Glenn Fogel, CEO of Booking Holdings, warns on No Priors that there is no moat, so companies must keep building new services and understand their business before committing capital.
Fogel says Booking's Penny agentic assistant is still too small to show up much in the numbers, even as Elad Gil says its adoption has doubled monthly.
Fogel says Booking will invest where returns justify it, pursue acquisitions where they make sense, and otherwise return cash, having bought back about 40% of shares in roughly a dozen years.
Booking CEO Expects AI to Strengthen Travel Platforms
Booking Holdings' CEO sees AI as a boost to a travel marketplace, not a threat to it. Travelers and partners both gain, and Booking is testing agents like Penny while measuring what they cost. He holds that no advantage lasts, so the company keeps building new services and returns surplus cash.
Takeaways
No competitive advantage is permanent. Fogel warns there is no such thing as a moat, since advantages can vanish overnight. The durable strategy is to keep building new services and understand a business deeply before committing capital. Travel is also heavily regulated, with rules growing worldwide.
AI helps travel platforms rather than replacing them. Outsiders assumed AI would make travel companies worthless. OpenAI built a ChatGPT checkout feature, then canceled it and said it would not be merchant of record. Booking's stock rose about 8%. Fogel says AI benefits both travelers and partners.
The AI boom echoes the dot-com boom. Fogel sees early optimism followed by backlash, and compares it to the California gold rush. Speculation yields real innovation alongside much disappointment. Gil notes about 1,500 companies went public in the Internet era and at most two dozen remain.
Penny is promising but still small. Gil says Priceline's Penny agent adoption has doubled monthly and lifted conversion. Fogel says it barely shows in the numbers yet. Booking must still learn running costs, such as token consumption, against returns including lifetime value.
AI is already improving customer service economics. Cost per customer contact is down and satisfaction is up. Fogel stresses that some customers still want a human. The gains matter at scale, since Booking handled $186bn of travel and over a billion room nights last year.
Booking returns cash after reinvesting where returns justify. Fogel's framework is to invest where returns justify it, make sensible acquisitions, and return the rest. Booking has bought back about 40% of its shares in roughly twelve years, and plans about $700m of investment this year.
Speed of AI displacement worries Fogel. Machine translation replaced the human translators behind Booking.com's content in over 40 languages. He worries about workers like a displaced 50-year-old truck driver, says government retraining has not worked, and warns societies rejecting AI will fall behind.
Fogel's path to Priceline
Fogel studied at Wharton and Harvard Law School, then worked as a Wall Street banker until 1995, when his bank was bought and he was fired.
He wrote a novel, then took a head trading job at Morgan Stanley, which he did not enjoy.
Tap a name to go there · tap a line to see why they are linked
On this episode 2
Show 1
In 1999 he accepted a corporate development job at Priceline and went long on Internet stocks while waiting to start. The Nasdaq peaked a week later.
Priceline's stock fell to about a dollar and was reverse split to about $6 to avoid delisting.
He has stayed 27 years, and he says the stock has risen roughly a thousand times since.