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In this dynamic environment, I am confident that we are well-positioned to deploy this technology to further benefit our travelers and partners given our legacy of innovation, resources, proprietary data, the global nature of our business, and years of experience with AI. I'll speak more about the AI opportunity shortly. But first, I will briefly cover our financial highlights from the last quarter and the full year. Our fourth quarter room nights exceeded the high end of our prior expectations and grew 13% year over year.

The improvement in room night growth was seen across all our major regions, each of which grew by double digits in the quarter. The stronger-than-expected room night growth helped drive fourth quarter gross bookings growth of 17% and revenue growth of 14%, both above the high end of our prior guidance ranges. Adjusted EBITDA of $1.8 billion was 26% higher than the fourth quarter of 2023 and 12% above the high end of our prior guidance range, driven by revenue outperformance and lower-than-expected adjusted fixed opex. Finally, adjusted earnings per share in the quarter grew 30% year over year.

Looking back at the full year of 2024, I am proud of our achievements, including advancing our connected trip vision, further innovating our AI capabilities, expanding our merchant offerings, growing alternative accommodations, and enhancing the expanding our Genius loyalty program. Our achievements in these areas allowed us to deliver even more value to our travelers and supplier partners while also helping to drive our strong financial results for the year. For the full year, gross bookings of $166 billion increased 10% versus 2023, and revenue of $24 billion grew 11% year over year. We achieved these strong top-line results while growing our bottom line even faster with adjusted EBITDA of over $8 billion, increasing 17% year over year.

Finally, adjusted earnings per share was up 23% year over year, helped by the 7% reduction in our full year average share count versus last year. I would note that on a constant currency basis, our full year gross bookings, revenue, adjusted EBITDA, and adjusted EPS all grew about 1 percentage point faster than the reported growth rates I just mentioned. Our long-term ambition in a normalized travel environment continues to be to grow our annual constant currency gross bookings by at least 8%, to grow our constant currency revenue by at least 8%, and to grow our constant currency adjusted earnings per share by at least 15%, I'm proud to say that we exceeded these growth targets in 2024. At the start of 2025, we continue to see healthy demand for leisure travel globally, assuming another year of normalized growth for the travel industry.

We are targeting full year constant currency growth rates that would again deliver on our long-term growth ambition for gross bookings, revenue, and adjusted EPs. Given the importance of travel to consumers and the aspirations of people to experience the world, we remain confident in the long-term outlook for the travel industry and believe that we are well positioned to deliver attractive growth across our key metrics in the coming years. Ewout will provide further details on our fourth quarter results, our expectations for 2025, and our approach to capital returns in his remarks. At Booking Holdings, we have always been driven by innovation.

From the early days of the internet and online travel, to being one of the first employers of large-scale A/B testing, to the advent of the smartphone and consumer adoption of mobile apps, to using sophisticated machine learning models early in our business, we have consistently evolved to meet the needs of travelers and partners. We believe that compelling AI-powered offerings like a travel vertical-specific agent will play a central role in delivering even more seamless and personalized connected trip experience to travelers. We see the development and use of AI agents and those agents working with other AI agents as a potential way to more quickly bring together the different elements of travel into a truly connected offering on our platform. We are highly focused on the many opportunities with AI and will continue the sophisticated work already happening across our company to integrate generative AI into our offerings, which includes Booking.com's AI trip planner and Priceline's AI-powered travel assistant called Penny.

In addition, we're pleased to see the work being done at OpenTable with its use of Salesforce's Agentforce platform, while Agoda and Kayak are making their own generative AI advances. As we continue to incorporate this technology, we are confident that it will enhance our ability to attract and satisfy our travelers, as well as our partners, who have long relied on our technology advancements to help attract customers and grow their businesses. In addition, we believe generative AI has the potential to drive improvements in operational efficiency, which would contribute to a further deceleration of our fixed expense growth in 2025. Where the customer service, partner service, developer productivity, or other areas where we are finding more efficient ways of working, we are already seeing some early benefits, and we plan to continue to build on this.

We are also excited to be working with leading generative AI organizations on their agentic developments. These collaborations reflect our commitment to staying at the forefront of this rapidly developing field and are consistent with our long-standing approach to work with different sources of new customer traffic. And with our track record in this area, I am confident in our ability to create value for all participants in this new evolving economic landscape. We expect that agentic models will change the way some bookers discover and use our platforms.

And we believe that working with these models will be another attractive way for us to deliver unique value to our travelers and partners through competitive pricing, loyalty, benefits and rewards, offering up other travel products, high-quality customer service, and an easy and trusted payment process. Given the complexity expense and importance of travel to customers, it is critical to deliver value and to continue to be a trusted platform in order to have customers choose to make bookings with us. I'm encouraged to see that we continue to build trust with travelers as evidenced by our growing mix of direct bookings, which was in a mid-60s percentage of our B2C room nights in 2024. We will continue to learn how customers want to interact with all forms of gen AI, but I like how we are positioned.

I am excited about the changes and benefits that this technology is bringing to us now, and we expect we'll do even more so in the future. Now, focusing a bit more on our connected trip vision. We are making steady progress toward simplifying the planning, booking, and travel experience, making it more personalized, seamless, and enjoyable while delivering better value to our travelers and supplier partners. We saw connected trip transaction growth accelerate to over 45% year over year in the fourth quarter.

