Skift Take
Shouldn’t Booking.com have introduced flights at least a years back? In retrospect, yes, today it is making up for wasted time, and the benefit could be significant.
Dennis Schaal
Live now in 27 nations, flights on Booking.com, which avoided them for several years in favor of hotels, is suddenly an essential part of Booking Holdings’ technique, and a source of growth potential.
Booking Holdings’ flight reservations leapfrogged 131 percent in the 3rd quarter, compared with the 3rd quarter of pre-pandemic 2019, and the bump was driven by flights reserved on its U.S.-based Priceline brand, and also the brand-new Booking.com offering.
Priceline is based in the U.S., which was Reservation Holdings’ strongest nation in the third quarter. Priceline has offered flights since its founding in 1997, but Booking.com focused on hotels in its early days, and just began offering flights in 2019– prior to the pandemic almost shuttered the airline market for a time.
The company said about one-fourth of the people buying flights on Booking.com are new clients, and so Reservation sees significant capacity in turning them into repeat clients through its mobile app and Genius commitment program, for instance. And as soon as these new customers book flights, Scheduling can try to lure them to book hotels, lease a cars and truck, or reserve a trip. All of these are likely bigger money makers than the flights themselves.
Reservation Holdings saw a huge jump in space nights scheduled in the 3rd quarter, versus the prior 3 months, and hotel reservations in Europe drove the increase. The business reported its 3rd quarter monetary outcomes Wednesday.
So hotels showed a pulse, although not always in cities, as Booking’s clients during its peak summertime travel season still revealed a choice for outdoor, beach locations, stated chief monetary officer David Goulden.
“For our alternative lodgings, the worldwide mix of room nights in Q3 of about 30 percent was up somewhat from Q3 2019,” Booking Holdings CEO Glenn Fogel informed analysts throughout the business’s third quarter profits call Wednesday. “This boost in alternative lodgings’ share of our organization in the quarter was less than it remained in Q2 as we saw a greater sequential enhancement in demand for hotel space nights in Europe from Q2 to Q3.”
In the 3rd quarter, Reservation Holdings’ room nights jumped 44 percent compared with the year ago period, however they were still down when determined versus the 3rd quarter of 2019. The company’s lodging supply numbers were reasonably stable.
Although hotels revealed strength, Fogel stated alternative lodgings will command a greater percentage of the business’s lodging mix by 2026.
“And I believe if you look 5 years in the future, I believe alternative lodgings will be a higher share,” Fogel said. “So that implies, naturally, for us, and we have actually discussed this in the past, how important it is that we head out and make sure we get the best supply we can get. Which suggests working hard on that and ensuring that the people who own these homes see us as a platform that they wish to utilize that’s first in their mind that this is a fantastic way to fill up their residential or commercial properties. Which’s something that we are dealing with, absolutely.”
Start of a Recovery?
Reservation 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, showing the beginnings of a travel healing. The $4.7 billion in earnings represented a 77 percent increase from the Covid-ravaged 3rd quarter of 2020.
On the revenue front, Booking’s earnings fell 4 percent year over year to $769 million. But the contrasts are rather manipulated in regards to operational efficiency. Booking’s third quarter of 2021 earnings was diminished by $1 billion in stock losses, part of it tied to Booking’s financial investment in tactical partner Meituan in China. On the other hand, during the third quarter of 2020, Booking recognized $730 million in stock financial investment gains.
In other advancements, Reservation Holdings reported that for the first time its Booking.com mobile app drew in 100 million mobile active users.
“With about two-thirds of our space nights scheduled on mobile devices and the majority of those reserved through the app, it’s vital that we supply our consumers with a positive booking experience on our app,” Fogel stated. “The app is a crucial platform as it enables us more chances to engage straight with tourists. And eventually, we see it as the center of our connected journey experience.”
The company reported progress on 2 essential efforts: its rollout of flight bookings on Booking.com, and likewise enhancements with its payments platform.
About one-third of Booking.com’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 supply more payment options to both suppliers and tourists.
In other news, Booking said it plans on increasing the variety of its marketing channels, and it is wanting to social media as a productive opportunity to pursue.
“We’ve made development in reinforcing our foundations for digital marketing, including in social channels, though our invest up until now has been small,” Fogel stated. “However, we’re increasingly confident in the capacity for these channels. And as we see positive results, we expect to raise our level of involvement there.”