Booking Holdings Makes Major Pivot Toward Prepaid Hotel Bookings

Nearly two years ago, when Booking Holdings appointed Glenn Fogel as its CEO, analysts would have never have expected the company to tilt toward brand marketing or make a big push toward the merchant hotel model. That's because Booking.com, the parent company's biggest brand, grew up since its early days a decade-and-a-half ago on paid marketing through sites like Google, and scaled its business on the agency, or pay at the hotel, business model. But there's a dramatic shift under way. In its third quarter financial results announced Monday, Booking Holdings revealed that its merchant hotel revenue jumped 53.4 percent to nearly $1.05 billion while its agency revenue grew less than one percent to $3.54 billion. If you looked at the numbers from the perspective of room nights booked, prepaid merchant room nights leaped 65.7 percent compared to the third quarter of 2017 while agency nights jumped a mere 2.3 percent. [For a look at the role of the agency business model in Booking.com's growth over the years, read The Oral History of Travel's Greatest Acquisition, Booking.com.] Part of this growth in Booking Holdings prepaid hotel model is taking place in Asia, where it operates its Agoda brand, which traditionally has traditionally used the merchant model, and the much-larger Booking.com, which has relied on the agency