And these connected transactions represented a high single-digit percentage of Booking.com's total transactions. Flights are an important component in many of the connected trips that our travelers book. For the full year, our travelers booked almost 50 million airline tickets across our platforms, which increased 38% year over year and had a gross bookings value of $13.1 billion. We continue to see this vertical bring new customers to our platforms while delivering a more complete offering to our existing customers, making travel planning and booking easier for them and creating opportunities for us to provide more value to them.

And we believe that gen AI, coupled with our data and machine learning capabilities, will enable us to improve our supplier partners businesses, particularly the small- and medium-sized businesses who do not have easy access to these sophisticated technologies. Another foundational component of the connected trip vision is our expanding merchant offering at Booking.com. Merchant capabilities offer more flexibility for our travelers and partners while also unlocking the ability to merchandise across verticals. The mix of merchant gross bookings reached 59% of total gross bookings at Booking.com in 2024, an increase of about 9 percentage points year over year, which is higher than our expectations at the start of 2024.

We are pleased to see that processing transactions through Booking.com's merchant offering generated incremental contribution margin dollars in 2024, though, this was still a small percentage of our total adjusted EBITDA. We believe that we are still very early in our fintech journey and expect over the upcoming years to reduce the costs of transactions for our travelers and supplier partners while also contributing to our bottom line. We believe our Genius loyalty program at Booking.com also helps to connect more elements of travel as we extend this program beyond accommodations into other travel verticals. We believe the value of this program delivers will promote customer loyalty, frequency, and direct booking behavior.

We're encouraged to see more of our travelers moving into our higher Genius tiers of levels 2 and 3, which represent over 30% of our active travelers. And these travelers booked a mid-50s percentage of Booking.com's room nights in 2024. These Genius level 2 and 3 travelers have a meaningfully higher direct booking rate and a higher booking frequency than the rest of our travelers. We continue to drive more Genius benefits to our travelers in 2024, and we have seen steady growth in the share of connected trip transactions that receive Genius benefits.

We believe that all of the connected trip elements provide value to our customers, leading them to choose to book more frequently and directly with us. We are encouraged to see that the direct booking channel continues to grow faster than room nights acquired through paid marketing channels. Providing great supply choices for our travelers is another way we deliver a comprehensive planning and booking experience. And in one area, we are actively expanding our supply is alternative accommodations for alternative accommodations.

On alternative accommodations at Booking.com, we continue to see year-over-year growth with listings at the end of Q4 reaching 7.9 million, up about 8% from last year. More listings means more accommodation choices for our travelers, which we believe contributed to strong alternative accommodations room night growth of 19% in the fourth quarter, which was an acceleration from 14% growth in the third quarter. We were pleased to see alternative accommodation room night growth accelerate in the quarter across all of our regions. We remain committed to being a trusted and valuable partner to all of the accommodation properties on our platforms by delivering incremental travel demand and developing products and features designed to support the success of these businesses, the majority of which are small independents.

Now, I want to briefly discuss our transformation program, and Ewout will provide further details in his commentary. In November 2024, we announced our intention to implement certain organizational changes, including modernizing processes and systems, initiating an expected workforce reduction, optimizing procurement, and seeking real estate savings. We are in the process of reviewing some of these potential workforce reductions with works councils, employee representatives, and other organizations. While workforce reductions in some areas, along with investing in other areas, involve very difficult decisions, we believe that these steps are critical to improve organizational agility and drive greater operating efficiencies.

Reallocating resources across our strategic initiatives in a disciplined manner is a key requirement to maintain global competitiveness. Ultimately, we believe this will help drive stronger and more durable top-line and earnings growth over the long term. In conclusion, as I look back over 2024, I am proud of all of the hard work and excellent execution by our teams as they continued to advance our strategic initiatives while delivering strong financial results. These are exciting times for our industry, and I am confident in our company's position and ability to leverage generative AI technology to deliver an even better offering for our travelers and partners.

I will now turn the call over to our CFO, Ewout Steenbergen.

Ewout Steenbergen -- Chief Financial Officer

Thank you, Glenn, and good afternoon. I will now review our results for the fourth quarter and the full year of 2024 and provide our thoughts for the first quarter and full year of 2025. All growth rates are on a year-over-year basis. Information regarding reconciliation of non-GAAP results to GAAP results can be found in our earnings release.

We will be posting a summary earnings presentation, as well as our prepared remarks to the Booking Holdings investor relations website after the conclusion of the earnings call. Now, let's move to our fourth quarter and full year results. Our room nights in the fourth quarter grew 13%, which exceeded the high end of our guidance by 5 percentage points. The higher-than-expected room night growth was driven by stronger-than-expected performance across all our regions, with the largest impact coming from Europe.

Looking at our room nights growth by region in the fourth quarter, Europe was up low double digits, Asia was up mid-teens, rest of world was up about 20%, and the U.S. was up about 10%. We are encouraged by the progress we are making in enhancing the experience for our travelers and partners as we continue to advance our strategic initiatives and build toward our connected trip vision. This includes strengthening our offering through alternative accommodations growth, increasing the direct and mobile app mix of our bookings, expanding our Genius loyalty program, and growing our other travel verticals.

For our alternative accommodations at Booking.com, our fourth quarter room night growth accelerated to 19% and continued to outpace the overall business. The global mix of alternative accommodation room nights at Booking.com was 33%, which was up 1 percentage point from the fourth quarter of 2023. We continue to strengthen our direct relationships with our travelers and increase loyalty on our platforms. For the full year, the mix of our total room nights coming to us through the direct channel was in the mid-50% range and increased year over year.

