Booking Holdings Inc. reported a decline in room nights booked in the first quarter that was greater than analysts’ estimates, reflecting the extent of economic devastation the coronavirus has wreaked on the travel industry.
The online travel operator said the number of room nights booked dropped 43 per cent from a year earlier, while Wall Street had estimated a drop of 29 per cent, according to data compiled by Bloomberg. Gross travel bookings, which reflect all travel services booked by customers, came in at US$12.4 billion, a 51-per-cent decrease. The Norwalk, Connecticut-based company reported revenue fell 19 per cent to US$2.29 billion in the period, beating the US$2.15 billion projected by analysts.
“The COVID-19 pandemic has profoundly impacted our company and the entire travel industry,” Chief Executive Officer Glenn Fogel said in a statement Thursday.
Booking is the first of the online travel giants to report results this year and its results will be held up as benchmark for its smaller rivals trying to weather the crisis.
The pandemic has shut down most of the world for about the past two months, gutting the travel industry and sparking what is likely to be the worst economic slowdown in decades. Airbnb Inc. and TripAdvisor Inc. have cut a quarter of their workforces, Expedia Group Inc.’s credit rating has been downgraded and Booking has applied for government aid.
“The travel industry is down 80 per cent to 90 per cent — this is the first time that has ever happened in modern times,” said Kevin Kopelman, an analyst at Cowen & Co. who has covered Booking for almost a decade.
Last month, Booking said newly booked room night reservations were down more than 85 per cent in the first few days of April, according to a securities filing. It predicted the virus would impact the current quarter “much more significantly” than the first.
Booking’s stock has fallen 31 per cent this year, outperforming Expedia and TripAdvisor. The company, formerly known as Priceline, reported profit excluding some costs was US$3.77 a share in the first-quarter, lower than the US$5.38 analysts projected. The shares fell about two per cent in extended trading Thursday.
In reporting its results as scheduled, Booking has indicated “the company is further down the path of understanding and addressing the ongoing pandemic” than its rivals, according to a note by Wedbush Securities analysts. Expedia, which typically reports earnings before Booking, has delayed delivering its results until May 20.
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