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Booking Jumps on Upbeat Outlook as Slowdown Not as Bad as Feared

The Booking Holdings website on a laptop arranged in the Brooklyn Borough of New York, US, on Monday, July 31, 2023. Booking Holdings Inc. is scheduled to release earnings figures on August 3. Photographer: Gabby Jones/Bloomberg (Gabby Jones/Bloomberg)

(Bloomberg) -- Booking Holdings Inc. shares jumped to a record high after the travel company raised its full-year gross bookings outlook and reported third-quarter room nights booked that beat analysts’ expectations, a sign that consumer demand didn’t slow as much over the summer as some investors had feared.

Room nights booked at the company that owns travel brands including Kayak and Priceline increased 8% to 299 million in the three months ended Sept. 30, it said in a statement Wednesday. That increase exceeded Wall Street’s estimates and its own guidance. Gross travel bookings, which include taxes and fees, were $43.4 billion, compared with a projection of $41.4 billion. Adjusted earnings per share were $83.89. Investors were expecting $77.27.

Buoyed by these results, Booking lifted its full-year outlook, Chief Financial Officer Ewout Steenbergen said on a conference call with investors on Wednesday, saying it now expects gross bookings growth of about 8% and revenue growth just below 10%. Its fourth-quarter forecast also broadly surpassed analysts’ estimates.

The shares rose as much as 8.8% to $4,856 Thursday morning in New York. Evercore ISI analysts wrote in a note late Wednesday that the results are “surprisingly positive” as the company “handily beat nervous” third-quarter expectations and issued an outlook at the high-end of estimates. The company’s stock has risen more than 25% this year, outpacing Airbnb and Expedia, whose shares have seen more modest growth and are set to report earnings next Thursday. 

For months, there had been signs of a slowdown across the industry, as price-sensitive consumers rein in their travel spending. After several blockbuster quarters fueled by an initial post-pandemic vacation boom, online travel giants like Booking, Expedia Group Inc. and Airbnb Inc. have issued softer outlooks, citing changes in consumer behavior. This includes opting for lower-rated hotels, planning shorter trips and booking more last-minute reservations. That trend in particular makes it difficult for companies to forecast demand and sales.

Norwalk, Connecticut-based Booking’s latest results offer clues as to whether travel growth might return to where it was before the pandemic. During the company’s last earnings call, Steenbergen blamed its disappointing summer outlook on a “mild moderation” in the European travel market, to which the firm has more exposure than its US peers. 

But for the third quarter, Booking’s increase in room nights booked was “driven primarily by stronger performance in Europe,” said Chief Executive Officer Glenn Fogel. Its business in Asia also performed well with double-digit growth, he added on Wednesday’s call, saying the company remains optimistic in its outlook for the region.

Booking continues to see healthy levels of growth for room nights booked for the fourth quarter as travel demand remains resilient, Fogel also said on the call.

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