When we exclude our B2B business, our full year B2C direct mix was in the mid-60% range, which is an improvement from the low 60% range in 2023. The mobile app makes of our total fourth quarter room nights was in the mid-50% range, which was up from the low-50% range in 2023. We continue to see that a significant majority of bookings received from our mobile apps come through the direct channel. For our Genius loyalty program, the mix of Booking.com room nights booked by travelers in the higher Genius tiers of levels 2 and 3 was in the mid-50% range in 2024, and this mix increased year over year.

In our other travel verticals, about 14 million airline tickets were booked across our platforms in the fourth quarter. Airline ticket growth in the fourth quarter was 52%, driven by the continued growth of our flight offerings at Booking.com and Agoda and accelerated from the 39% growth in the third quarter. Fourth quarter gross bookings increased 17% year over year and increased about 18% on a constant currency basis, which was approximately 5 percentage points higher than the 13% room night growth due to a few percentage points from higher flight bookings growth and an increase in constant currency accommodation ADRs of about 2%, The year-over-year ADR increase was impacted by a higher mix of room nights from Asia. Excluding regional mix, constant currency ADR were up about 3% versus the fourth quarter of 2023.

The increase in gross bookings exceeded the high end of our guidance by 8 percentage points due to stronger-than-expected room night growth, as well as stronger-than-expected constant currency accommodation ADRs and flight ticket growth, partially offset by about 1 percentage point of impact from changes in FX. Fourth quarter revenue of $5.5 billion grew 14% year over year, which exceeded the high end of our guidance by 5 percentage points. Constant currency revenue growth was about 15%. Revenue as a percentage of gross bookings of 14.7% was lower than expected due to impacts from timing and a higher mix of flight bookings.

The timing impact was driven by the acceleration in bookings in the fourth quarter, as well as a booking window that was more extended in the quarter than expected. Revenue as a percentage of gross bookings was also lower than the fourth quarter of 2023 due to impacts from timing and an increased mix of flights bookings, partially offset by increased revenues associated with payments. We expect the impact from timing in the fourth quarter will benefit our revenue in 2025. Marketing expense, which is a highly variable expense line, increased 10% year over year.

Marketing expense as a percentage of gross bookings was 4.2%, about 30 basis points better than the fourth quarter of 2023 due to lower brand marketing expense and higher direct mix, partially offset by higher spend in social media channels at attractive incremental ROIs. Fourth quarter sales and other expenses as a percentage of gross bookings was 2%, in line with last year, despite a higher merchant mix as higher payment expenses were offset by efficiencies in customer service. Adjusted fixed operating expenses were up 9% year over year, which was better than expected due primarily to lower IT and G&A expenses. Throughout this year, we have been very focused on carefully managing the growth of our fixed expenses.

Adjusted EBITDA of $1.8 billion grew 26% year over year and was 12% above the high end of our guidance range, largely driven by the higher revenue and also by the better-than-expected adjusted fixed operating expenses. Adjusted EBITDA margin of 33.8% in the fourth quarter was up versus last year by about 320 basis points due primarily to leverage from adjusted fixed operating expenses and marketing expenses. Adjusted EPS of $41.55 per share was up 30% and benefited from a 5% lower average share count than the fourth quarter of 2023. On a GAAP basis, net income was $1.1 billion in the fourth quarter and was impacted by a mark-to-market adjustment to the conversion option premium of our convertible notes due May 2025.

This was mostly offset by remeasurement gains on our euro bonds. Both items were excluded from our adjusted results. When looking at the full year, we are pleased to report that our 2024 room nights grew 9% year over year. On a regional basis, we saw full year room nights growth from Europe up high single digits, Asia was up mid-teens, rest of world was up high single digits, and the U.S.

was up mid-single digits. European bookers represented about half of the room nights booked in 2024. Asian bookers were about a quarter, and U.S. bookers were a low double digit percentage.

The growth in room nights helped drive increases in gross bookings, revenue, and adjusted EPS that were above our long term annual growth ambition. Our full year gross bookings and revenue increased 10% and 11%, respectively, and both growth rates were about 1 percentage point higher on a constant currency basis. Revenue as a percentage of gross bookings was 14.3% in 2024, which was up slightly versus 14.2% in 2023, due to a positive impact from increased revenues associated with payments, mostly offset by an increased mix of flights. Our underlying accommodation take rates continue to be stable year over year.

Marketing as a percentage of gross bookings in 2024 was 4.4%, down slightly from 4.5% in 2023, driven by higher direct mix, lower brand marketing expenses, and higher performance marketing ROIs, partially offset by higher spend in social media, which became a more significant channel for us in 2024. Our full year adjusted fixed operating expenses were up 8% versus 2023, which was better than our expectation for low to mid-teens growth at the start of 2024 and was a source of leverage due to many management actions taken throughout the year. Our full year adjusted EBITDA was more than $8 billion, which was up 17% year over year and up about 18% on a constant currency basis. We are proud to have generated $1.2 billion more adjusted EBITDA than in 2023, delivering profitable growth and expanding margins while investing in strategic initiatives.

