Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. Listening to Bloomberg Business Week,
Speaker 1: I'm Carol Masser along with my co host Jason Kelly.
Speaker 1: And Jason I have to say, I feel like we
Speaker 1: have gone through the virus crisis with our next guest
Speaker 1: kind of tracted together. We talked with him in late February,
Speaker 1: then in late March, and now here we are in
Speaker 1: late May. Um with us right now is Axel Heifer,
Speaker 1: and I do wish the backdrop was different. He's the
Speaker 1: CEO of Travago, of course, well entrenched in the travel
Speaker 1: industry and obviously seeing the impact firsthand. He joins us
Speaker 1: on the phone from Germany. Axel, nice to have you
Speaker 1: back with us. I do wish the backdrop was different,
Speaker 1: but I do wonder. Um, first of all, I hope
Speaker 1: you're doing okay. How's everybody doing so far? Everybody healthy? Um,
Speaker 1: So yeah, it's tough, it's tough. Well, we'll talk to
Speaker 1: me because we had, you know, we were with you
Speaker 1: just before. Kind of I feel like everything went into
Speaker 1: a lockdown. We talked to you in late March when
Speaker 1: stuff was just kind of feeling like it was spiraling
Speaker 1: out of control. What's changed since we last talked in
Speaker 1: late March, to be honest, everything pretty much everything. So really,
Speaker 1: right after we spoke last time, there was this big
Speaker 1: cluster in Italy and then within days UM, one market
Speaker 1: after the other disappeared. So traveling pretty much stopped within
Speaker 1: within two to three weeks globally and for us as
Speaker 1: a business, that was obviously a shock and very difficult
Speaker 1: to do within the beginning, but pretty soon actually we
Speaker 1: realized that travel will stop and has to stop. So
Speaker 1: we encouraged our travelers to stop traveling to help to
Speaker 1: to contain the virus and started to think about the future.
Speaker 1: And that's what we've been doing since then. And so
Speaker 1: what does it look like? What does travel look like
Speaker 1: at this moment, because we're starting to see little signs
Speaker 1: of life. I feel like the airlines are communicated a
Speaker 1: little bit more, hotels are communicating a little more, people
Speaker 1: putting plans in place for the comeback. But we don't
Speaker 1: see any real evidence yet. Help us understand what you're
Speaker 1: hearing from your network. So what we do see actually
Speaker 1: on our side is that in certain regions UM there
Speaker 1: are a few people starting to reengage and and think
Speaker 1: about traveling again. And um. The the the most common
Speaker 1: searches that we see and still at a very low level,
Speaker 1: are basically from metropolitan areas into more remote areas, so
Speaker 1: getting out of the crowds um staying in an a
Speaker 1: vacation rental or in the hotel or in a small
Speaker 1: hotel or in an apartment um and and really increase
Speaker 1: the distance to others, but also get out of the
Speaker 1: lockdown situation where many people have been in their home
Speaker 1: for eight, nine and ten weeks um and and some
Speaker 1: even a bit longer um and just want to to
Speaker 1: get out there, get to the nature. And that's what
Speaker 1: you see right now, and in Europe in particular, there's
Speaker 1: more focus on a month from now travel time a
Speaker 1: month from now, so basically securing um sometime outside of
Speaker 1: home for the summer break. So people are starting to
Speaker 1: schedule for like a month from now. Is that that's
Speaker 1: what you're seeing. That that's what we are seeing. They
Speaker 1: are very very short travel time, so really twomorrow and
Speaker 1: the day after where there is very high certainty that
Speaker 1: that you can actually do very short trips to see families, etcetera.
Speaker 1: And then there is is quite a bit of activity
Speaker 1: for a few weeks out really to schedule for the
Speaker 1: summer break. And actually, I know we talked a little
Speaker 1: bit about this the last time you were with us,
Speaker 1: and I'm sure that it is evolved pretty dramatically. So
Speaker 1: how does that change your service? What do you do
Speaker 1: differently in terms of what you tell your customers, sort
Speaker 1: of what you tell the whole ecosystem that you're serving,
Speaker 1: and how So we we made some quick fixes to
Speaker 1: our existing product, and our existing product is basically built
Speaker 1: on you know where you want to go, and then
Speaker 1: we help you to find the best time and the
Speaker 1: best place to place to stay. So there we we
Speaker 1: added a lot more rates that offer free cancelation, which
Speaker 1: is currently very important to travelers. But the bigger change
Speaker 1: is UM is not life yet. So we started pretty
Speaker 1: much eight weeks ago, i'd say nine weeks ago to
Speaker 1: work on on a different product that is basically helping
Speaker 1: you to find UM nice places to stay and also
Speaker 1: nice places to go within driving distance. So it's more
Speaker 1: local traveling product where you can say, I'm in New York,
Speaker 1: but I want to go for a hike over the weekend,
Speaker 1: So what are places where I can go for a
Speaker 1: nice hike and what are the nice stays that go
Speaker 1: with it? And that is from us for us strategically
Speaker 1: obviously a bit more inspirational than our existing product, but
Speaker 1: we do think that it is very very necessary to
Speaker 1: to help travelers to get step by step comfortable with
Speaker 1: safe travel. Again, Yeah, I do wonder that's really interesting.
