WEBVTT - Trivago CEO on the State of Travel 0:00:00.120 --> 0:00:03.680 You're listening to Bloomberg Business Week with Carol Masser and 0:00:03.800 --> 0:00:07.920 Jason Kelly on Bloomberg Radio. Listening to Bloomberg Business Week, 0:00:07.920 --> 0:00:10.360 I'm Carol Masser along with my co host Jason Kelly. 0:00:10.400 --> 0:00:11.800 And Jason I have to say, I feel like we 0:00:11.840 --> 0:00:14.319 have gone through the virus crisis with our next guest 0:00:14.800 --> 0:00:17.759 kind of tracted together. We talked with him in late February, 0:00:17.800 --> 0:00:19.639 then in late March, and now here we are in 0:00:19.760 --> 0:00:23.640 late May. Um with us right now is Axel Heifer, 0:00:23.720 --> 0:00:25.960 and I do wish the backdrop was different. He's the 0:00:25.960 --> 0:00:30.040 CEO of Travago, of course, well entrenched in the travel 0:00:30.080 --> 0:00:32.960 industry and obviously seeing the impact firsthand. He joins us 0:00:32.960 --> 0:00:35.720 on the phone from Germany. Axel, nice to have you 0:00:35.800 --> 0:00:38.040 back with us. I do wish the backdrop was different, 0:00:38.280 --> 0:00:40.920 but I do wonder. Um, first of all, I hope 0:00:40.960 --> 0:00:45.360 you're doing okay. How's everybody doing so far? Everybody healthy? Um, 0:00:45.440 --> 0:00:52.239 So yeah, it's tough, it's tough. Well, we'll talk to 0:00:52.280 --> 0:00:54.160 me because we had, you know, we were with you 0:00:54.280 --> 0:00:56.360 just before. Kind of I feel like everything went into 0:00:56.400 --> 0:00:59.520 a lockdown. We talked to you in late March when 0:01:00.040 --> 0:01:02.480 stuff was just kind of feeling like it was spiraling 0:01:02.480 --> 0:01:05.200 out of control. What's changed since we last talked in 0:01:05.319 --> 0:01:13.440 late March, to be honest, everything pretty much everything. So really, 0:01:13.520 --> 0:01:16.759 right after we spoke last time, there was this big 0:01:16.840 --> 0:01:20.559 cluster in Italy and then within days UM, one market 0:01:20.600 --> 0:01:24.440 after the other disappeared. So traveling pretty much stopped within 0:01:24.520 --> 0:01:28.399 within two to three weeks globally and for us as 0:01:28.400 --> 0:01:30.880 a business, that was obviously a shock and very difficult 0:01:30.920 --> 0:01:34.200 to do within the beginning, but pretty soon actually we 0:01:34.280 --> 0:01:36.959 realized that travel will stop and has to stop. So 0:01:37.000 --> 0:01:40.840 we encouraged our travelers to stop traveling to help to 0:01:40.840 --> 0:01:44.160 to contain the virus and started to think about the future. 0:01:44.240 --> 0:01:48.680 And that's what we've been doing since then. And so 0:01:49.360 --> 0:01:51.760 what does it look like? What does travel look like 0:01:51.960 --> 0:01:55.520 at this moment, because we're starting to see little signs 0:01:55.560 --> 0:01:57.760 of life. I feel like the airlines are communicated a 0:01:57.760 --> 0:02:00.240 little bit more, hotels are communicating a little more, people 0:02:00.280 --> 0:02:03.320 putting plans in place for the comeback. But we don't 0:02:03.400 --> 0:02:07.320 see any real evidence yet. Help us understand what you're 0:02:07.360 --> 0:02:10.960 hearing from your network. So what we do see actually 0:02:11.520 --> 0:02:15.680 on our side is that in certain regions UM there 0:02:15.720 --> 0:02:19.119 are a few people starting to reengage and and think 0:02:19.160 --> 0:02:25.000 about traveling again. And um. The the the most common 0:02:25.000 --> 0:02:27.480 searches that we see and still at a very low level, 0:02:27.560 --> 0:02:32.080 are basically from metropolitan areas into more remote areas, so 0:02:32.440 --> 0:02:35.280 getting out of the crowds um staying in an a 0:02:35.320 --> 0:02:38.480 vacation rental or in the hotel or in a small 0:02:38.520 --> 0:02:42.639 hotel or in an apartment um and and really increase 0:02:42.720 --> 0:02:45.600 the distance to others, but also get out of the 0:02:45.639 --> 0:02:49.800 lockdown situation where many people have been in their home 0:02:49.960 --> 0:02:53.000 for eight, nine and ten weeks um and and some 0:02:53.160 --> 0:02:55.920 even a bit