Adjusted EBITDA margin was 35%, which was 170 basis points higher than our adjusted EBITDA margin in 2023 and ahead of our expectations at the start of the year. Our adjusted EBITDA margins, along with every other profit metric that we report, includes the impact of stock-based compensation expense as this is a very real cost of doing business. Our full year adjusted EPS was over $187 per share, which was up 23% year over year and up about 24% on a constant currency basis. Our full year average share count was 7% lower than in 2023 due to the impact of our share repurchase program.

Now, on to our cash and liquidity position. Our fourth quarter ending cash and investments balance of $16.7 billion was up versus our third quarter ending balance of $16.3 billion due to about $1.9 billion of debt raised in November and about $650 million in free cash flow generated in the quarter, partially offset by about $1.4 billion of capital return, including share repurchases and dividends. Free cash flow in the fourth quarter was pressured by about $825 million from changes in working capital, driven primarily by the seasonal reduction in our deferred merchant bookings balance. For the full year, we repurchased about $6 billion of stock and paid out $1.2 billion in quarterly cash dividends.

Since restarting our repurchase program in early 2022, we have repurchased almost $23 billion of stock, or 21% of our shares outstanding, at the start of 2022. We ended 2024 with about $7.7 billion remaining under our existing share repurchase authorization. As we look ahead, we remain focused on strategically investing in our business and returning capital to shareholders while maintaining our strong investment grade credit ratings. We are pleased to announce today that our board of directors approved a new $20 billion share repurchase authorization, along with a 10% increase to our quarterly cash dividend per share.

These actions reflect our confidence in our earnings power, strong free cash flow generation, and our ability to consistently return capital to shareholders through both share repurchases and dividends. Moving to our thoughts for the first quarter, we expect a comparison to the extra day in February 2024 to be about 1 percentage point headwind to our first quarter growth rates. Also, we expect a calendar shift of Easter from March in 2024 to April in 2025 to be a small tailwind to room nights and growth bookings growth and a larger headwind to revenue and profitability growth in the first quarter. We expect first quarter room night growth to be between 5% and 7%, which includes a slight benefit from the calendar shift of Easter into April.

We expect first quarter growth bookings to increase between 5% and 7%, which includes about 4 percentage points of impact from changes in FX, offset by about 2 percentage points of positive impact from higher flight ticket growth, about 1% higher constant currency accommodation ADR and a slight benefit from the calendar shift of Easter. We expect first quarter revenue growth to be between 2% and 4%, which includes a headwind of about 3 percentage points from changes in FX and about 3 percentage points from the calendar shift of Easter into April. We expect first quarter adjusted EBITDA to be between about $800 million and $850 million, down 5% year over year at the high end, which includes about 14 percentage points of year-over-year impact from the Easter shift and about 2 percentage points of impact from changes in FX. Note that, historically, the first quarter is our seasonally lowest EBITDA quarter for the year.

Normalizing for the impacts of Easter timing, changes in FX, and the leap year, our expectation for our first quarter gross bookings revenue and adjusted EBITDA is for low double-digit growth at the high end of each of those ranges. Turning to the full year 2025, we are targeting full year constant currency growth rates that would reach our long-term growth ambition of at least 8% growth for gross bookings and revenue and 15% growth for adjusted earnings per share. We believe we are well-positioned to achieve these levels of growth, given the investments we have made to build a stronger foundation for our business and a better product offering for our travelers and partners. At recent FX rates, we expect changes in FX will impact our reported growth rates by about 3 percentage points for gross bookings and revenue and by about 3.5 percentage points for adjusted EBITDA and adjusted EPS.

As a result, we expect full year reported gross bookings and revenue to increase mid single digits and, on a constant currency basis, to both increase high single digits. We expect to drive leverage in our marketing expenses. Additionally, we expect revenue to grow faster than adjusted fixed operating expenses, in line with our prior commitment for 2025, which we communicated at the start of last year. As a result, we expect adjusted EBITDA to grow a couple of percentage points faster than revenue and, on a constant currency basis, to increase low double digits.

We expect to continue to expand our adjusted EBITDA margins in 2025 and deliver margin growth of slightly below 100 basis points. We expect our full year adjusted EPS to grow low double digits and, on a constant currency basis, to grow mid-teens. Finally, we remain focused on managing our capital expenditures, and we expect that capex will be about 2% of revenue, similar to 2024. Turning to our new transformation program, which we announced in November, our intention is to implement certain organizational changes to reduce complexity and increase agility, which we estimate will ultimately produce an annual run rate cost reductions of approximately $400 million to $450 million versus our 2024 expense base.

And we expect the majority of these savings to be realized after 2025. By the end of 2024, we have already actioned over $35 million in run rate savings. We estimate the aggregate transformation cost that we will incur over the coming two to three years to be similar to the expected annual run rate savings. In order to provide transparency, we will report these costs separately in a transformation cost expense line, and we expect that certain of these costs will be excluded from our adjusted results.

Embedded in our full year 2025 guidance is about $150 million in cost savings related to the transformation program, the majority of which we expect to be in variable cost. Beyond the transformation program, we expect to drive additional efficiencies in our ongoing operations. With the capacity created by these savings and efficiencies, we are reinvesting about $170 million above our baseline investments in 2025 to support our strategic priorities for long-term value creation while still expanding our adjusted EBITDA margins for the year. These investments will be in areas such as progressing our gen AI capabilities, advancing our connected trip vision, and expanding our fintech offering.

