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The rental car market has been 'wild': Booking Holdings CEO

Glenn Fogel, Booking Holdings CEO joins the Yahoo Finance Live panel to discuss their current earnings and the impact of COVID-19 on the industry.

Video Transcript

- A parent company of, Priceline, Kayak, and OpenTable, Booking Holdings seeing shares pop today after reporting earnings and a monster bounce back in terms of travel. Of course, year over year comps not exactly the best way to look at it, but impressive in terms of the percentage growth over that time period, 852% from the prior quarter during, you know, a lot of lockdowns and not a lot of travel.

The company, though, missed on the bottom line. No matter reported an adjusted loss, you know, there as you can see on the screen. A little bit larger than analysts were expecting. But impressively still, when you look ahead, the company only projecting a minor pullback when it comes to travel related to the Delta variant.

And for more on what the company is seeing as we move forward, I want to welcome in the CEO of Booking Holdings, Glenn Fogel joins us right now And Glenn, good to see you, good to speak with you. You know, the big question has been how quickly this bounce back could come? But talk to me about what you saw in the quarter, what you're seeing as you look at.

- Well, Zach, thanks for having me. And obviously, we're very pleased with what happened in the second quarter. Numbers were good. Very pleased to see 59% sequential growth in our [INAUDIBLE] room nights. Very strong to see that. And, of course, we did mention Delta variant, which kind of concerned, we're watching it. And we did mention a modest pullback in July.

But I'll tell you, people like to travel. And when they feel it's safe to travel and governments get rid of restrictions, people travel. And that's what we're seeing.

- The question is the one you just asked, which is whether people feel safe enough to travel right now. You mentioned that modest pullback between June and July. What's your sense of just how much of an impact, at least the headlines around the Delta variant are having on people and their willingness to travel right now?

GLENN FOGEL: So what we said was the modest pullback in July compared to June. But we also said that the July number was higher than the whole quarter for Q2. So it shows that while it's modest, it's still a little bit. But we know people like to travel. Look, I think one of the things that's very critical for everybody to think is long term.

We're going to get through this pandemic. It's going to end whether or not it ends quicker because people are doing the right thing and getting vaccines as quickly as they can or takes a little longer because unfortunately some people are just being a little reluctant to get vaccines. And obviously, for many parts of the world, they're waiting anxiously for distribution to their parts of the world.

We know at some point, people will be inoculated. They will be vaccinated. And this terrible, terrible pandemic will go away. And travel will go back to the way it used to be.

- And, of course I mean, we've seen pricing on other sides of the business. I didn't mention one of the businesses you guys have, And then we chatted a lot about the increase in car prices and rental prices there. I mean, what are you seeing particularly on that front and the pricing power Booking Holdings has here, maybe in the pandemic as we move out of it?

GLENN FOGEL: Well, it has been some really wild days in the rental car business. I agree with you on that. I know anecdotally stories of some places like Hawaii, where the average daily rate for a rental car was much more than their flight. Crazy, when you think about it. Though, of course, it's hard to get more supply to Hawaii. You can't drive the cars to Hawaii. So a little bit of that.

And this is all an impact of two things. One, fleets were reduced during the pandemic. That's understandable. But then the thing that nobody would have anticipated is it's hard to fleet up as it's called because there aren't as many cars. We know about the issue of the semiconductor chip shortages and production shortages. So that's caused a little bit of a strange anomaly between supply and demand in the rental car business.

However, it will come back to a more balanced supply demand situation at some point. And I'll say it, people are being creative. They're coming up with ways to find ground transportation. And we're still-- I don't think it's impacting it all in terms of total travel. Somebody can't get a car in a certain place, maybe they end up choosing a different place. But travel is still strong.

- Yeah, I mean, I will say first hand, I have seen some of those rates there for rental cars. Certainly, eye popping. One of the things you've highlighted in the quarter here in terms of the acceleration you saw, the pickup in demand, strong numbers out of Europe, both domestic and international travel there.

I mean, what kind of trips are people taking right now? Is it really still just about sort of ground travel as you've described? People feeling a little more comfortable going outside of their zone but a little closer to home than they would have pre-pandemic or are we seeing people booking some of these bigger trips now?

GLENN FOGEL: Well, it's still primarily interregional. When I mean interregional, I'm talking about it's international because it's different country, but it's within the European area. There's still not a lot of long haul international travel. And we see that because Asia is doing so poorly. For example, you can't take a trip from, say, France to Thailand. You're not going to do it as a tourist nowadays.

What we really need, and this is so important, is the entire world to get safer so people can start doing that long haul international travel again. Yeah, it's wonderful that Europe came out with a green certificate, a way for people to prove that they're are a safe traveller and be able to travel from country to country because they showed that they are vaccinated.

And that has helped travel a lot. And anything we can do to make travel safer, for people to feel safer travel, help stimulate travel. And that's a bit why we're seeing people going from country to country in Europe.

- All right, Glenn Fogel, CEO of Booking Holdings, appreciate you coming on here to chat as we see shares, again, continue to move higher. Thanks again for the time.