Shop at our Travel Store and get a 10% discount now! Simply use code SPRING2023 during checkout.

Booking Holdings Sees New Flight Offering as a Key Growth Driver

Skift Take

Shouldn't have launched flights at least a decade ago? In retrospect, yes, but now it is making up for lost time, and the upside could be substantial.

Live now in 27 countries, flights on, which shunned them for many years in favor of hotels, is suddenly a key part of Booking Holdings’ strategy, and a source of growth potential.

Booking Holdings’ flight bookings leapfrogged 131 percent in the third quarter, compared with the third quarter of pre-pandemic 2019, and the bump was driven by flights booked on its U.S.-based Priceline brand, and also the new offering.

Priceline is based in the U.S., which was Booking Holdings’ strongest country in the third quarter. Priceline has offered flights since its founding in 1997, but focused on hotels in its early days, and only began providing flights in 2019 — just before the pandemic almost shuttered the airline industry for a time.

The company said about one-fourth of the people buying flights on are new customers, and so Booking sees substantial potential in turning them them into repeat customers through its mobile app and Genius loyalty program, for example. And once these new customers book flights, Booking can try to entice them to book hotels, rent a car, or reserve a tour. All of these are likely bigger money makers than the flights themselves.

Booking Holdings saw a big jump in room nights booked in the third quarter, versus the prior three months, and hotel reservations in Europe drove the increase. The company reported its third quarter financial results Wednesday.

So hotels showed a pulse, although not necessarily in cities, as Booking’s customers during its peak summer travel season still showed a preference for outdoor, beach destinations, said chief financial officer David Goulden.

“For our alternative accommodations, the global mix of room nights in Q3 of about 30 percent was up slightly from Q3 2019,” Booking Holdings CEO Glenn Fogel told analysts during the company’s third quarter earnings call Wednesday. “This increase in alternative accommodations’ share of our business in the quarter was less than it was in Q2 as we saw a greater sequential improvement in demand for hotel room nights in Europe from Q2 to Q3.”

In the third quarter, Booking Holdings’ room nights jumped 44 percent compared with the year ago period, but they were still down when measured against the third quarter of 2019. The company’s lodging supply numbers were relatively stable.

Although hotels showed strength, Fogel said alternative accommodations will command a higher percentage of the company’s lodging mix by 2026.

“And I think if you look five years in the future, I think alternative accommodations will be a higher share,” Fogel said. “So that means, of course, for us, and we’ve talked about this in the past, how important it is that we go out and make sure we get the best supply we can get. And that means working hard on that and making sure that the people who own these properties see us as a platform that they want to use that’s first in their mind that this is a great way to fill up their properties. And that’s something that we are working on, absolutely.”

Beginning of a Recovery?

Booking Holdings notched a strong third quarter, especially in top-line growth. The company’s revenue of $4.7 billion more than doubled its mark in the second quarter, reflecting the beginnings of a travel recovery. The $4.7 billion in revenue represented a 77 percent increase from the Covid-ravaged third quarter of 2020.

On the profit front, Booking’s net income fell 4 percent year over year to $769 million. But the comparisons are somewhat skewed in terms of operational performance. Booking’s third quarter of 2021 net income was diminished by $1 billion in stock losses, part of it tied to Booking’s investment in strategic partner Meituan in China. In contrast, during the third quarter of 2020, Booking realized $730 million in stock investment gains.

In other developments, Booking Holdings reported that for the first time its mobile app attracted 100 million mobile active users.

“With about two-thirds of our room nights booked on mobile devices and the majority of those booked through the app, it’s critical that we provide our customers with a positive booking experience on our app,” Fogel said. “The app is an important platform as it allows us more opportunities to engage directly with travelers. And ultimately, we see it as the center of our connected trip experience.”

The company reported progress on two key initiatives: its rollout of flight bookings on, and also improvements with its payments platform.

About one-third of’s gross bookings were processed through its own payments platform in the third quarter, up from 22 percent in all of 2020. That enables Booking to lower its fees to third-party processors, and provide more payment options to both suppliers and travelers.

In other news, Booking said it plans on increasing the diversity of its marketing channels, and it is looking to social media as a fruitful avenue to pursue.

“We’ve made progress in strengthening our foundations for digital marketing, including in social channels, though our spend so far has been small,” Fogel said. “However, we’re increasingly confident in the potential for these channels. And as we see positive results, we expect to raise our level of participation there.”

Source link

In love with travel deals? Enter your e-mail and we'll send them your way.

Your privacy is important to us, so we'll never spam you or share your info with third parties.
Take a look at our privacy policy. And, we'd be sad to see you go, but you can unsubsribe at any time.