We see the potential for these investments to contribute incremental revenue growth in future years and deliver attractive returns. In conclusion, we are pleased with our fourth quarter results and our outlook for the first quarter and the full year of 2025. We're excited about our long-term vision for the connected trip and enhancing our offering through technological advancements, such as generative AI. Thank you to all of my colleagues across the company for their amazing work and dedication to drive new product offerings, tech innovation, speed and agility, and deliver value to our shareholders, travelers, and partners.

With that, we will now take your questions. Operator, will you please open the lines?

Questions & Answers:

Operator

[Operator instructions] Your first question is from the line of Lee Horowitz with Deutsche Bank.

Lee Horowitz -- Analyst

Hi. Thanks for the question. Maybe starting with Glenn and generative AI. Thanks for the details on all the products you guys have rolling out there.

But I guess how do you contextualize the risks associated with, perhaps, greater competition from agentic platforms who have massive buckets of investment aimed at building functional AI agents that could circumvent, you know, listings on booking and go direct to hotels? Any more thoughts there would be helpful. And then, I have one follow-up, if I could.

Glenn D. Fogel -- President and Chief Executive Officer

Sure. Hi, Lee. Thanks for the question. I'm not surprised by it.

I've been here now -- as I mentioned, in my prepared remarks, I've been here almost 25 years. And it's been a rare time that somebody hasn't brought to me the thought that we were going to be disintermediated, that someone else is going to take away our business. At first, it was the hotels. We're going to build their websites, and we will go direct there.

There was -- Google was going to get rid of us, and etc., etc., etc. So, it does not surprise me that new technology comes out, and people are asking inappropriate question, "How is that going to impact your business? And are you still going to be able to achieve what you've been able to achieve for a quarter of a century?" And I would say, one of the great things about this company is our ability to evolve, adapt, use all of our resources, our technological knowledge, the tremendous ability of our people, our capital. In terms of agentic AI, one of the important things is data. It's something that I think about a lot, as do many, many people in the management team, of how can we change to make sure that we are the winner of these new technologies.

One of the things we mentioned about was coming up with a travel vertical-specific agent, having a model that's domain specific. There are a lot of different things we're working on. I'm not going to spell out all of the playbook and how we will make sure that we maintain this lead in the industry. But I recognize the question, and I say that we will be able to do it, not only by ourselves, but we also, as I mentioned, and we've talked about this in the past, that we're working with all of the major players in the valley and elsewhere, that we are working together to do things that would be better as togetherness instead of trying to do separately.

And I believe that past is a good example of being able to adapt and continue to go forward and create something that is even better than it was in the past. I'm incredibly excited about this new world of AI, generative AI, agentic AI models. All of these things are incredible opportunities for someone like us that has the ability to actually turn it into something that is better than it was before. So, I hear you, Lee.

I hear that question. It's not new. But I believe we will be a winner in this. Ewout, anything?

Lee Horowitz -- Analyst

Helpful, Glenn.

Ewout Steenbergen -- Chief Financial Officer

Yeah. Let me build on the answer that Glenn gave with one other perspective. As we all know, these developers of large language models are spending an incredible amount of capital expenditures. And they have choices.

One choice could be, are they trying to figure out the complexity of travel themselves? Or what is probably more likely is partnering with us as they are already doing today because we are able to give them very clear monetization opportunities, which, of course, is going to be very important in order to prove that there will be very sound returns on these very large capex numbers. So, really, the economic argument on top of all the arguments that Glenn has mentioned is very important from our perspective as well.

Lee Horowitz -- Analyst

Makes sense. Thanks. And maybe just a follow-up on alternative accommodations. I guess it's fairly clear you guys are a share gainer at this point.

I wonder if you could maybe unpack a bit more on a regional basis, where have you seen the biggest contributions to your sort of consistent teens growth rate in your alternative accommodations business in '24? What regions do, perhaps, expect to invest most behind in 25? And, you know, what do you think is resonating so strongly with the consumer to -- you know, that allows you guys to really outpace the competitors at this point?

Ewout Steenbergen -- Chief Financial Officer

Yeah, Lee, I think a brief answer on that question. The first part is we see higher growth in alternative accommodations in all the regions in the world compared to the traditional accommodations. And the second part of your question is why are we growing so fast? I think that has to do with the total proposition that we offer. Really great supply, expansion of the proposition in terms of accommodations that we can offer to travelers and, most importantly, that we have traditional accommodations and alternative accommodations together on the platform.

And travelers can compare and ultimately pick the best option in their particular situation. And what we're hearing back is that it's absolutely something that travelers like that we have that all combined on our platform. So, those are a couple of the reasons why we are growing faster, really, the quality of our platform and our product.

Glenn D. Fogel -- President and Chief Executive Officer

You know, that's a good opportunity to do a shout out to the team who has done such wonderful work for so long now. I mean, 14 out of the last 15 quarters, to be the leader in the space, and it's not because we're small. I mean, our homes area in terms of a room night number and you compare it to the leader, we're more than two-thirds. Potentially, a lot more than two-thirds, you don't really know because the No.

1 puts their experiences and the room nights together. So -- but it's at least two-thirds, so it's not like we're tiny. So, it's really just wonderful, the incredible ability of us to come from, what was something that a lot of people didn't think we'd be able to do and achieve something that is now a competitive product.

Lee Horowitz -- Analyst

Helpful. Thank you both.

Operator

Your next question is from the line of Mark Mahaney with Evercore ISI.

