,

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<v Speaker 1>what we can see when it comes to inflation and

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<v Speaker 1>the impact that that's having on travel. We have with

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<v Speaker 1>us Brett Keller, the CEO of price Line. It's part

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<v Speaker 1>of the publicly traded booking holdings company. Brett. Great to

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<v Speaker 1>have you with us. How are you. I'm doing well,

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<v Speaker 1>Thank you, Thanks for having me on today. Yeah, it's

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<v Speaker 1>really good to have you with us. Okay, So we

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<v Speaker 1>got a nice little chunk of time with you. So

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<v Speaker 1>we're gonna talk a lot about trends and where people

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<v Speaker 1>are going. But first of all, I want to hear

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<v Speaker 1>about Labor Day because we got the three day weekend

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<v Speaker 1>coming up. What are you seeing on your platform in

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<v Speaker 1>terms of demand for traveling are people getting out there still. Yeah,

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<v Speaker 1>obviously we're coming off of a very strong summer travel

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<v Speaker 1>period and we had record you know, demand coming through

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<v Speaker 1>our platform and through obviously many of the other travel

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<v Speaker 1>platforms in the marketplace. After a pretty much a non

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<v Speaker 1>travel a little bit of demand coming back last year,

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<v Speaker 1>this year was folks were really getting back traveling again.

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<v Speaker 1>So as we're coming out of the summer, you know,

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<v Speaker 1>school starting up again, Labor Day still looks very good

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<v Speaker 1>in terms of consumer demand, very healthy. People are still

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<v Speaker 1>continuing to travel despite you know, really what has been

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<v Speaker 1>a very difficult i think financial period here over the

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<v Speaker 1>last couple of months with gas prices, etcetera. We are

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<v Speaker 1>seeing very healthy patterns for not only Labor Day, but

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<v Speaker 1>really into the fall as well, as people are really

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<v Speaker 1>starting to ramp up their searches and their plans for

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<v Speaker 1>for holiday travel as well. Right, you mentioned gas prices,

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<v Speaker 1>and let's put this conversation in the context of what

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<v Speaker 1>we're seeing in the broader economy right now. Inflation, of course,

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<v Speaker 1>is on everyone's mind, and the big question we've been

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<v Speaker 1>asking over the past several months is when does that

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<v Speaker 1>lead to demand destruction? But it sounds like from what

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<v Speaker 1>you're saying, you haven't really seen that in your data yet.

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<v Speaker 1>We haven't yet. And there's two I think facts we

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<v Speaker 1>can point to here. One is that hotel demand through

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<v Speaker 1>the month of July, you know, public data show that

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<v Speaker 1>that was very healthy, and I think what we're seeing

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<v Speaker 1>in August continues to be healthy. You know, the drive

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<v Speaker 1>market is a big market in the US, and gas

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<v Speaker 1>prices certainly should play a role in that. I think

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<v Speaker 1>with gas prices coming down a bit over the last

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<v Speaker 1>few weeks, that's certainly going to help Labor Day. What

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<v Speaker 1>hasn't really moved down yet is jet fuel prices. Those

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<v Speaker 1>are still up over where they were last year. And

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<v Speaker 1>while flight prices aren't up quite that high, they are

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<v Speaker 1>still up right there, up versus where they were. Because

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<v Speaker 1>because we've seen a decline in the price of oil,

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<v Speaker 1>and as a result, we've seen a decline in the

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<v Speaker 1>price of regular gas that we used to fill up

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<v Speaker 1>our cars. Do we anticipate that we're also going to

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<v Speaker 1>see some sort of decline in the price of jet

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<v Speaker 1>fuel and then in turn airline tickets to Yeah, that's

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<v Speaker 1>stepped down a little bit. You know, if you look

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<v Speaker 1>back four or five weeks ago jet fuel was up

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<v Speaker 1>over ad percent, So it's come down you know, ten

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<v Speaker 1>to fift here in the past few weeks, but it

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<v Speaker 1>does seem to drag and fall behind its speed of return, uh,

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<v Speaker 1>compared to you know, gas prices. The consumer they're paying

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<v Speaker 1>at the pump. So I think we've got a little

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<v Speaker 1>bit of a weight to go there if even if

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<v Speaker 1>pump prices continued to drop in the airspace. And so

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<v Speaker 1>I want to talk about how this compares to what

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<v Speaker 1>we have seen but also pre pandemic levels, sort of

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<v Speaker 1>the demand that you're seeing for flights and hotels, for searches,

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<v Speaker 1>what does it look like. Well, when you look ahead

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<v Speaker 1>at fall travel, U flight searches are significantly on the

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<v Speaker 1>price line platform versus last year. We're seeing flight searches

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<v Speaker 1>over a versus last year for fall travel, and we're

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<v Speaker 1>seeing a hotel switches up not quite that much. But

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<v Speaker 1>now not all of those consumers are ready to pull

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<v Speaker 1>the trigger yet, right they're dealing with sticker shock again

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<v Speaker 1>as they move into fall. But that does indicate a

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<v Speaker 1>very very high demand to travel, a demand for travel,

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<v Speaker 1>and so consumers are very active in the market right now,

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<v Speaker 1>shopping and looking for value that they can pull the

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<v Speaker 1>trigger on. And I think we're going to see a

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<v Speaker 1>very healthy labor day. And you know, we can't predict

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<v Speaker 1>the future. We don't know what's going to happen with

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<v Speaker 1>the economic cycles here, but things are I think shaping

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<v Speaker 1>up in a good place for the fall as well.