longer um and just want to to 0:02:55.960 --> 0:02:58.120 get out there, get to the nature. And that's what 0:02:58.240 --> 0:03:01.400 you see right now, and in Europe in particular, there's 0:03:01.440 --> 0:03:04.600 more focus on a month from now travel time a 0:03:04.600 --> 0:03:09.120 month from now, so basically securing um sometime outside of 0:03:09.560 --> 0:03:12.640 home for the summer break. So people are starting to 0:03:12.680 --> 0:03:14.880 schedule for like a month from now. Is that that's 0:03:14.919 --> 0:03:17.560 what you're seeing. That that's what we are seeing. They 0:03:17.600 --> 0:03:21.040 are very very short travel time, so really twomorrow and 0:03:21.120 --> 0:03:24.519 the day after where there is very high certainty that 0:03:24.520 --> 0:03:27.639 that you can actually do very short trips to see families, etcetera. 0:03:28.080 --> 0:03:30.880 And then there is is quite a bit of activity 0:03:31.040 --> 0:03:34.520 for a few weeks out really to schedule for the 0:03:34.520 --> 0:03:37.320 summer break. And actually, I know we talked a little 0:03:37.320 --> 0:03:38.920 bit about this the last time you were with us, 0:03:38.960 --> 0:03:42.360 and I'm sure that it is evolved pretty dramatically. So 0:03:42.400 --> 0:03:45.640 how does that change your service? What do you do 0:03:46.000 --> 0:03:50.720 differently in terms of what you tell your customers, sort 0:03:50.720 --> 0:03:53.720 of what you tell the whole ecosystem that you're serving, 0:03:53.760 --> 0:03:58.520 and how So we we made some quick fixes to 0:03:58.560 --> 0:04:03.040 our existing product, and our existing product is basically built 0:04:03.080 --> 0:04:04.880 on you know where you want to go, and then 0:04:04.920 --> 0:04:06.760 we help you to find the best time and the 0:04:06.800 --> 0:04:10.000 best place to place to stay. So there we we 0:04:10.120 --> 0:04:13.240 added a lot more rates that offer free cancelation, which 0:04:13.280 --> 0:04:16.640 is currently very important to travelers. But the bigger change 0:04:16.839 --> 0:04:20.320 is UM is not life yet. So we started pretty 0:04:20.400 --> 0:04:22.599 much eight weeks ago, i'd say nine weeks ago to 0:04:22.680 --> 0:04:25.920 work on on a different product that is basically helping 0:04:25.960 --> 0:04:29.320 you to find UM nice places to stay and also 0:04:29.920 --> 0:04:33.000 nice places to go within driving distance. So it's more 0:04:33.240 --> 0:04:36.560 local traveling product where you can say, I'm in New York, 0:04:37.160 --> 0:04:39.680 but I want to go for a hike over the weekend, 0:04:39.760 --> 0:04:42.080 So what are places where I can go for a 0:04:42.160 --> 0:04:44.479 nice hike and what are the nice stays that go 0:04:44.640 --> 0:04:47.560 with it? And that is from us for us strategically 0:04:47.640 --> 0:04:50.719 obviously a bit more inspirational than our existing product, but 0:04:50.800 --> 0:04:54.359 we do think that it is very very necessary to 0:04:55.040 --> 0:04:58.760 to help travelers to get step by step comfortable with 0:04:59.000 --> 0:05:02.560 safe travel. Again, Yeah, I do wonder that's really interesting. 0:05:02.560 --> 0:05:05.120 And I've noticed that just even online with you know, 0:05:05.240 --> 0:05:08.360 travel sites that I'm involved in, that they've gone from 0:05:08.400 --> 0:05:11.119 you know, they're creating more and more lists about Okay, 0:05:11.160 --> 0:05:14.160 here's you know, the top ten destinations you can drive to, 0:05:14.440 --> 0:05:17.599 or you know, the top ten destinations that are within 0:05:18.080 --> 0:05:20.279 a few hours of you. Um, you're really seeing that? 0:05:20.920 --> 0:05:24.760 Is that accel unnecessary? As you said, the first step 0:05:24.800 --> 0:05:27.320 to kind of getting us back in Okay, well we 0:05:27.400 --> 0:05:32.400 can travel safely? It is, Um, it is absolutely necessary. 