Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stenovic on Bloomberg Radio. We definitely love
Speaker 1: talking about travel, and we just broke down expedior earnings,
Speaker 1: which just across the Bloomberg. You might have seen this
Speaker 1: week that the Biden administration considering whether to impost some
Speaker 1: domestic travel restrictions, including Florida. Concern about kind of reversing
Speaker 1: some of the progress that we've made as a country
Speaker 1: on the pandemic. Another story about how travelers could get
Speaker 1: COVID vaccine certificates to enable entry to countries under plans
Speaker 1: being discussed by ministers with governor with government governments. Excuse me,
Speaker 1: and the aviation industry want to get to I'm rushing
Speaker 1: because I want to bring him in a go to
Speaker 1: voice for us when it comes to travel. We've talked
Speaker 1: with him many times throughout the pandemic. Axel Heifer is
Speaker 1: back with us. He see out the online travel platform
Speaker 1: in search site Travago, and he joins us on the
Speaker 1: phone from Germany. Excel, it is so great to have
Speaker 1: you back with us. How how are things going? Yeah, wait,
Speaker 1: wait to stop. I mean, as Roger said, I mean,
Speaker 1: the times are still pretty difficult UM for travel obviously,
Speaker 1: but than for for all of us with all the
Speaker 1: restrictions around the world. On the other hand, UM, I
Speaker 1: do think that there is is clear hope and there
Speaker 1: is a clear path to UM to return to a
Speaker 1: more normal life. And the second half of the year
Speaker 1: with some countries being very successful in vaccinating very quickly
Speaker 1: UM and more and more vaccination production capacity coming online.
Speaker 1: So it's it's a mixed um of of a very
Speaker 1: very difficult present and an improving outlook for the future.
Speaker 1: Before we look forward a little bit, tell me, I mean, so,
Speaker 1: is everything pretty quiet still? Is it like it's been
Speaker 1: largely the last year or so? Are you seeing some
Speaker 1: activity a little bit on your platform? I mean the
Speaker 1: travel is travel activity is very limited, UM. So we
Speaker 1: we've we've seen quite a lot of travel in the
Speaker 1: third quarter of last year where the infections came down
Speaker 1: pretty much everywhere in the northernmosphere, and you could clearly
Speaker 1: see that there is a huge demand of UM of
Speaker 1: all of us getting a break and traveling, seeing friends
Speaker 1: and family and and just going to the beach or
Speaker 1: the mountains. But then with the autumn coming, infections have
Speaker 1: obviously come up, and travel has collapsed pretty much UM
Speaker 1: in all of our main markets, so the demand is
Speaker 1: is very quiet. But you know, we are we are
Speaker 1: focusing on on the recovery and improving our product offering. Well.
Speaker 1: It's interesting too, I mentioned Expedia reporting, Disney reporting earnings.
Speaker 1: You know we're watching too in terms of uh, you know,
Speaker 1: indications of when they start to see their parks opening.
Speaker 1: How do you see this is a second half story,
Speaker 1: a third quarter, fourth quarters story, I mean, how do
Speaker 1: you see it? Maybe you know playing out here. It's
Speaker 1: very difficult to predict, but we are we are very
Speaker 1: confident that by the third quarter most of the main
Speaker 1: markets will have made a lot of progress UM and
Speaker 1: and in the vaccination program, so that there will be
Speaker 1: returned to to travel will in summer, and the question
Speaker 1: when the summer will start will will obviously be answered
Speaker 1: slightly differently market by market. If you look at countries
Speaker 1: like Israel, UM, I mean, they will be fully vaccinated
Speaker 1: much much earlier than than some countries in continentally Europe
Speaker 1: and UM, the UK and the US being somewhere in
Speaker 1: the middle. So as soon as there are sufficient progress
Speaker 1: and through the better weather, the new infections world dropped,
Speaker 1: there will be some return to travel well. And what's
Speaker 1: interesting too, and I think you and I actually have
Speaker 1: talked about it before. You know, this whole idea of
Speaker 1: health passport or some kind of COVID you know, vaccine
Speaker 1: certificates to allow you to go you know, across border.