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<v Speaker 1>Hey what about rental cars right now? They're offered on

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<v Speaker 1>the price line platform. And I was shocked to find

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<v Speaker 1>that my brother rented a van to carry his three

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<v Speaker 1>kids and his whole family a few weeks ago. They

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<v Speaker 1>did it for ten days and it was like thirty

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<v Speaker 1>five hundred dollars bread just to rent this van. What

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<v Speaker 1>is going on when it comes to rent our cars?

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<v Speaker 1>Rental cars are in a very interesting uh position right now.

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<v Speaker 1>You know, coming out of the start of the pandemic,

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<v Speaker 1>there was a couple of things putting pressure on the

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<v Speaker 1>car industry. First of all, they had had a number

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<v Speaker 1>of storms throughout two thousand nineteen that depleted quite a

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<v Speaker 1>bit of their inventory. And as they entered into the pandemic,

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<v Speaker 1>obviously many of the auto manufacturers had supply chain issues

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<v Speaker 1>and stopped producing cars, and so that put further pressure

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<v Speaker 1>on their fleets. And so as they downsized their fleet significantly.

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<v Speaker 1>That caused prices to go up. It really just skyrocket.

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<v Speaker 1>Last year prices were up almost sev versus two thousand nineteen.

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<v Speaker 1>They've come down a little bit, believe it in hut

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<v Speaker 1>versus last year, but they're still up six. So consumers

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<v Speaker 1>are paying significantly more to rent a car today than

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<v Speaker 1>a couple of years ago. And then you add high

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<v Speaker 1>gas prices on that. That really puts a dent in

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<v Speaker 1>the consumer's wallet. But with that said, they are selling

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<v Speaker 1>out in a lot of markets, so consumers are still

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<v Speaker 1>the higher prices. It's amazing that demand certainly is still there.

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<v Speaker 1>I mean, we really had no other choice. I guess

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<v Speaker 1>you could say, when we're all getting together earlier this year, Hey, Brett,

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<v Speaker 1>stick around because we're gonna do some news and we're

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<v Speaker 1>gonna come back and we're gonna chat more about all

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<v Speaker 1>things happening on the price Line platform and more trends,

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<v Speaker 1>including where everybody is traveling to this fall and what

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<v Speaker 1>are they gonna be the hot destinations next year. Brett

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<v Speaker 1>Keller is CEO of price Line. Joining us on zoom

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<v Speaker 1>from Norwalk, Connecticut. You're listening to Bloomberg Radio. Let's get

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<v Speaker 1>right back to Brett Keller, CEO of Price Line. He

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<v Speaker 1>joins us on zoom from Norwalk, Connecticut. All right, Brett,

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<v Speaker 1>I gotta tell you, Katie needs a vacation. She's got

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<v Speaker 1>plenty of days left. I'm looking at her calendar right here,

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<v Speaker 1>which we can do at Bloomberg, which is fun, and

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<v Speaker 1>she has a lot of vacation days left, Katie that

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<v Speaker 1>you gotta burn by the end of the year. I've

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<v Speaker 1>got some vacation days. I've got to burn by the

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<v Speaker 1>end of the year. Brett. Where are people going? Where

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<v Speaker 1>are the hot places to fly? Right now? Alright? That

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<v Speaker 1>is the question we need to answer through here. We

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<v Speaker 1>need to burn some vacations. So if you know, you

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<v Speaker 1>look at basically any day of the year, the top

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<v Speaker 1>destinations are typically the entertainment venue. So that's going to be,

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<v Speaker 1>you know, topping the charts almost always is going to

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<v Speaker 1>be Las Vegas, Orlando, New York. But as we started

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<v Speaker 1>to look at where consumers are searching as we move

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<v Speaker 1>into the fall, let me share a couple of destinations

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<v Speaker 1>for you. Obviously, Puerto Rico, you know, San Juan tops

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<v Speaker 1>our charts in terms of the most search and a

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<v Speaker 1>domestic destination at least within or close to the borders

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<v Speaker 1>of the US. Honolulu ranks number two in that list. Miami,

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<v Speaker 1>of course, always a hot spot, is where people are

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<v Speaker 1>flocking here in the next couple of months. Where we

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<v Speaker 1>are really seeing though searches pick up at a very

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<v Speaker 1>very high paid it's almost ten times where we were

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<v Speaker 1>last year, are of course, international destinations. Things were not

