April 21, 2024

Eurocean 2004

Life is an adventure

Europe travel drives Booking Holdings’ revenue uptick in Q3

BOOKING Holdings is reporting that room nights booked in Q3 2021 increased for the third quarter in a row, growing to 183 million, and revenue increased to $4.7 billion – putting it just shy of Q3 2019 revenue of $5 billion.

Room nights in the third quarter were up from 157
million in Q2 of this year, up nearly 44% over the same period last year
and – maybe most noteworthy – inching closer to pre-pandemic Q3 2019 levels of
223 million.

Total revenue more than doubled compared to
the prior quarter, when it was $2.2 billion, and jumped 77% over Q3 of 2020.

“We are pleased to report another quarter
of sequential improvement in room night trends, which was primarily driven by
better results in Europe. Revenue in our seasonally strongest third quarter was
$4.7 billion, which was more than double the amount of revenue we recognized in
the second quarter of 2021,” says Glenn Fogel, CEO of Booking Holdings. 

“We are encouraged by the signs of recovery
we saw in many parts of the world in the third quarter, and our teams are
working hard to continue to strengthen our company’s position and execute
against our strategic priorities.”

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Fogel says international travel, particularly
within Europe, drove the overall improvement in room night trends from Q2 to
Q3, but with cross-border travel still restricted in many areas during the
quarter, international room night figures are still “significantly depressed”
compared to 2019, down 50% comparing the same quarters. 

For all room nights booked, about 30% were alternative accommodations – up slightly from Q3 2019. However, Fogel says the company saw greater sequential improving demand for hotel room nights in Europe from Q2 to Q3. Of the 28 million accommodation listings on Booking.com, about 2.4 million are for alternative accommodations, relatively unchanged from Q2. 

Gross travel bookings – the total dollar
value generally inclusive of taxes and fees of all travel services booked, net
of cancellations – were $23.7 billion, an increase of 77% from the prior year’s
comparative quarter but still down 6% compared to Q3 2019.

Adjusted EBITDA for the third quarter of
2021 was $2.1 billion, a 111% year-over-year and just 15% below Q3 2019 –
making it the most profitable quarter since Q3 2019.

Booking Holdings marketing expenses nearly
doubled in Q3 of this year compared to the prior year, going from $731 million
to $1.38 billion. Compared to Q3 2019, it was a 3% increase.

Fogel says the company saw a higher
percentage of customers booking direct than in the third quarter of 2019, even
as the company “leaned in to performance marketing channels” during the period.
About two-thirds of the room nights were booked on mobile devices, and the
majority of those came through the app, which surpassed 100 million monthly
active users during the quarter.

Along with focusing on improving the user experience on the app, which Fogel calls “the center of our connected trip experience,” he says the company will continue to work to increase consumer awareness through advertising on social channels.

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

Total company air tickets in Q3 were up 131% compared to the same quarter in 2019. Fogel says the growth is primarily driven by strength at Booking Holdings-owned Priceline, but he says it was also helped by Booking.com’s growing flight offering, which is now live in 27 countries.

“We continue to scale up a robust flight
platform,” he says.

“We are seeing that over 25% of Bookings’
flight bookers are entirely new customers. With these new customers we are
seeing an encouraging attach rate of accommodation bookings. However there is
more work to be done to further optimize the cross-sell opportunities.

“That’s part of the overall vision of being
able to bring new customers in from different verticals, different ways than
we’ve done in the past, which is primarily paid-for performance marketing …
and being able to provide them with a lot more value.”

Fogel also made note of the United Nations Climate Change Conference, known as COP26, currently taking place in Scotland, saying he “cannot overstate the importance for our industry to come together to work toward the goal of carbon neutrality by 2050.” Fogel says Booking Holdings is working to make it easier for consumers to find sustainable accommodation options, working with supply partners to help them improve sustainability at the property level, and the company will publish its own “climate transition plan” in early 2022.

• This article first appeared in PhocusWire.