The company’s third-quarter results show that it is expanding faster than Airbnb, the biggest player in the alternative accommodation business, with strong performances in both regional and global markets like Asia and Europe for more than three years.
Booking.com’s strategy of offering both hotel rooms and alternative accommodation on one platform is proving popular with travellers and has made it more successful than its largest competitor in the past 13 of 14 quarters, Ewout Steenbergen, executive vice president and chief financial officer of Booking Holdings, said exclusively to Mint.
“Most other players are offering either/or, and we are offering it together. This is really something travellers like,” he said. “Booking.com has consistently grown faster in room nights than the largest competitor in alternative accommodations business and is already about two-thirds the size globally of the number one player in this segment in terms of room nights sold.”
When larger families or groups of friends book or when travellers look for connected hotel rooms, they also see an alternative to hotels and end up seeing that as an option to book, said Steenbergen, who is in India this week.
Around the world, Booking.com offered about 3.9 million properties on its website as of September 30, consisting of over 3.4 million alternative accommodation properties (including homes, apartments and other unique places to stay) and 475,000 hotels, motels, and resorts, an increase from 3.3 million total properties a year earlier.
Booking Holdings said in its Q3 report that more alternative accommodation properties continued to connect to its platform, with listings at the end of September reaching 7.9 million, up about 10% from last year. This, it said, possibly contributed to strong alternative accommodation room night growth of 14% in Q3.
Properties represent a set of rooms, while listings refer to the rooms within a property.
Integration scope
The company’s presence in Asia and Europe was the strongest in Q3, with Booking Holdings reporting significant double-digit growth in Asian regions. While the US market business still remains slightly behind, Steenbergen said growth there is still positive, outpacing the broader market trend.
“In the US, business travel has grown a lot, but consumer travel is growing at a less significant pace,” he said.
In the third quarter, there was substantial growth in the company’s other travel sectors. The flight booking business increased 39%, with 13 million tickets sold, while rental cars grew by 16%. Steenbergen said there is an opportunity for the company to develop a connected travel platform that integrates flights, accommodation and rental cars.
Across different parts of the world, he said airline prices have declined in double digits over the past two to three quarters, and rental car prices have also decreased in various regions. Hotel prices rose more modestly this year in regions like Asia, with the exception of the US, where hotel prices were little changed.
He said Asia is expected to maintain strong growth over the next few decades. India is of strategic importance, with the market’s potential heralded by factors such as increased air traffic and rising disposable incomes.
“India is a very large strategic opportunity for us at Agoda and Booking,” Steenbergen said.
Tech and talent
In Europe, growth picked up in August following a slowdown in July that was attributed to global events. While the overall European market remains stable, growth resumed in the latter part of the quarter.
The company is also investing in talent and technology. Steenbergen said Booking Holdings has established a “centre of excellence” in Bengaluru with a $250 million investment plan over five years. This initiative is aimed at supporting global operations and tapping local talent.
Steenbergen said the potential of generative AI to enhance the customer experience is still in its nascent stages but when it comes through, will help travellers a lot. The company is testing various tools, and he anticipates that generative AI will play a significant role in personalising travel experiences in the next one to three years, helping travellers to plan entire trips tailored to their preferences.
Booking Holdings reported third-quarter net income of $2.5 billion, little changed from a year earlier, while revenue increased 9% to $8 billion.