0:05:32.400 --> 0:05:34.279 I mean the way we are thinking about it is that. 0:05:34.760 --> 0:05:37.680 And every traveler is obviously slightly different, so so I 0:05:38.000 --> 0:05:42.400 painted a bit black on white, but psychologically we um, 0:05:42.440 --> 0:05:44.839 all of us have been in a situation where we 0:05:44.839 --> 0:05:47.960 were were trained that we should stay away from other people, 0:05:48.040 --> 0:05:50.400 that it is actually dangerous to be close to other people, 0:05:50.440 --> 0:05:53.120 and the situation is getting better in a lot of 0:05:53.120 --> 0:05:56.800 regions around the world, so it will. What is important 0:05:56.920 --> 0:05:59.640 is that you do small steps to get out of 0:05:59.680 --> 0:06:02.640 your foot zone and get comfortable with a bit further 0:06:02.680 --> 0:06:06.400 away from home and a bit further So this, this UM, 0:06:06.520 --> 0:06:09.960 this aspect of traveling somewhere that is closed by something 0:06:10.000 --> 0:06:13.280 that might be very familiar to you, is from our perspective, 0:06:13.400 --> 0:06:17.800 very important psychologically not really to UM to stretch yourself 0:06:17.880 --> 0:06:20.719 too far actcell. What are the conversations that you're having 0:06:20.760 --> 0:06:23.600 with places, even if you're driving to them to say listen, 0:06:24.440 --> 0:06:27.479 you know, you've got to make sure that your facility 0:06:28.240 --> 0:06:31.920 is really safe and secure because if there are any problems, 0:06:31.960 --> 0:06:33.840 you know how social media, things will just go through 0:06:33.839 --> 0:06:36.080 social media very quickly and people say it's not safe 0:06:36.080 --> 0:06:37.599 to go here or it's not safe to go there. 0:06:37.800 --> 0:06:39.960 So I am curious about what are the conversations that 0:06:40.000 --> 0:06:43.200 you're having with you know, some of the places you 0:06:43.240 --> 0:06:45.400 know that I can go to your site and you know, 0:06:45.680 --> 0:06:49.560 sign up to stay at. What are those conversations? So 0:06:49.600 --> 0:06:53.440 the the there, I think the the the the complication 0:06:53.640 --> 0:06:56.440 is is UM. It's not that it is not safe 0:06:56.480 --> 0:06:59.840 to UM to stay in accommodations and hotels or in 0:07:00.080 --> 0:07:04.039 alternative accommodations from the large providers, because everybody is very 0:07:04.080 --> 0:07:07.159 concerned about the safety of the travelers UM, so there's 0:07:07.200 --> 0:07:10.760 a lot of effort put into exact cleaning standards, how 0:07:10.800 --> 0:07:14.840 many people can be where at at which point in time, etcetera. UM. 0:07:14.880 --> 0:07:19.120 From my perspective, the bigger challenges that there are very 0:07:19.200 --> 0:07:24.680 different regulations by country, but sometimes even by state or region, 0:07:25.200 --> 0:07:29.520 so the transparency about what to expect um is very 0:07:29.640 --> 0:07:35.240 very very difficult. So UM for example, in Germany, UM, 0:07:34.840 --> 0:07:38.320 the restrictions are lifted on a federal state level, but 0:07:38.440 --> 0:07:42.600 then in case of rising infections they will be reimposed 0:07:42.600 --> 0:07:45.440 based on the city level. So you can have restaurants 0:07:45.480 --> 0:07:48.720 open in one city and they're closing another city, and 0:07:48.760 --> 0:07:54.840 they are open but at very limited occupancy in another city. 0:07:54.920 --> 0:07:57.000 So it is it is the I think the accommodation 0:07:57.000 --> 0:08:00.840 of the accommodation is safe. Is is is a lower 0:08:01.120 --> 0:08:04.240 um less of an issue, but it's more what is 0:08:04.280 --> 0:08:07.720 my overall experience is it actually even worth going at somewhere? 0:08:08.040 --> 0:08:10.400 That is where where the transparency is missing, And that's 0:08:10.440 --> 0:08:13.160 that's something that we are we are working on and 0:08:13.400 --> 0:08:16.600 trying to help with who are listening to Bloomberg Business 0:08:16.640 --> 0:08:19.520 Week while you just heard some of those travel names 0:08:19.760 --> 0:08:23.240 mentioned and a mixed picture for sure. Let's get back 0:08:23.240 --> 0:08:25.880 to our conversation with Axel heat for CEO of Travago 0:08:25.960 --> 0:08:30.440 Genius on the phone from Germany. Actel help us sort 0:08:30.480 --> 0:08:32.559 of separate, if you will, the signal from the noise. 