Mark Mahaney -- Analyst

OK, let's see, I'd like to ask about airlines and then Operator. On the airlines, that growth you had, you talked about it a little bit on the call, but that's the -- I think the fastest growth you've had in, I don't know, year and a half or something like that. So, maybe just talk about the growth going forward, like, how much higher do you think the attach rate could be or how many more markets is the -- do you still have the airline offering to roll out in? Like, just give us a sense of what inning we are in terms of the growth of airline as a product in the booking portfolio. And then, could you talk a little bit about the Operator experience you have? Anything you'd disclose on the economics? How did that partnership come together? And what do you expect to get out of that going forward? Thank you very much.

Glenn D. Fogel -- President and Chief Executive Officer

Sure. Hi, Mark. It's Glenn. Yeah, very excited about those flight numbers.

I think 52% growth, and it was an acceleration from the previous quarter, 39. I look back, it was even acceleration from the quarter before. So, I think, you know, it's really nice to see that trend. I do not think anybody should be projecting in a linear way that it's just going to continue to increase and accelerate, accelerate, accelerate.

That, obviously, is not going to happen. But I do believe that we will continue to maintain a strong growth in our flight business. And it's not just by adding more markets. I don't think there's a lot to be done in that area.

It's going to do a lot. What it is, is providing a better service to the traveler. So, the traveler wants to use us versus all the other ways they can do a flight. And that includes bringing it together part of our connected trip, giving all the other types of value that we can provide.

And it's not just giving them a hotel, and it's not just giving them, perhaps, a discount in terms of a ground transportation from the airport or insurance or attraction. It's creating something that really is different, something that provides a value that the traveler has always wanted. And that is that travel agent in your pocket, and that travel agent in your pocket lives in the phone. And the idea is that this connected trip, which many people when they start their travel planning starts with a flight.

So, we want to get them in, but once they're in, give them a lot more value. Then, of course, they're telling other people that this is something new and actually a much better way to do it. That's the idea, and that's how we maintain a strong growth rate in all of our verticals, not just flights. And that's what we're going to do.

Now, in terms of Operator, very, very early. I don't think we're going to disclose any economics if I'll be perfectly honest with you. As you may -- as you may not be surprised, I don't think there'd be much to talk about in that area right now. This is an area, though, that is just starting and just learning how it works.

What is the purpose of it? It's working with a very respected partner who knows a lot about AI. We know a lot about the travel industry. How can we do things together that would be mutually beneficial to both of us? And we'll learn. Look, you go way back -- and again, I'm going back in the past.

I look at our site from 1999 and 2000, my God, it was horrible. It's amazing anybody bought anything back then. And now, this thing, too, it's not the easiest. I've used it.

It's a little clunky and stuff, but it will get better and will improve and build upon it. Got to start somewhere, and we already started.

Mark Mahaney -- Analyst

All right. Thanks, Glenn.

Operator

Your next question is from the line of Brian Nowak with Morgan Stanley.

Brian Nowak -- Analyst

Great. Thanks for taking my questions. Glenn, I have one for agentic for you. Just want to ask a question.

So, when you think about partnering with some of these other players like Operator or maybe Gemini or any of the emerging potential next-generation travel players, you give them access to your differentiated supply. How do you sort of think about managing the long-term risk that a larger percentage of people and travelers could start using those products the next three, five, 10 years as opposed to going direct to you, and it potentially has a negative impact on your overall mix between paid and direct traffic?

Glenn D. Fogel -- President and Chief Executive Officer

Well, that is obviously something that people think about when you're putting together an agreement of any type with anyone in terms of what you're going to maintain proprietary to yourself, what you're going to be able to share with someone else to use, how the economic powers between the parties is going to work. Lots of things to still work out. That is something that's going to be a negotiation with a lot of the different parties involved in this, and we'll see how it plays out. I will state the obvious that we are aware of the issues that you bring up.

I do believe there are going to be different ways to come together so that different parties in this new world of agentic AI, in that ecosystem, there will be ways for lots of players to do well. And I'm just pleased to be in the position we are with all the data we have, with the resources we have, the people we have, the worldwide network of consumers who trust us, which is also a very big deal. People, when they're putting together travel for a lot of people, it's a lot of money to them, and they don't do it often enough that they're just willing to just throw it at anybody. They want to do it with somebody they trust.

So, we have the advantage of having a brand that is trusted. All those things together help us in terms of the discussions with other players who have other expertise to bring, and I am positive that we are in a very, very good position for this going forward. And, Ewout, you may have some more.

Ewout Steenbergen -- Chief Financial Officer

Yeah. And, Brian, one other perspective to think of is the following. So, with multiple agents that are going to be developed, and we will see many, many agents by many developers over over time, horizontal agents, vertical agents, very task-specific agents, for us, that actually, from an economic perspective, will create an advantage because think about the cost of acquisition. There are many parties and many providers working together with them that will give us some advantage in terms of cost of acquisition that will come down from where we are today.

So, actually, with all the partnerships that are building, all the relationships, plus our own travel-specific vertical agents that we are developing over time, we believe that actually this could help us very much from an overall economics perspective for the company.

Brian Nowak -- Analyst

Got it. Thank you both.

Operator

Your next question is from the line of Kevin Kopelman with TD Cowen.

Kevin Kopelman -- Analyst

Great. Thanks a lot. Could you give us your updated thoughts on your interest or lack of interest in larger M&A deals, given recent activity in the space? Thanks.