Speaker 1: And I've noticed that just even online with you know,
Speaker 1: travel sites that I'm involved in, that they've gone from
Speaker 1: you know, they're creating more and more lists about Okay,
Speaker 1: here's you know, the top ten destinations you can drive to,
Speaker 1: or you know, the top ten destinations that are within
Speaker 1: a few hours of you. Um, you're really seeing that?
Speaker 1: Is that accel unnecessary? As you said, the first step
Speaker 1: to kind of getting us back in Okay, well we
Speaker 1: can travel safely? It is, Um, it is absolutely necessary.
Speaker 1: I mean the way we are thinking about it is that.
Speaker 1: And every traveler is obviously slightly different, so so I
Speaker 1: painted a bit black on white, but psychologically we um,
Speaker 1: all of us have been in a situation where we
Speaker 1: were were trained that we should stay away from other people,
Speaker 1: that it is actually dangerous to be close to other people,
Speaker 1: and the situation is getting better in a lot of
Speaker 1: regions around the world, so it will. What is important
Speaker 1: is that you do small steps to get out of
Speaker 1: your foot zone and get comfortable with a bit further
Speaker 1: away from home and a bit further So this, this UM,
Speaker 1: this aspect of traveling somewhere that is closed by something
Speaker 1: that might be very familiar to you, is from our perspective,
Speaker 1: very important psychologically not really to UM to stretch yourself
Speaker 1: too far actcell. What are the conversations that you're having
Speaker 1: with places, even if you're driving to them to say listen,
Speaker 1: you know, you've got to make sure that your facility
Speaker 1: is really safe and secure because if there are any problems,
Speaker 1: you know how social media, things will just go through
Speaker 1: social media very quickly and people say it's not safe
Speaker 1: to go here or it's not safe to go there.
Speaker 1: So I am curious about what are the conversations that
Speaker 1: you're having with you know, some of the places you
Speaker 1: know that I can go to your site and you know,
Speaker 1: sign up to stay at. What are those conversations? So
Speaker 1: the the there, I think the the the the complication
Speaker 1: is is UM. It's not that it is not safe
Speaker 1: to UM to stay in accommodations and hotels or in
Speaker 1: alternative accommodations from the large providers, because everybody is very
Speaker 1: concerned about the safety of the travelers UM, so there's
Speaker 1: a lot of effort put into exact cleaning standards, how
Speaker 1: many people can be where at at which point in time, etcetera. UM.
Speaker 1: From my perspective, the bigger challenges that there are very
Speaker 1: different regulations by country, but sometimes even by state or region,
Speaker 1: so the transparency about what to expect um is very
Speaker 1: very very difficult. So UM for example, in Germany, UM,
Speaker 1: the restrictions are lifted on a federal state level, but
Speaker 1: then in case of rising infections they will be reimposed
Speaker 1: based on the city level. So you can have restaurants
Speaker 1: open in one city and they're closing another city, and
Speaker 1: they are open but at very limited occupancy in another city.
Speaker 1: So it is it is the I think the accommodation
Speaker 1: of the accommodation is safe. Is is is a lower
Speaker 1: um less of an issue, but it's more what is
Speaker 1: my overall experience is it actually even worth going at somewhere?
Speaker 1: That is where where the transparency is missing, And that's
Speaker 1: that's something that we are we are working on and
Speaker 1: trying to help with who are listening to Bloomberg Business
Speaker 1: Week while you just heard some of those travel names
Speaker 1: mentioned and a mixed picture for sure. Let's get back
Speaker 1: to our conversation with Axel heat for CEO of Travago
Speaker 1: Genius on the phone from Germany. Actel help us sort
Speaker 1: of separate, if you will, the signal from the noise.
Speaker 1: Find the signal in the noise here in terms of
Speaker 1: what travel is going to look like in the short term,
Speaker 1: I feel like we're reading and hearing all the time
Speaker 1: sort of these these very dramatic stories about what it's
Speaker 1: going to be like or what it is like to
Speaker 1: get on a plane and whatnot. What do you here
Speaker 1: and and what do you predict in the short and midterm? Yeah,
Speaker 1: the the it's not that simple because it really depends
Speaker 1: on on your different on your state of mind UM
Speaker 1: as a traveler, and that is very different being very young, UM,
Speaker 1: being older UM, feeling more unsafe and uncertain, or feeling
Speaker 1: feeling overall safer. So UM it's difficult to generalize, but
Speaker 1: but I would say if there is a general trend,
Speaker 1: what we see is that there is a lot more
Speaker 1: activity on really um UM as I mentioned earlier on
Speaker 1: destinations where people are traveling from the metropolitan areas into
Speaker 1: the nature close by, within driving distance, UM, a lot
Speaker 1: more regional UM over their national travel and hardly any
Speaker 1: international travel UM. And I think that pattern will hold.