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<v Speaker 1>completely shut down last year, but really took travel. You

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<v Speaker 1>had to test go through a number of hoops to

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<v Speaker 1>actually get to your destinations. So this year that window

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<v Speaker 1>has opened back up and we're seeing people really both

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<v Speaker 1>travel two and search for international destinations. And the top

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<v Speaker 1>ones on our list at least for the fall so

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<v Speaker 1>far include destinations like Munich, so people are heading to

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<v Speaker 1>October Fest that is back on the map again. People

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<v Speaker 1>are going to destinations like Dublin and London. Other top

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<v Speaker 1>destinations include Amsterdam, Paris, Lisbon. Many of the hot spots

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<v Speaker 1>that used to be big travel destinations for US consumers

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<v Speaker 1>are now back in boge again. Okay, Brett, so I

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<v Speaker 1>actually have vacation days put in for the first week

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<v Speaker 1>of or rather the second week of October. It's our

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<v Speaker 1>five year wedding anniversary. We haven't anything. We haven't booked anything.

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<v Speaker 1>If I'm trying to book international right now, is it

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<v Speaker 1>just is it a disaster? Should I not even try? Well,

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<v Speaker 1>it was a rough summer right The major airports overseas

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<v Speaker 1>really couldn't handle the pressure in the crowds, and so

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<v Speaker 1>you heard stories of lines that were forward five hours

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<v Speaker 1>in length, many people missing flights and rebooking. I think

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<v Speaker 1>we're past that type of pain when it comes to

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<v Speaker 1>international travel. We're certainly not dealing with many of the

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<v Speaker 1>testing protocols and the issues that were associated with covies.

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<v Speaker 1>So I think from that perspective, we're in good shape.

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<v Speaker 1>From the airport and the congestion perspective, it will still

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<v Speaker 1>be very busy because many of the Europeans are now

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<v Speaker 1>of course moving around and across countries as well. But

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<v Speaker 1>things have improved and many of the airports have put

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<v Speaker 1>limits in place in terms of how many flights have

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<v Speaker 1>allowed to move through their airports. So I think you'll

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<v Speaker 1>find that it's tolerable enough that you will want to

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<v Speaker 1>travel to some of these destinations. It's it's it's you know,

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<v Speaker 1>these are the kinds of things that if you keep

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<v Speaker 1>passing up in life, you're just not going to enjoy

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<v Speaker 1>some of the best travel that the world has to offer.

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<v Speaker 1>That's a good point. I always think about Warren Miller

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<v Speaker 1>and the Warren Miller films. If you don't do it

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<v Speaker 1>this year, you're gonna be one year older when you

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<v Speaker 1>do Brett. Before we go, they're always rumors about the

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<v Speaker 1>best time to buy tickets, the cheapest days to buy tickets,

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<v Speaker 1>and the airlines have it pretty pretty figured out in

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<v Speaker 1>terms of from an analytics perspective, you know how to

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<v Speaker 1>get the most money from us. Given that we think

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<v Speaker 1>prices for fuel will go down as a result of

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<v Speaker 1>lower oil prices, should we still be booking our holiday

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<v Speaker 1>travel really earlier? Should we wait for prices to fall. Well, one,

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<v Speaker 1>I'm not sure that I would ever bet on oil

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<v Speaker 1>prices falling. They're just as likely to go back up

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<v Speaker 1>in the future. But when we look back in history,

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<v Speaker 1>and this is true virtually every year, if you're booking

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<v Speaker 1>holiday airfare, those are for the major holidays like Thanksgiving, Christmas,

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<v Speaker 1>end of year, etcetera. You need to book early. You

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<v Speaker 1>need to be booking in this September October time frame.

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<v Speaker 1>If you're talking about other types of fall travel, you

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<v Speaker 1>really need to book at least two weeks in advance

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<v Speaker 1>and do not wait until the last week to book

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<v Speaker 1>your flight. You will absolutely pay up. And it is

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<v Speaker 1>true if you fly out on a Tuesday, you will

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<v Speaker 1>save an average of at least eight percent on your ticket.

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<v Speaker 1>So book in advance. There are certain days a week

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<v Speaker 1>that will play to your favor, and on price Line

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<v Speaker 1>you can do things like mix and match airlines, go

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<v Speaker 1>out on one airline, come back on another. That typically

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<v Speaker 1>can lead to savings of you know, almost ten percent

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<v Speaker 1>if you're careful and how how you plan, so those

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<v Speaker 1>types of changes can take off your trip if you're

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<v Speaker 1>careful and how you plan. But who wants to plan

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<v Speaker 1>a Tuesday. I don't know, that's the question exactly, that's right.

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<v Speaker 1>I guess that's why it is so much cheaper. Bret Keller,

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<v Speaker 1>CEO of price Line, Brett, thanks for taking some time

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<v Speaker 1>and sticking with us for a little extra time this afternoon.

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<v Speaker 1>It was great to get a good chunk of minutes

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<v Speaker 1>with you.