Glenn D. Fogel -- President and Chief Executive Officer

Well, as you know, we don't discuss about M&A except when we have a transaction to discuss, and we'll just keep it that way. I said in every single of the 33 conference calls, this is the same one, same answers, we don't comment on M&A.

Kevin Kopelman -- Analyst

OK, fair enough. Can I ask about ad costs. You mentioned that you're expecting leverage this year. Can you give us more color there on the trends you're seeing? Is it safe to assume that direct traffic is expected to continue to go up? And if you could touch on what you're doing with your brand spend, you mentioned it was down, and also merchandising.

Thanks.

Ewout Steenbergen -- Chief Financial Officer

Absolutely, Kevin. So, we expect marketing leverage to continue for the full year 2025, driven by the same trends that you have seen in the more recent past. More direct traffic is clearly a benefit overall, higher performance marketing ROIs that we are able to achieve based on all the optimization algorithms that we are running and where the company has built so much expertise over time. And then, I would very much like to call out also how excited we are about the development of social media channels.

This is a big area of investment for us. We have invested a lot of our technology in this space and expertise working together with some of the large social media channels, particularly Meta, where we have built a very close relationship. I don't want to say too much about that from a competitive perspective, but this is very much a bespoke model where both teams from both companies have built a very effective way how we can monetize their leads and our leads because this is really based on both remarketing and prospecting that comes from both sides, as well as very personalized creative content in terms of feeds. So, incremental ROIs that we can measure with respect to social media channels is something that is new, but we have been able to find out, figure out how to do that.

So, therefore, we are very confident that this is not ultimately a traveler that would have booked anyhow with us, but it's really an incremental traveler that comes to us, and, therefore, we're spending much more at attractive incremental ROI. So, the combination of all of that means that we are very positive and enthusiastic about the outlook with respect to continued marketing leverage for the company.

Kevin Kopelman -- Analyst

Great. Thank you so much.

Operator

Your next question is from the line of Stephen -- your next question is from Stephen Ju with UBS.

Stephen Ju -- UBS -- Analyst

Hey, great. Thank you. So, Glenn, I wanted to dig in a little bit more on your thoughts on AI. I think I heard in your prepared remarks about products that can help drive more revenue and, on the other side, other products that can help in cost avoidance.

So, as we talk to other companies, it seems like the cost avoidance part seems easier to deliver. And things that might help revenue may take some more effort. So, you know, where do you see yourself positioned in terms of when we can start seeing, I guess, noticeable impact to either the top or bottom line? Thanks.

Glenn D. Fogel -- President and Chief Executive Officer

That's a very good question, and I'm going to talk a little bit. I'm going to let Ewout what he wants to disclose. Here's what we're already seeing in terms of some of the benefits. But let's start with the cost avoidance part.

You know, the last call, we talked a little bit about what we were seeing in benefits in customer service. Clearly, an area where there's great opportunity for anybody who has a large customer service operation to achieve significant savings, even something as simple as a CS agent that has to do a summarization at the end of the call. Well, right away, you have something that can do it automatically, thereby making the amount of time the agent is spending, not talking to a customer but summarizing goes away, simple example. But there's so many about that.

And then, think not just in terms of the cost there, but this is an important one is, there are a few things that are as frustrating is having to wait on hold to get in touch with a customer service agent. The wonderful thing, as we develop AI capabilities and customer services, we won't be waiting for somebody to answer the phone. The agent will be answering the phone. In fact, one of the things that we mentioned in the call, it's not a big thing for our income statement, but I like seeing it, is in OpenTable and the interactions they're doing with sales agent sales -- Salesforce in their agent ware and coming up with some things that are very helpful in that area.

So, that's just one area. Of course, you have the coding efficiencies that everybody talks about. You get, hopefully, some significant benefits down the road as our developers are able to do a lot more work in the same amount of time. And they're all different areas.

So, I'm not sure Ewout's going to want to talk in terms of numbers for that. I'll let him say how much he wants to disclose or not. On the revenue side, yeah, it is going to be a little slower in showing up in terms of increases, but it's great to see what we're already doing. And again, it's the benefit of having the knowledge, the expertise, and the resources to do this.

I mean, one of the things when you're not involved in the industry is you're not as knowledgeable about the complexity of travel. It's not just simply you press a button and you get a booking. I mean, even things as simple as the regulatory world that you have to deal with to make sure if you're using AI, it's not only the travel rules you have to worry about, you got to worry about the legal things with AI. For example, in Europe, there's the EU AI act.

So, you've got to make sure anything you're building is going to fit that. And then, it's -- obviously, it's the context, awareness, and data knowledge of travel. The great thing is having the incredible amount of data we have really understanding what works, what doesn't work, and being able to put that into a database that can then be used by a generative AI model. That's an advantage.

I can go on and on, I won't use up all the time, but I just see, yeah, it's going to be a little slower, perhaps, than the cost savings, but that revenue opportunity is huge. And, Ewout, I don't know what you want to disclose.

Ewout Steenbergen -- Chief Financial Officer

Stephen, I would like actually more to point at actual numbers than to speak about some percentage of savings that sometimes is being mentioned. But then, of course, the question is where does it actually show up in the results. So, let me first point you to our sales and other expenses for the fourth quarter. What you see here is that those were flat as a percentage of growth bookings, around 2% of growth bookings, compared to the fourth quarter of 2023.

