Glenn Fogel, CEO of Booking Holdings, told CNBC on Thursday that a sharp rise in inflation has so far not reduced travel demand in the spring and summer months.
“Not yet. Not yet,” said Fogel, whose company offers online travel services, including flight bookings. He mentioned the obstruction of the Kovid epidemic in his travel routine.
“When you have two-year-olds who don’t travel the way people want to travel and you make a lot of savings in that time, the prices can be really high and people are saying, ‘I don’t care. I just want to travel. I want to go somewhere.’ Chai, the CEO said in an interview with Closing Bell.
The Federal Reserve and other central banks around the world have raised interest rates and are expected to rise further in the future. This is the main lever in the monetary policy toolbox to reduce inflation.
But in the near future, Fogel says he expects the price situation to worsen for travel-related services. One reason for this may be fuel prices, which have risen in response to the Russia-Ukraine war.
“If you’re planning a summer trip, the price is going up right now. I don’t think it’s going to turn around at all,” Fogel said.
Premium travelers are generally seen as less sensitive to higher prices because they are in a position to carry premium benefits in the first place. Airlines want to cater to that group of travelers, especially on international routes when cross-border travel begins. International travel has been slower to recover from an epidemic-related collapse than domestic travel.
Fogel said Booking Holdings is “optimistic” there will be strong international travel this summer, but noted that there will be regional differences.
“Asia [is] Not coming back so fast, say, Western Europe, which we’ve been seeing for quite some time. Also, of course, the tragedy of the Ukraine war, which certainly affected Eastern Europe somewhat, “Fogel said.