Speaker 1: Are we gonna do we need that in order for
Speaker 1: this to work and for the travel industry to really
Speaker 1: open up. It's a good question, and I think it's
Speaker 1: a It's the question is to me more political question,
Speaker 1: how this would be implemented. I mean, if you if
Speaker 1: you would only allow UM for vaccinated people to travel,
Speaker 1: I think at that is UM could create quite some
Speaker 1: some issues because there is a certain certain sequence of
Speaker 1: handing vaccinations out UM, so so there is a clear
Speaker 1: preference to a certain age groups in particular. Whereas if
Speaker 1: you use the vaccination passports to make it easier to
Speaker 1: travel so to UM, to lift the requirements of a
Speaker 1: quarantine or of UM of multiple tests UM, I think
Speaker 1: that that is a different matter, and it would for
Speaker 1: sure help to make it easier. But the key thing
Speaker 1: that is holding travel back is more the predictability. So
Speaker 1: will I be able to go somewhere. What kind of
Speaker 1: experience will I have and will I be able to
Speaker 1: return without an unexpected position of a new quarantine restrictions
Speaker 1: or travel restrictions do you anticipate to And I think
Speaker 1: we've talked about this too, that the type of travel
Speaker 1: that maybe we continue to see, at least for at
Speaker 1: least the first half of the year and maybe even
Speaker 1: into the second half of the year is much more
Speaker 1: you know, country within a country, you know, and it's
Speaker 1: a lot more of local travel. Do we can tea
Speaker 1: to see that kind of thing versus cross border? Yeah,
Speaker 1: I would expect the same pattern that we've seen in
Speaker 1: twenty twenty. So first friends and family UM, and predominantly
Speaker 1: domestic or neighboring internationals, so for the US, Mexico, and
Speaker 1: then UM continentally, for example, for Germany was a lot
Speaker 1: of Netherlands and Austria UM, and then UM with more
Speaker 1: progress also some international travel, and international travel obviously requires
Speaker 1: a lot more improvement, as you need an improved situation
Speaker 1: in the country of origin and the country of destination
Speaker 1: to then UM installed travel corridors. But domestic will will
Speaker 1: be the first for shure to recover. You sound exhausted
Speaker 1: I don't know. I mean I I it has been.
Speaker 1: It has been pretty much exactly a year. Actually we reported,
Speaker 1: we reported this week and I looked it up. So
Speaker 1: the the first earnings that we report a queue for
Speaker 1: twenty ninety in actually February eleventh, we we had this
Speaker 1: one sentence in the share all the latter that said,
Speaker 1: there is the new virus spreading in Asia, and we
Speaker 1: don't think that we can make give any guidance because
Speaker 1: there is some uncertainty. Um. And of course it turned
Speaker 1: out very, very different than what we anticipated. But I
Speaker 1: think now that we are one, we we are closer
Speaker 1: to the end of the pandemic than than to the beginning.
Speaker 1: And and that's the way to think about it. Yeah,
Speaker 1: so today I have an optimism, be an optimist, and
Speaker 1: and focus on on the recovery rather than looking at
Speaker 1: the difficult times that we are still in right now.
Speaker 1: Right because I know all the times that we've talked
Speaker 1: to you over the past year, I mean, this whole
Speaker 1: idea we talked about. You know that we don't have
Speaker 1: a playbook. We're kind of finding our way through it.
Speaker 1: And I do feel like vaccines are certainly a game changer.
Speaker 1: I talked earlier on our broadcast about how let me
Speaker 1: just find the stats so that I can do it right.
Speaker 1: But Dr Anthony Fauci, at least here for the US
Speaker 1: as US vaccines supply should increase enough by April all out,
Speaker 1: anyone who wants a shot to begin getting one. That
Speaker 1: to me like, we're getting, you know, goal posts like this,
Speaker 1: signposts like this to give us some idea of a
Speaker 1: visibility going forward. You I'm assuming you're talking to a
Speaker 1: lot of people in the travel industry, you know, you
Speaker 1: talk about the second half? Is everybody kind of talking
Speaker 1: about the second half at this point? I think there
Speaker 1: there's there's a wide consensus that in the second half
Speaker 1: we should see a significant improvement. Um, whether we see
Speaker 1: it a bit earlier. They are obviously the very very
Speaker 1: different assumptions and and the different perspective on the on
Speaker 1: the second quarter is predominantly driven by the uncertainty around
Speaker 1: the new virus variants. So how quickly will they spread?
Speaker 1: What exactly will that mean for um, the increase in
Speaker 1: infections And on the other hand, how quickly, um will
Speaker 1: the vaccination programs be rolled out, and how quickly will
Speaker 1: the mortality rate drop? And depending on on your view
Speaker 1: on those two questions, you're you're more positive or more
Speaker 1: skeptical for a bit earlier recovery and earlier start of
Speaker 1: the summer. So how do you continue to run a
Speaker 1: company in this environment? I know you've got to worry
Speaker 1: about employees, UM, tell me where you are with that.
