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