Booking.com made headway in the U.S. while Expedia was likely distracted getting its internal house in order. Throw Hopper into the mix, and Booking will have to fight to solidify any inroads.
Booking Holdings officials have spoken for years about their aim to take market share in rival Expedia Group’s stronghold, namely the U.S., and Booking appears to be delivering on that goal.
“In the U.S., both our Priceline and Booking.com brands continue to execute well and contributed to U.S. room night growth of almost 30 percent and gross bookings growth of about 60 percent in 2022 versus 2019,” CEO Glenn Fogel said during Booking Holdings fourth quarter earnings call Thursday. “On our volume and consumer spend basis, we have grown our U.S. business to be meaningfully larger than it was prior to the pandemic.”
Without specifying the amount, Fogel said Booking gained market share in the U.S., and outpaced the broader accommodations market there. He said the U.S. gains came from brand marketing, adding flights to Booking.com, increasing adoption of the company’s payments platform, and working with “partners to ensure we are delivering incremental value to them.”
He said the company strives to access competitive rates from partners, such as hotels, and when it can’t Booking often discounts rates on its own to provide value to travelers.
Booking Holdings’ largest brand, Booking.com, is based in the Netherlands and has always seen Europe as its strongest market. It thought it could do better in the U.S., and is now starting to deliver on the effort.
Speaking about global competition, Fogel said Booking made inroads because competitors in 2021 “just didn’t seem to be out of the gate so fast in terms of their marketing, in terms of what they’re doing, whether it be brand or performance marketing in terms of trying to get the same demand that we are out getting there.”
In 2022, Booking went “full throttle” trying to gain customers through performance marketing in search engines, and increased its spending on brand marketing.
In the fourth quarter, Booking saw its room nights jump 39 percent year over year. Net income increased 100 percent to $1.2 billion on revenue of $4 billion, a 36 percent jump compared with the fourth quarter of 2021.
The company notched $3.1 billion in net income for full-year 2022, outpacing the prior year by 162 percent. Booking Holdings generated $17.1 billion in revenue, a 56 percent year over year increase.
Artificial Intelligence ‘Hype’
In response to an analyst’s question, Fogel said there is a lot of hype about generative AI (Artificial Intelligence) at the moment.
“I think we’re still probably in the peak of inflated expectations, but there’s no doubt this technology has seems to be accelerating all the time,” he said.
Fogel said he’s not scared about any competitive threats from generative AI, and is excited about it. He said the company has been working on AI for years, and will adapt to any far-reaching changes as it has done for the past 20 years, including the transition from desktop to mobile.
“So I am confident in the future, and I am not scared, I’m actually encouraged by being able to use all of these new tools to provide a better service for both sides of the marketplace,” Fogel said.
Strong Demand, Longer Booking Windows
The company is seeing strong demand and customers booking trips further in advance. Room nights booked in January 2023 hit 95 million, which surpassed the previous record set in May by more than 10 million. The 95 million room nights was 16 percent compared to January 2019.
Much has been said about how the length of booking windows — the span between when a traveler books a trip and actually takes it — greatly diminished during Covid.
Chief Financial Officer David Goulden said at Booking Holdings, the booking window for next summer has reverted to pre-Covid lengths, if not longer.
“So summer bookings, yes,” Goulden said. “So we have seen, as I mentioned, the travel window the booking window recover completely on a global basis. But actually, the booking window has now expanded a little bit in Europe and North America and still slowly was — or shortly was, I would say, in Asia.”
$1.2 Billion Gain on Meituan Investment
Goulden said the company sold its investment in China’s Meituan in February and realized a $1.2 billion gain, which was 250 percent compared with its original investment. Booking still has a partnership in Meituan.
Fogel announced that Goulden would retire in early 2024. Goulden, who’s been chief financial officer since February 2018, will remain at the company for an additional two years after his retirement working on various projects, Fogel said.
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Photo credit: Glenn Gogel, Booking Holdings CEO (left) with Skift's Dennis Schaal at Skift Global Forum in September 2022 in New York City. Fogel said Booking made market share gains in the U.S. in 2022.