Booking Revenue Beats Estimates on Summer Lift in Travel
(Bloomberg) -- Booking Holdings Inc. reported quarterly revenue that was better than analysts’ estimates, buoyed by cost-cutting and increased summer travel that offered a respite before Covid-19 cases started surging again.
Chief Executive Officer Glenn Fogel warned that a new wave of the pandemic will continue to weigh on the online travel giant’s prospects.
Revenue fell 48% to $2.6 billion in the third quarter, the Norwalk, Connecticut-based company said in a statement Thursday. Analysts had projected $2.54 billion, according to data compiled by Bloomberg. That was also an improvement from a record 84% plunge in the second quarter.
Booking reported a 43% decline in the number of room-night reservations, compared with a year earlier. Gross travel bookings, which reflect all travel services booked by customers, fell 47% to $13.4 billion during the period.
“We were pleased to see positive third-quarter results, which we believe benefited greatly from some lifting of government lock-downs and the release of pent-up demand created by the almost complete cessation of travel during parts of the second quarter,” Fogel said in the statement. “However, Covid-19 case counts are now rising steeply in many parts of the world with corresponding increases in lock-downs and re-imposed travel restrictions that will continue to impact travel in the near-term.”
Newly booked room nights were down about 50% from a year earlier. The recent increase in Covid-19 cases in Europe and the U.S., coupled with cold weather and travel restrictions “will likely result in the second dip being U-shaped and lasting until the early spring of 2021,” Chief Financial Officer David Goulden said on a conference call.
Booking, which runs five major travel brands including Priceline and Kayak, has been hammered by Covid-19. The company cut a quarter of the workforce at its main Booking.com business and slashed advertising spending, in addition to applying for government aid. Competitors including TripAdvisor Inc. and Airbnb Inc. also cut jobs amid the pandemic’s squeeze on travel.
Booking’s silver lining has been growth in domestic stays. The shift to remote work and a drop-off in business travel has fueled demand for alternative accommodations, or vacation rentals, as travelers opt for nearby “staycations.”
Still, Booking’s significant exposure to overseas markets -- which comprise the vast majority of its revenue -- could weigh on any recovery as European governments reinstate restrictions.
The company’s outlook is “less certain amid rising cases” of Covid-19 as it “may hurt near-term travel demand”, according to Bloomberg Intelligence analyst Matthew Martino.
Third-quarter profit, excluding some costs, fell 74% to $504 million or $12.27 a share. That missed the $14.58 a share analysts projected, according to data compiled by Bloomberg.
Booking shares declined about 1% in extended trading, after closing at $1,768.31 in New York. The stock has fallen 14% this year.
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