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The world leader in online travel and related services, Booking Holdings, released its quarterly earnings that beat market expectations for the third time in the past four quarters. Gross travel bookings net of cancellations were up 24% year-on-year to $25.3 billion.
Revenues were also up 4% for the quarter to $5.04 billion, while net income was up 10% to $2 billion or $45.54 per share. This was Booking's busiest quarter which includes the Northern Hemisphere summer holidays. Booking saw over 223 million room nights booked, up 11% year-on-year.
We're all aware that competition is strong in the online travel space where Airbnb also wants its share of the travel pie. The beautiful thing about Booking is that it has a full view of their customers travel plans from ground transportation, restaurant reservations, and local attractions which all can be booked on Booking.
The company is also integrating more of its services to get a better outcome for clients, for example the Rentalcars.com business was combined with Booking.com, which led to a 8.5% increase in rental car days to 21 million.
Google has optimised the hotel search function for mobile devices and computers to find hotels by price and browse amenities. Booking said that they saw headwinds in that segment, but that it is a small business channel for the company. Expedia and TripAdvisor shares were down a lot yesterday as both complained about Google's efforts mentioned above. Apparently they lead to less traffic to their own sites as they get less free links on the Google first page when clients search for travel services. These companies make revenues in part from selling ads based on user clicks.
We still maintain that as the middle class grows, and people spend more money on experiences and not "things"; it is companies like Booking that come up top. We like the company as it can potentially do more with the same offering and it should be one to consider adding to your portfolio in order to benefit from global travel trends.
