Skift hold

The largest travel company believes it has the building blocks for steady, even spectacular, growth for years to come.

Denis Schaal

After completing a strong third quarter, Booking Holdings raised its full-year outlook, highlighting strength in overnight stays, alternative accommodation, flights, AI, Europe and Asia .

Its stock price rose more than 6% after hours Wednesday evening.

Room nights for the company’s alternative accommodations outpaced Booking’s core hotel business: growth of 14% for these short-term rentals compared to an increase of 8% for hotels and short-term rentals combined. Short-term rentals accounted for 35% of accommodation bookings in the third quarter, up 2 percentage points year-over-year.

During the company’s earnings conference call, CEO Glenn Fogel said the company’s alternative lodging business was about two-thirds the size of the “largest player in the real estate industry residential in this market”, namely Airbnb.

Overall overnight growth of 8%, beating company forecasts, was driven by strength in Europe.

Asia accounted for 24% of Booking.com’s room nights, higher than before the pandemic. Overnight stays in Asia saw double-digit growth in the third quarter.

Airline ticket sales, powered by Booking.com and its sister brand Agoda, increased 39% year-over-year. A year earlier, growth was 28%.

Connected travel bookings, in which travelers can book accommodation and flights, for example, have increased by 40%.

Progress on Generation AI

Fogel said the development of AI across the group’s brands represents “one of the most exciting moments” the company has ever experienced.

“This type of technology is truly transformational,” Fogel said. “And this is going to make things much better for everyone in the travel industry, especially travelers.”

In October, the company’s Priceline brand “launched Penny Voice, which allows Penny to engage in verbal conversations with travelers and help them plan trips, search for hotels and manage reservations,” a- he declared. “As Priceline continues to improve this offering, we envision Penny being able to anticipate needs based on preferences and past interactions and then respond to them vocally in real time.”

Penny, which is a voiceless AI travel assistant launching in June 2023, has had more than 3 million interactions with travelers so far, Fogel said.

Fogel said 3 million sounds big, but it’s small for a company the size of Booking Holdings.

He refused to predict what the financial impact of AI might one day be. “We’re not going to project those kinds of numbers right now,” Fogel said. “But what I will say is that it’s extremely important.”

The essentials

For the third quarter, Booking Holdings reported net income of $2.5 billion, comparable to the previous year. The company suffered a $365 million loss in the quarter due to a proposed settlement with Italian regulators, but also saw a $250 million reduction in U.S. income tax resulting from a court decision.

Revenue jumped 9% to $8 billion.

Based on the strength of the third quarter, driven by higher demand and longer booking windows in Europe, the company raised its full-year outlook for gross bookings and turnover. Gross bookings are now expected to grow 8%, compared to an earlier forecast of 6%. And revenue is expected to rise just under 10% versus a previous forecast of more than 7%.