For Booking Holdings CEO Glenn Fogel, the future of travel is the “connected trip.” Everything is seamless, everything is easy, and everything updates automatically if conditions change—when, say, a flight is delayed or inclement weather postpones a city walking tour. Fogel believes AI holds the key to fully realizing this vision.
Booking Holdings provides online travel services in more than 220 countries. Its 2024 gross travel bookings were $166 billion (up 10 percent year over year), and its adjusted earnings totaled more than $8 billion (up 17 percent from the previous year). The company’s brands include Kayak, OpenTable, and Booking.com, one of the world’s leading accommodations websites. Fogel joined the parent company in 2000 and became its CEO and president in 2017. He is also CEO of Booking.com.
McKinsey Senior Partner Maurice Obeid recently spoke with Fogel in New York City, not far from Booking Holdings’ global headquarters, in Norwalk, Connecticut. Their discussion touches on Booking’s corporate strategy, the rapid innovation that technology is bringing to the travel industry, and the influence that personal challenges can have on building resilience and leadership skills. (Fogel himself suffered a severe stroke in high school before going on to graduate from the Wharton School of the University of Pennsylvania and Harvard Law School.)
The following is an edited transcript of their conversation.
An evolving model
Maurice Obeid: Booking went from being a small company to being the largest and most valuable travel company in the world. If you reflect back, what are some inflection points that set its trajectory?
Glenn Fogel: I became CEO of Booking Holdings, which is the company that holds all our brands, in 2017. At that time, we were almost entirely a single product. Hotel bookings made through Booking.com were about 90 percent of the business, and they were all done in the same manner—handled with an agency model. Customers had to enter a credit card to get a reservation for a hotel, but that was only so they could be charged a no-show fee in case they didn’t show up. The credit card wasn’t actually charged up front.
That was a great model at the time. And it was a differentiator for us from other services, where if you booked a hotel, they would take your money up front even though you might not use the room until many months later.
Our model is very different now. We are still predominantly doing hotels. But we don’t only use the agency model. Now, we will charge the credit card up front and pay the hotel later. That’s a change. And there’s an advantage in that, because we can do certain things that we couldn’t do before, like pricing adjustments.
Additionally, we’ve expanded to all parts of travel, including flights, ground transportation, and attractions. We don’t have as much awareness in the US, because Booking.com started in Europe. People might not realize how big we are. But we’re building up brand awareness and growing very rapidly.
Personalized journeys without the worry
Maurice Obeid: You’ve talked a lot about the connected trip. What does that mean, practically speaking? And where are you on that journey?
Glenn Fogel: People want their travel to be easy. They want it to have good value. They don’t want to have to worry about it.
But in travel, things happen. Weather is a big problem right off the bat. And then you can have mechanical issues with a flight, or there can be overbooking at a hotel. There are so many things that can go wrong in a travel experience. I believe we need to create a service that can help prevent and solve these problems and reduce the worry.
We should be able to use technology to greatly improve how things are done right now, because none of the systems currently talk to each other. There’s very little ability to go to one person, one system, or one service and get everything solved or planned.
The idea of the connected trip is to use technology personalization to make sure we are giving customers what they want and doing it in a way that provides the most value. And if, God forbid, anything goes wrong, then we can solve that problem quickly and easily and get them back on their way. Or, even better, we can solve the problem before a customer knows a problem is happening or is about to happen. By using AI, machine learning, and all the ways that one can be probabilistic about problems that could happen, we can build a better system. This will provide something that both consumers and our partners—the suppliers, hotels, airlines, and so forth—will like because we’ll provide more value to both sides.
We’re not there yet. We’re building it. It takes tremendous time. If it was easy, it would already have happened. But we are seeing benefits already in terms of how we are able to use AI to solve customer service problems more quickly, how we’re able to offer someone who books a flight with us the right ground transportation from the airport to the hotel, or how we’re able to offer the right hotel that matches people’s needs or to offer up attractions at the right time.
I’ll give you a great example that I love using. Let’s say you’re going to Amsterdam. You want to see the Rijksmuseum on Thursday and then take a canal tour on Friday. But we know the weather forecast says it’s going to be sunny on Thursday and rainy on Friday. We should be offering customers the option to switch their plans. The customer might not be paying attention to the weather forecast—they might be looking around at the tulips—so if we can give them information, give them the agency to make the decision, and provide an opportunity for them to do it, we think they will be happy we’ve done that.
AI travel agents?
Maurice Obeid: Booking sits between the traveler, the suppliers, and, increasingly, the AI systems supporting the traveler. I’ll illustrate a question through an example. If I am going to Barcelona for a weekend and I want to spend a maximum of $2,000, there’s a world where I just tell my AI agent that. Then the AI agent books directly with the suppliers. What is Booking’s role in that scenario, and what is the asset you want to double down on to make sure there will be a role?
