Booking Holdings is locked in on its mission to create the connected trip – something it has been talking about for more than five years – and artificial intelligence will be a critical part of that continued journey, CEO Glenn Fogel shared on the company’s third quarter earnings call.
“We continue to see growth in connected trip transactions, which means a trip that includes booking more than one travel vertical,” said Fogel. “These connected transactions increased by over 40% year over year in the third quarter and represented a high single digit percentage of Booking.com total transactions.”
Fogel said that by offering the capability to plan and book multiple elements of a trip in one place – like a hotel plus a flight plus experiences – not only provides a better experience for travelers but provides better returns for the company.
“We have seen in past experiments that customers who choose to book a connected trip book more frequently with us and have a higher likelihood of booking directly with us in the future,” Fogel said.
These connected transactions increased by over 40% year over year in the third quarter and represented a high single digit percentage of Booking.com total transactions.
Glenn Fogel, Booking Holdings
While Fogel was bullish on the future of the connected trip, he also shared his satisfaction with the quarter’s financial results.
“We are pleased to report third quarter room night growth of 8%, which exceeded our prior expectations, driven primarily by stronger performance in Europe,” said Fogel in the company’s earnings press release. “We continue to make progress against our strategic initiatives while driving cost efficiency in our business, which I believe will position our company well for the long term.”
Also in the third quarter, Booking Holdings brought in total revenue of $8 billion, a 9% increase year over year for the quarter, and adjusted EBITDA was $3.7 billion, a 12% increase over Q3 2023. Marketing spend was up slightly in the quarter to $2.15 billion compared to $2.02 billion during the same period in 2023.
Chief financial officer Ewout Steenbergen said marketing expense in the quarter was 5% of gross bookings – 15 basis points lower than during the same period last year. That change came as a result of higher direct mix and higher returns on performance marketing investments. It was offset, he said, due to a higher spend in social media, among other factors.
Alternative accommodations and the connected trip
Fogel has been vocal in recent months about his ambitions to expand its alternative accommodations vertical – and he sees that as part of the connected trip mission.
“Our data shows that a portion of our bookers landing on our platform with an interest in a hotel will instead end up booking an alternative accommodation and vice versa,” Fogel said. “We believe that this shows in many cases, travelers are open to comparing hotel and alternative accommodation options when determining the best place to stay for their trip.”
Overall, room nights sold in the third quarter this year were 299 million compared to 276 million during the same period last year. Thirty-five percent of those nights came from alternative accommodation bookings, which grew by 14% year over year, Steenbergen said on the call.
“As we look ahead to the fourth quarter, we expect to continue to see healthy levels of room night growth as demand for travel remains resilient,” said Fogel.
Fogel isn’t the only member of the company’s executive team touting the importance of its growing alternative accommodations sector.
In September, Booking Holdings’ Steenbergen raised the subject during a session with Goldman Sachs at its Communacopia & Technology Conference.
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The company is also seeing growth in other travel verticals.
“We saw airline tickets booked on our platforms in the third quarter increase 39% driven by the continued growth of flight offerings by Booking.com and Agoda,” Steenbergen said. The count in Q3 2024 for airline tickets sold came to 13 million compared to 9 million in Q3 2023.
Generative AI being integrated across brands
Booking Holdings is putting AI technology to be at the center of its connected trip vision for each of its brands, including Booking.com, Priceline and Agoda.
“We believe [that] our proprietary data, along with our resources and scale, position us well to build compelling and personalized AI powered offerings for our travelers and partners,” Fogel said.
He pointed to examples including Booking.com’s AI trip planner and its use of AI in its customer service processes, Priceline’s AI travel assistant Penny, Agoda’s use of AI in its customer service efforts and Kayak’s AI travel planning tool, its use of AI to help with price comparison and more.
It’s exciting, Fogel said, to see the integration of AI across brands – and to see knowledge sharing between brands as that technology evolves.
“As we further incorporate this technology, we expect to see benefits in traveler and partner acquisition, retention and satisfaction,” said Fogel. “In addition, we expect it to improve operational efficiency, which would contribute to a deceleration of our fixed expense growth in the future.”
Booking Holdings quiet on regulatory affairs
Once again, Fogel was quiet about the challenges it is facing in Spain and Italy for anti-competitive practices. – and investors did not ask questions about the company’s ongoing regulation battles in Europe.
In May the European Commission designated Booking Holdings a gatekeeper in relation to Booking.com. On November 14 the company is expected to publish its compliance report, explaining changes it is making to comply with the Digital Markets Act.
