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We’ve heard the doubts for several years: Are online travel agencies’ glory days, when revenue was growing 25 or 30 percent and room nights booked were jumping at similar clips, long-gone history?
In contrast to Expedia Group and TripAdvisor, which posted weak third quarters and saw their market caps sliced up on Thursday, Booking Holdings reported $2 billion in net income, a 10 percent leap. Its room night growth, however, was a not-spectacular 11 percent — the same as Expedia’s — and revenue growth clocked merely 4 percent growth to $5 billion.
Contrast Booking Holdings third-quarter performance to its third quarter of 2015, for example, when room nights grew 22 percent and revenue climbed 9.4 percent. In the third quarter of 2013 and 2014, respectively, room night growth stood at 35.6 percent and 26.7 percent, respectively.
Is today’s competition in online travel, with Airbnb breaking through and Google asserting itself ever-more intensely, too rigorous to replicate the robust growth of a few years ago?
Booking Holdings CEO Glenn Fogel has been touting “the connected trip” like an evangelist, and he argued Thursday in the company’s third-quarter earnings call that the resulting data trove, along with increased cooperation among his previously mostly siloed business units, might engender a “flywheel effect” that could enable Booking Holdings “to start cranking up again.”
Fogel said even the largest hotel chain doesn’t have full view of their customers like Booking Holdings does, in terms of the type of ground transportation, restaurant reservations, or attractions they want when traveling. “That’s the advantage that a full OTA (online travel agency) like us has,” Fogel said.
Flights and Data
Fogel said one of the advantages of a flight feature that Booking.com launched in Europe in partnership with eTraveli, along with a flight-booking debut in Asia, carried out by Booking Holding brands Agoda and Priceline, is the more complete view these products give of the customer.
Booking.com previously used sister brand Kayak to offer flights, but this was a referral business to airlines and didn’t have the full booking data that Booking.com now gets with an integrated flight-booking offering.
“So one of the benefits in something like this is you can offer connected-trip car rental or other types of ground transfers much more efficiently,” Fogel said.
Booking Holdings brands traditionally operated mostly independently, and the CEO, who several months ago took on an additional role as CEO of Booking.com, said he wants to see more collaboration.