Booking Holdings Business Model Was Slowing Things Down Pre-Covid
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Dennis' Online Travel Briefing
Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.Booking Holdings has an answer to critics, who over the last few years mused that its best days were behind it, and that online travel agencies generally would be hard-pressed to rekindle the growth of yesteryear.
It was the business model, stupid.
David Goulden, the Booking Holdings chief financial officer, said at an investor conference last month that the company's business model was a major reason for its slowing growth leading up to the Covid-19 pandemic in early 2020.
After all, room night growth had progressively cooled from 28 percent year over year in 2016 to 11 percent in 2019. Gross bookings notched just 4 percent growth that year, and revenue's uptick was a tad slower than that at 3.7 percent.
Goulden pointed to flagship brand Booking.com's pay at the hotel, or agency, business model as one of the culprits behind the sluggish pre-Covid growth. Today, Booking.com has transitioned to doing much more business on a merchant model basis where guests pre-pay for accommodations, and it has expanded into flights.
"Booking.com, our biggest brand, we were almost entirely an accommodations