Speaker 1: And and I'm also how do you do kind of
Speaker 1: long term strategic planning in this type of environment or
Speaker 1: do you kind of just have to put it on
Speaker 1: hold until you get through this? I mean on the
Speaker 1: on the business side, UM, it is actually not that
Speaker 1: difficult because the every every data point that we look at,
Speaker 1: every survey that you look at, shows that there is
Speaker 1: an increasing desire to travel. I mean the longer the
Speaker 1: lockdowns and the restrictions last, the more we all want
Speaker 1: to travel and you know, see friends and family and
Speaker 1: and really get out of there and and break out
Speaker 1: of the routine. So there is very strong demand and
Speaker 1: we are not worried at all that there will be
Speaker 1: no no rebound ones. Things are more under control. The
Speaker 1: bigger challenge, UM is is I think I mean not
Speaker 1: specific to travel, is it's a change that we are
Speaker 1: all facing that this has been going on now depending
Speaker 1: on where you live for for a year, and and
Speaker 1: we are all exhausted. I mean, it's just it's difficult
Speaker 1: to live in a in a world where, um, you
Speaker 1: basically spend most of your time at home, where the
Speaker 1: schools are closed in a lot of countries and a
Speaker 1: lot of regions where you need to be a parent
Speaker 1: and employee and a teacher at the same time in
Speaker 1: parallel basically. And that's why I think what what will
Speaker 1: make it make much easier and give us a lot
Speaker 1: of relief will be the reopening of schools wherever they
Speaker 1: are closed, and then also the reopening of some activities
Speaker 1: that that allow you to allow us to break out
Speaker 1: of the routine. And then the step after that is
Speaker 1: travel UM. And I think once we see the first
Speaker 1: steps that that that that allow us to to have
Speaker 1: a bit more normal life, the pressure that we all
Speaker 1: feel will will be um will ease a lot. And
Speaker 1: and that is also the key challenge in running a
Speaker 1: travel business, but running any business, I would say, I mean,
Speaker 1: do you anticipate that in the second half you could
Speaker 1: see your business up two hundred three d as people
Speaker 1: who as you said, I'm with them, I'm tired of it.
Speaker 1: You know, I've been basically living in a bubble for
Speaker 1: the most part, and um, you know, can't kind of
Speaker 1: wait to be able to just kind of break out
Speaker 1: a little bit. Do you anticipate that we could see
Speaker 1: some kind of off the charts kind of increases when
Speaker 1: it comes to travel. There there there will be definitely
Speaker 1: be a rebound. I mean how much exactly is almost
Speaker 1: impossible to predict, to be honest, because you will still
Speaker 1: have certain parts of the population that we'll see friends
Speaker 1: and family but will be reluctant to really travel, will
Speaker 1: not feel feel fully safe and and in a way, UM,
Speaker 1: I don't think it really matters. I mean we we
Speaker 1: can't cannot force it anyway, and all we can do
Speaker 1: is to prepare as good as we can and offer
Speaker 1: services and and support for those that do want to travel.
Speaker 1: And if if the the certain segments will will travel
Speaker 1: the year after so so so so so let's be
Speaker 1: I mean that that that that's okay. Um, And we
Speaker 1: we've also been a bit bit spoiled, I mean, being
Speaker 1: being a travel tech company. I mean we've only seen
Speaker 1: growth and it's not it's quite normal for a business
Speaker 1: to also have one or two bad years right, there
Speaker 1: are cycles. Yeah, that's exactly. But but there are a
Speaker 1: business cycles. Then as long as we are getting out
Speaker 1: of it, whether we're getting out of it a bit
Speaker 1: bit bit more quickly or a bit more slowly, I
Speaker 1: don't think that's that's really a big concern. Hey, well,
Speaker 1: last question. You did report earning some members of the
Speaker 1: Wall Street Alice community raising their price targets on you
Speaker 1: guys financially, do you feel like you can get through
Speaker 1: easily or you can at least get through another couple
Speaker 1: of rough quarters if you need to. Yeah, absolutely, I
Speaker 1: mean there there we were, and we were in a
Speaker 1: very fortunate position that we had a very conservative balance
Speaker 1: sheet when we entered the crisis with a quite healthy
Speaker 1: cash position and and UM and looking at the year
Speaker 1: of twenty we basically kept our our cash position but
Speaker 1: i UM by reducing our working capital and that that
Speaker 1: has funded our operating losses, so we we didn't have
Speaker 1: to raise any capital m and still have the same
Speaker 1: same cash balance, pretty much the same cash balance. So
Speaker 1: so from that perspective, we were not really worried at
Speaker 1: all UM and that it should be well sufficient for
Speaker 1: UM for the month and perhaps even quarters to come well,
Speaker 1: looking forward in the quarters to come talking to you
Speaker 1: with a much more I'm glad to hear your optimism,
Speaker 1: but I'm hoping the environment is is a lot more
Speaker 1: optimistic as well. Axel, thank you so much. Exel he
Speaker 1: for CEO of at Travago on the phone in Germany.