Underneath what is happening there is with the growth of our deferred -- of our merchant bookings, we have higher payment-related expenses, but that is offset by efficiencies in our customer service. So, the fact that we have basically flat SNO expenses as a percentage of gross bookings despite the growing merchant business is a clear point in our results that has already seen the advantage of generative AI in terms of actual efficiencies. The other example that I can give is that in terms of the transformation program savings in-year 2025 of $150 million, a meaningful part of that is already coming from efficiencies that we will be able to achieve with generative AI in multiple parts of the company. So, it is already clearly showing up in our numbers in the fourth quarter, as well as the savings target that we have for 2025.

Stephen Ju -- UBS -- Analyst

Thank you.

Operator

Our final question of the day will come from the line of Justin Post with Bank of America.

Justin Post -- Analyst

Great. Thanks for taking my question. Glenn, I'd like to comment a little bit more on the merchant mix shift. Obviously, way faster growth for merchant bookings.

Can you talk a little bit about how that might translate to higher margins or better loyalty or better repeat rates and just how that's kind of transforming your business over time? And then, I'd love to ask about room nights. Obviously, some decel in Q1, but you seem very confident on the year. So, what were some of those nights borrowed in Q4? And then, maybe talk about summer booking pacings, if you can. Thank you.

Glenn D. Fogel -- President and Chief Executive Officer

Sure, Justin, I'll take the first, and then I'll let Ewout take the second. You know, on the first one, when we first started the merchant program at Booking.com, there was a lot of question of why are we getting out of an agency model that seems so simple, so clean, and why are you doing that. And one of the key things, right, from the get-go was to achieve the connected vision. We need to have that foundational platform in payments, very, very important.

We have that now. And obviously, as the numbers you just mentioned, there continue to increase in terms of the share of the total amount of our bookings. That's very important in terms of being able to give benefits to our customers is also very important for giving them the way they want to pay. Some of them want to pay in one way, some want to pay in another way.

A lot of people who aren't international don't understand that a lot of people don't use Visa, they don't use Mastercard. They have their own way to pay. And the traveler on the other side -- the supplier on the other side doesn't really want to take the payment the way the traveler wants to give it. So, for example, the easy example is out of China.

Somebody is using Alipay. The small hotel in France doesn't take Alipay. Fortunately, we, as that person in the middle with that merchant payment, we can do that. So, it makes this a win-win for everybody.

And it can be less expensive given the FX charges, the interchange charges, etc. There's money to be made for all of us. It's cheaper for the traveler, it's cheaper for the supplier, and we can make money in the middle. That's one example.

But then, you come up with new products, new things that we talked about. Ewout, you know, has mentioned the pay in your own currency type thing. There are lots of different things. Here's the thing.

So, we said we did $166 billion of total transaction value in 2024. Now, not all of that was done on payments, it was agency, but it's continued to grow up as our total value volume continues to increase. The question is, what percentage of that, how many basis points, what should we be able to get out of that as profit? And I'll let everybody else make their own guesses and estimates on that. But there's a lot of way, there's a lot of way to make some very good returns at the same time, providing better services to both sides of the marketplace.

And, Ewout, you can forward on the -- on his room nights question.

Ewout Steenbergen -- Chief Financial Officer

Justin, let me first zoom out a little bit for our guidance with respect to the first quarter, and then I will give you a more specific answer with respect to room nights. So, first, let me point out, for the first quarter, normalized. And it means normalized for the impacts of Easter, FX, and leap year. We are having guidance that shows low double-digit growth with respect to growth, bookings, revenue, and EBITDA, low double-digit growth.

So, specifically on room nights, there are a few elements why it's 5% to 7% Looking first back to the fourth quarter of 2024, the comps were a little bit easier in the fourth quarter, particularly due to the effect of the October 7th attacks in 2023. So, that drove a little bit of the higher growth and also the expansion of the booking window. And then, we have, for the first quarter of this year, a little bit of headwind from the impact of the leap year compared to a year ago. So, those are a couple of specific elements why we are guiding to 5% to 7%.

But as I said, normalized, we think it's going to be a really good quarter. And again, for the full year guidance, what you see is on a constant currency basis. We're hitting our long-term algorithm for the company. So, coming out of a, I think, fantastic quarter for the company with a lot of momentum, we're very encouraged about the outlook for the year, and we see a lot of underlying healthy trends for the company.

Justin Post -- Analyst

Great. Thank you.

Operator

I would now hand today's call back over to --

Glenn D. Fogel -- President and Chief Executive Officer

All right, so -- thank you. So, I just want to say I thank our partners, our customers, our dedicated employees, and our stockholders. They are truly grateful for everyone's support as we work toward realizing our company's long-term vision. Thank you very much, and good night.

Operator

This concludes today's call. Thank you for joining. [Operator signoff]

Duration: 0 minutes

Call participants:

Glenn D. Fogel -- President and Chief Executive Officer

Ewout Steenbergen -- Chief Financial Officer

Lee Horowitz -- Analyst

Glenn Fogel -- President and Chief Executive Officer

Mark Mahaney -- Analyst

Brian Nowak -- Analyst

Kevin Kopelman -- Analyst

Stephen Ju -- UBS -- Analyst

Justin Post -- Analyst

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Booking Holdings (BKNG) Q4 2024 Earnings Call Transcript was originally published by The Motley Fool