Glenn Fogel: There are a lot of questions about the future role of the intermediary and what the intermediary’s advantage will be. We have that issue right now, actually, because people around the world overwhelmingly book directly with hotels rather than through us. People go to Google and type in their search parameters for a trip to Barcelona and then go directly to the hotel instead of us.
But as the largest travel player in the world, and with hundreds of millions of satisfied customers, why do people come to us at all when they could do those things instead? And in the future, why will they come to us?
It will always come down to whether you are providing higher value and better service. Even for simple things like booking a hotel for a weekend, we are able to provide much better service. For example, we can suggest experiences because nobody goes to the hotel just to sit in the room. We can help people get around and do things at the destination. There are issues around fintech—how you are handling payments and what sort of travel insurance you are getting—that are very important for many people. By bringing all these services together in one place at one time, I think we will continue to have an advantage. That’s why people use us now, and that’s why people will use us in the future. And whether the technology improves at a faster or slower rate, the same rule applies: We have to do it better and faster than our competitors do it.
Some people believe that everyone is going to do everything without using an intermediary. I don’t think that’s the way it’s going to go.
Maurice Obeid: The big LLMs [large language models] are interested in travel. What prevents travel booking from happening within an LLM portal? And is that a source of risk for Booking Holdings?
Glenn Fogel: There’s certainly always a risk. We know people are going to the large language models for travel information. And the question is, after they have gotten this travel information, will they go over to us at Booking.com, or will they somehow complete their transaction within the LLM ecosystem?
I spoke about the connected trip and all the added value in that. Right now, mid-60 percent of our customers come to us directly. Why? It always comes back to providing better service. It’s easy for people to trust that they are getting the best deals and the best service from us.
There is also incredible complexity in executing travel—the regulatory framework, the payment framework and all the regulations that go with it, and so forth. It’s a much more complicated industry than many people realize.
I think it will be a very long time before the LLMs will be able to crack the combination of execution and trust issues that are so important in the travel industry.
The leadership journey
Maurice Obeid: Let’s shift gears to the topic of leadership. What are some of the traits you think have been helpful for you in terms of being a leader?
Glenn Fogel: What is leadership, and how does one become a good leader? There are a lot of books written about that—shelves and shelves of libraries. And I’ve seen all different styles. And when you look at people who you admire as great leaders, they’re all different.
It varies by the individual—what works for you and what works for the organization that you are leading. I’ve been very fortunate, first of all, that I came in as CEO of a company that already had a lot of great leaders running the organization. I benefited from having experienced people there who were doing well.
The second thing that was very helpful is that because we are so global, it offers more perspective—recognizing that things are different in different places and that you have to adapt. Being able to adapt to a new situation is really important.
And then it’s curiosity. Not thinking that I know the right way, but instead letting you tell me what you think is the best way, and then hearing that and asking questions, back and forth, to bring out from the whole team what the best potential future path is.
Maurice Obeid: You’ve spoken publicly about your personal journey early in your life. How has that experience affected your professional life?
Glenn Fogel: Everybody is a product of the life that they have lived to get to where they are. For myself, I grew up with parents who did not have university degrees but who highly valued education, and that really instilled in me the need for education. So that’s something that gets one going in a certain direction.
Then toward the end of my high school time, I was doing very well and thinking about university. And then I unfortunately had a very severe stroke, and it wiped out all of my language abilities and paralyzed my right side. It took me some time to recover, without even knowing whether I would recover or not. And that creates a different perspective—working very hard to come back, overcoming it, and going forward and taking jobs.
And I’ve been fired. Before I came to Booking Holdings, I was fired as an investment banker at a company that was acquired by another bank, which got rid of most of the bankers but kept some. I couldn’t just say, oh well, they fired all the bankers—they made a choice. And that, of course, can be a very personal blow.
So many things affect everybody individually, and nobody escapes without some unfortunate events. The question is: How do you deal with these hardships or challenges? And does that make you stronger and better and more resilient? Does it give you a sense that if you work harder, you’re going to be able to recover? I’m very grateful for whatever was within me that enabled me in some very bad, dark times to be able to come back.
Maurice Obeid: How does this history of resilience affect you now? Does it mean you don’t take no for an answer? What are the day-to-day implications?
Glenn Fogel: There certainly is an element of pushing harder, even when it’s painful, and trying even more. But sometimes one does have to recognize that something is not going to work and change direction. That’s very important too. There is a point you can reach where just working harder is not going to get you there.
But I do believe that basic self-discipline is one of the ways to achieve success. And when I say success, there are many different ways to define that. But almost all of these definitions will incorporate an issue where an element of self-discipline will get you further.