Speaker 1: And obviously that doesn't mean that there will be no
Speaker 1: international travel in a couple of weeks from now and
Speaker 1: in a couple of months from now, but but relatively speaking,
Speaker 1: more people are comfortable with local and UM and and
Speaker 1: and short travels and trips that they can control all themselves,
Speaker 1: and that that just feels safer versus things that are
Speaker 1: further away from home, bigger crowds, further out. And yeah,
Speaker 1: that's that's it was. It was different really person by person,
Speaker 1: but that those are the general trends. So Actel, how
Speaker 1: are you managing? I mean, you've got a global workforce,
Speaker 1: UM are you? Have you been able to hold on
Speaker 1: to everybody? And I'm just curious, you know what the
Speaker 1: future looks like? Will you be able to hold on
Speaker 1: to everyone or will it be contingent on what happens
Speaker 1: as things start to reopen? So we UM, what we've
Speaker 1: done is we we really UM followed a working backwards approach.
Speaker 1: So the we spent really the first couple of weeks
Speaker 1: of the crisis to form of you and hypothsses that
Speaker 1: we're working against. What next year and the years to
Speaker 1: come will look like in terms of travel market, UM,
Speaker 1: which players will be in the market, how much demand
Speaker 1: will be there? And then what does that mean for
Speaker 1: us as a business, how do we need to change
Speaker 1: our products? And then at the last step, what kind
Speaker 1: of organization was set up? Do we need and where
Speaker 1: do we need and how many people? And once we've
Speaker 1: done that, we UM announced the end of last month
Speaker 1: restructuring where we unfortunately had to let go UM quite
Speaker 1: a few of our colleagues. UM and UH. But by
Speaker 1: now have ever set up where we feel very comfortable
Speaker 1: that we can also the challenges that are ahead of us.
Speaker 1: And do you think do you have any sense of
Speaker 1: what's sort of permanent here? I mean in terms of
Speaker 1: changed behavior? Uh, you know, it's hard to say. I know,
Speaker 1: and we know that this is a solvable medical problem.
Speaker 1: We hope and that life will become somewhat more normal,
Speaker 1: But it feels like always in these crises, there's some
Speaker 1: things that you know that do sort of stick with
Speaker 1: us in the long term. Because there will be unfortunately
Speaker 1: another incident of some form or fashion like this. Do
Speaker 1: you have a sense of how how travel will fundamentally
Speaker 1: change so, UM, I mean we can only have an
Speaker 1: ipoth is there. But but I think there are three
Speaker 1: things that that makes sense to me. UM. The first
Speaker 1: one is, UM, the travel will will not be perceived
Speaker 1: automatically as a given and as safe as it has
Speaker 1: been like six or twelve months ago. UM. We have
Speaker 1: been in really in our apartments for an out ten
Speaker 1: last weeks UM, and we have been trained over that
Speaker 1: time that we should stay away from from other people
Speaker 1: and we will continue to do so for quite some time.
Speaker 1: And that will have an effect on how comfortable we
Speaker 1: feel really being close to many other people and in
Speaker 1: massive UM. And of course that will normalize over time.
Speaker 1: But but I I think it will definitely have an effect,
Speaker 1: even beyond the lockdown measures, on our own psychology. UM.
Speaker 1: The second point UM I think is is related to that. UM.
Speaker 1: I mean travel has really been almost the commodity before
Speaker 1: the crisis. You could go anywhere at any point in time,
Speaker 1: and that is not true anymore. UM. So you cannot
Speaker 1: go anywhere, UM, and you cannot go at any point
Speaker 1: in time, and even when you will be able to
Speaker 1: go again, it is less certain what exactly you can expect.
Speaker 1: And I mentioned it earlier, what is really your experience
Speaker 1: when you go now to Florida? You don't know and
Speaker 1: that uncertainty again will take some time to get the
Speaker 1: comfort again that you know exactly what to expect. And
Speaker 1: and last, but not least, there there will be UM
Speaker 1: an impact on business travel UM and we are now
Speaker 1: experiencing it. UM. You can basically run businesses completely remote
Speaker 1: UM and without any traveling. And does it have certain disadvantages?
Speaker 1: Of course it does. Um it is less personal, it
Speaker 1: is more stressful, etcetera. But that that will also have
Speaker 1: an impact on the amount of business travel that will
Speaker 1: be conducted. And don't get me wrong, I don't think
Speaker 1: that business travel will disappear, but I think it's a
Speaker 1: bit different to the last crisis, where the technology was
Speaker 1: not as advanced. I do remember in nine we did
Speaker 1: a lot more phone com princess of video conferences as well,
Speaker 1: but the technology wasn't as good. Yeah. I was always
Speaker 1: going to come back at you with that because everybody
Speaker 1: was talking the same. But I agree with you. The
Speaker 1: technology has shown has gotten a lot better and made
Speaker 1: it much more seamless process Excel Heifer always nice to
Speaker 1: check in with you. Please take care. CEO of Trivago
Speaker 1: on the phone from Germany.