Tuesday, December 10, 2024
HomeTravelBooking Holdings touts alternative accommodation growth, success on social media

Booking Holdings touts alternative accommodation growth, success on social media


Booking Holdings CEO Glenn Fogel was decidedly upbeat in his
call to share the company’s financial results for the second quarter of 2024
with analysts, with no mention of the €413.24 million fine levied on the
company Monday
by a regulator in Spain – and no questions about it from
analysts.

Instead, Fogel touted many data positive data points – total
revenue of $5.9 billion up 7% year over year and gross travel bookings of $41.4
billion up 4%. The company’s adjusted EBITDA in Q2 was $1.9 billion, an increase of 7% from the same period in 2023.

One of the primary topics on the call – the company’s
alternative accommodation business, which now totals 7.8 million listings globally,
up about 11% compared with the second quarter of 2023.

“We continue to grow our alternative accommodations business
faster than our overall business,” said Ewout Steenbergen, Booking Holdings’ chief
financial officer.

“For our alternative accommodations at Booking.com, our
second quarter room night growth was 12%, and the global mix of room nights was
36%, which was up two percentage points from the second quarter of 2023.”

Fogel said it is “disappointing” that the company doesn’t
have more inventory in the United States, but he said it is an opportunity for
future growth. And while he did not name Expedia Group, Fogel reiterated that
he believes Booking.com has an advantage because it shows all types of
accommodations – hotels and alternative properties – in one platform.

“We are … continuing to build a product that gives a person
a reason to come and use it. I don’t  really care whether the customer uses a home
or a hotel or a villa or an igloo – I don’t care; I care they get what they want. That’s the
important thing,” he said.

“We don’t try to steer them. We try to make sure they have the
best tools to choose what they need. In the long run, that’s the way we’ll win
and create a great business.”

Social media success

Fogel also emphasized the company’s success with driving
leverage in its marketing efforts and specifically in its social media
marketing strategy at Booking.com, saying the brand has increased its spend on
social “in a disciplined manner” that is helping to reach travelers “on
platforms they are actively using.” 

And while he wouldn’t share specifics, he hinted this success
is a change from past efforts.

“I’m happy to see that it’s making some progress in using
social. We had a little problem getting that to work for us for many, many years. … Now we’re seeing it’s starting to work, getting some good ROIs, putting more
money into it … and I think we’ll continue to invest,” Fogel said.

Quote

We had a little problem getting that [social] to work for us for many, many years. … Now we’re seeing it’s starting to work, getting some good ROIs, putting more money into it … and I think we’ll continue to invest.

Glenn Fogel – Booking Holdings

“Another thing we saw, we don’t talk a lot about this and I
won’t get too specific, but we saw ourselves using money that we thought was
producing a good ROI, and it turned out it really wasn’t and we shut some of
these things down. … So some of our benefits in marketing leverage was coming
from that.”

The company’s total marketing spend in the second quarter of this year was $1.9
million, up from $1.8 million in the same period last year. 

And Fogel said the company continues to focus on bringing in
customers to book directly – and to book repeatedly.

“We are focused on successfully delivering a better
planning, booking and travel experience over time, which we believe will lead travelers
to choose to book directly and more frequently with us,” he said.

“At Booking.com, we are continuing to grow the number of total
active travelers, with repeat travelers growing at an even faster rate. In
terms of direct booking behavior, we are pleased to see that the direct booking
channel continues to grow faster than room nights acquired through paid marketing
channels.”

Fogel also said while the company is still building out its “connected
trip” capabilities – and he expects generative artificial intelligence will
help that functionality – it is seeing that customers who make bookings across
multiple verticals, for example booking a flight and then a hotel and a car
rental, have a higher repeat rate. 

When asked about opportunities to fuel new revenue growth
from advertising on its platforms, Steenbergen said that is a “very attractive”
opportunity. Advertising revenue in Q2 was $269 million – just 4.5% of total
revenue. 

“Today this line is mostly coming from Kayak and OpenTable,
but there are opportunities of course to think of more advertising income from
particularly the apps,” he said.

“But this is a very fine line. If you get too many advertisements
as a traveler on an app … this can also become quite annoying. Finding there
the optimal point is very important.”

Segment results

Airline ticketing, while a smaller percentage of the company’s overall business compared to accommodations, was up notably more – nearly 28% year over year, which Steenbergen said was a reflection of continued growth of the flight offerings on Booking.com and Agoda

Room nights booked in Q2 were up 7% year over year, down from 9% growth in Q1 and with a continued slowdown expected in Q3 to 3- to 5%.

Regionally in Q2, Steenbergen
said Europe and the United States had increases in the mid-single digits, Asia was up in the
mid-teens and the rest of the world was in the high single digits. The company
reported the mix of total room nights coming through direct channels was in the
mid-50% range.

When asked if he is concerned about the slowdown in room nights, Fogel said, “Our goal always is to gain share. Whether the market goes up or the market goes down, I can’t control demand, I can’t control economies. What I can control is how well we can provide value to the travelers and to the suppliers. As long as we continue to do that, as long as we continue to provide a reason that people should come to us as a traveler or use as a way to distribute travel as suppliers, we’ll continue to gain.”



Source link

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments

Translate »