0:08:32.600 --> 0:08:35.160 Find the signal in the noise here in terms of 0:08:35.600 --> 0:08:37.920 what travel is going to look like in the short term, 0:08:38.000 --> 0:08:40.680 I feel like we're reading and hearing all the time 0:08:40.920 --> 0:08:44.240 sort of these these very dramatic stories about what it's 0:08:44.240 --> 0:08:45.680 going to be like or what it is like to 0:08:45.679 --> 0:08:49.760 get on a plane and whatnot. What do you here 0:08:49.800 --> 0:08:53.800 and and what do you predict in the short and midterm? Yeah, 0:08:53.840 --> 0:08:58.440 the the it's not that simple because it really depends 0:08:58.600 --> 0:09:01.760 on on your different on your state of mind UM 0:09:01.840 --> 0:09:06.480 as a traveler, and that is very different being very young, UM, 0:09:06.920 --> 0:09:12.640 being older UM, feeling more unsafe and uncertain, or feeling 0:09:12.679 --> 0:09:17.120 feeling overall safer. So UM it's difficult to generalize, but 0:09:17.120 --> 0:09:19.360 but I would say if there is a general trend, 0:09:19.720 --> 0:09:22.319 what we see is that there is a lot more 0:09:22.440 --> 0:09:26.680 activity on really um UM as I mentioned earlier on 0:09:26.800 --> 0:09:31.000 destinations where people are traveling from the metropolitan areas into 0:09:31.000 --> 0:09:35.080 the nature close by, within driving distance, UM, a lot 0:09:35.160 --> 0:09:40.200 more regional UM over their national travel and hardly any 0:09:40.240 --> 0:09:44.079 international travel UM. And I think that pattern will hold. 0:09:44.320 --> 0:09:46.200 And obviously that doesn't mean that there will be no 0:09:46.360 --> 0:09:49.040 international travel in a couple of weeks from now and 0:09:49.320 --> 0:09:52.160 in a couple of months from now, but but relatively speaking, 0:09:52.200 --> 0:09:57.000 more people are comfortable with local and UM and and 0:09:57.000 --> 0:10:00.559 and short travels and trips that they can control all themselves, 0:10:00.559 --> 0:10:03.480 and that that just feels safer versus things that are 0:10:03.559 --> 0:10:09.000 further away from home, bigger crowds, further out. And yeah, 0:10:09.120 --> 0:10:13.000 that's that's it was. It was different really person by person, 0:10:13.080 --> 0:10:15.559 but that those are the general trends. So Actel, how 0:10:15.600 --> 0:10:18.680 are you managing? I mean, you've got a global workforce, 0:10:19.040 --> 0:10:20.920 UM are you? Have you been able to hold on 0:10:21.040 --> 0:10:23.680 to everybody? And I'm just curious, you know what the 0:10:23.760 --> 0:10:25.760 future looks like? Will you be able to hold on 0:10:25.920 --> 0:10:29.240 to everyone or will it be contingent on what happens 0:10:29.280 --> 0:10:33.360 as things start to reopen? So we UM, what we've 0:10:33.400 --> 0:10:37.600 done is we we really UM followed a working backwards approach. 0:10:37.679 --> 0:10:40.600 So the we spent really the first couple of weeks 0:10:40.640 --> 0:10:44.160 of the crisis to form of you and hypothsses that 0:10:44.240 --> 0:10:46.920 we're working against. What next year and the years to 0:10:46.960 --> 0:10:49.920 come will look like in terms of travel market, UM, 0:10:50.160 --> 0:10:52.640 which players will be in the market, how much demand 0:10:52.679 --> 0:10:55.480 will be there? And then what does that mean for 0:10:55.559 --> 0:10:57.600 us as a business, how do we need to change 0:10:57.600 --> 0:11:00.440 our products? And then at the last step, what kind 0:11:00.440 --> 0:11:02.520 of organization was set up? Do we need and where 0:11:02.559 --> 0:11:05.280 do we need and how many people? And once we've 0:11:05.320 --> 0:11:08.640 done that, we UM announced the end of last month 0:11:09.040 --> 0:11:13.280 restructuring where we unfortunately had to let go UM quite 0:11:13.280 --> 0:11:16.640 a few of our colleagues. UM and UH. But by 0:11:16.679 --> 0:11:19.479 now have ever set up where we feel very comfortable 0:11:19.520 --> 0:11:21.839 that we can also the challenges that are ahead of us. 0:11:23.600 --> 0:11:26.439 And do you think do you have any sense of 0:11:26.480 --> 0:11:29.520 what's sort of permanent here? I mean in terms of 0:11:29.640 --> 0:11:33.160 changed behavior? Uh, you know, it's hard to say. I know, 0:11:33.400 --> 0:11:36.760 and we know that this is a solvable medical problem. 0:11:37.040 --> 0:11:40.760 We hope and that life will become somewhat more normal, 0:11:40.920 --> 0:11:44.280 But it feels like always in these crises, there's some 0:11:44.400 --> 0:11:47.040 things that you know that do sort of stick with 0:11:47.120 --> 0:11:50.040 us in the long term. Because there will be unfortunately 0:11:50.080 --> 0:11:53.160 another incident of some form or fashion like this. Do 0:11:53.200 --> 0:11:55.599 you have a sense of how how travel will fundamentally 0:11:55.679 --> 0:11:59.480 change so, UM, I mean we can only have an 0:11:59.520 --> 0:12:01.680 ipoth is there. But but I think there are three 0:12:01.720 --> 0:12:04.880 things that that makes sense to me. UM. The first 0:12:04.920 --> 0:12:09.880 one is, UM, the travel will will not be perceived 0:12:09.920 --> 0:12:12.760 automatically as a given and as safe as it has 0:12:12.800 --> 0:12:16.440 been like six or twelve months ago. UM. We have 0:12:16.600 --> 0:12:19.400 been in really in our apartments for an out ten 0:12:19.640 --> 0:12:22.640 last weeks UM, and we have been trained over that 0:12:22.760 --> 0:12:25.560 time that we should stay away from from other people 0:12:25.640 --> 0:12:28.200 and we will continue to do so for quite some time. 0:12:28.200 --> 0:12:31.520 And that will have an effect on how comfortable we 0:12:31.559 --> 0:12:34.959 feel really being close to many other people and in 0:12:35.120 --> 0:12:38.280 massive UM. And of course that will normalize over time. 0:12:38.320 --> 0:12:41.000 But but I I think it will definitely have an effect, 0:12:41.040 --> 0:12:46.439 even beyond the lockdown measures, on our own psychology. UM. 0:12:46.480 --> 0:12:51.240 The second point UM I think is is related to that. UM. 0:12:51.280 --> 0:12:54.680 I mean travel has really been almost the commodity before 0:12:54.720 --> 0:12:57.679 the crisis. You could go anywhere at any point in time, 0:12:58.160 --> 0:13:00.640 and that is not true anymore. UM. So you cannot 0:13:00.640 --> 0:13:03.400 go anywhere, UM, and you cannot go at any point 0:13:03.400 --> 0:13:06.320 in time, and even when you will be able to 0:13:06.360 --> 0:13:09.600 go again, it is less certain what exactly you can expect. 0:13:09.679 --> 0:13:12.679 And I mentioned it earlier, what is really your experience 0:13:12.760 --> 0:13:15.880 when you go now to Florida? You don't know and 0:13:16.200 --> 0:13:18.760 that uncertainty again will take some time to get the 0:13:18.800 --> 0:13:21.320 comfort again that you know exactly what to expect. And 0:13:21.800 --> 0:13:24.640 and last, but not least, there there will be UM 0:13:24.679 --> 0:13:28.000 an impact on business travel UM and we are now 0:13:28.040 --> 0:13:32.280 experiencing it. UM. You can basically run businesses completely remote 0:13:32.480 --> 0:13:37.640 UM and without any traveling. And does it have certain disadvantages? 0:13:37.679 --> 0:13:40.160 Of course it does. Um it is less personal, it 0:13:40.240 --> 0:13:43.800 is more stressful, etcetera. But that that will also have 0:13:44.160 --> 0:13:46.520 an impact on the amount of business travel that will 0:13:46.520 --> 0:13:48.920 be conducted. And don't get me wrong, I don't think 0:13:48.960 --> 0:13:51.600 that business travel will disappear, but I think it's a 0:13:51.600 --> 0:13:54.400 bit different to the last crisis, where the technology was 0:13:54.440 --> 0:13:58.480 not as advanced. I do remember in nine we did 0:13:58.520 --> 0:14:01.520 a lot more phone com princess of video conferences as well, 0:14:01.559 --> 0:14:04.120 but the technology wasn't as good. Yeah. I was always 0:14:04.120 --> 0:14:05.640 going to come back at you with that because everybody 0:14:05.679 --> 0:14:07.320 was talking the same. But I agree with you. The 0:14:07.360 --> 0:14:11.160 technology has shown has gotten a lot better and made 0:14:11.160 --> 0:14:14.319 it much more seamless process Excel Heifer always nice to 0:14:14.400 --> 0:14:16.920 check in with you. Please take care. CEO of Trivago 0:14:17.040 --> 0:14:18.480 on the phone from Germany.