Booking Forecasts Record Sales, Confirming Strength in Travel

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(Bloomberg) — Booking Holdings Inc. reported bookings in the second quarter that topped analysts’ estimates and forecast record revenue in the current period, confirming a strong start to what was expected to be a blowout summer travel season. The shares jumped 4.8% in extended trading.

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Gross bookings, which represent the total value of all travel services booked by customers, excluding cancellations, totaled $34.55 billion, the company said in a statement Wednesday. That compared with analysts’ estimates of $32.8 billion. Total sales nearly doubled to $4.29 billion, less than analysts’ average projection for $4.33 billion, according to data compiled by Bloomberg. 

“Looking forward, we expect record Q3 revenue and are very busy working with our customers and partners to help enable an extremely busy summer travel season, Chief Executive Officer Glenn Fogel said.

Fogel and his peers from Airbnb Inc. and Expedia Holdings Inc. had been anticipating one of the hottest summer seasons ever after two years of pent-up demand following Covid-19 restrictions. But chaos in the travel market, from canceled flights to lost luggage and soaring prices, has injected some doubt about the outlook for the rest of the year. Airbnb reported record revenue in the second quarter and the highest-ever profit for that period in addition to predicting record sales again in the current quarter, but it was punished by the market for a forecast of nights and experiences booked in the third quarter that fell short of analysts high expectations.

Travel Time | Booking's total transactions soared in the second quarter © Bloomberg Travel Time | Booking’s total transactions soared in the second quarter

The travel industry has had to navigate two years of uncertainty marked by ongoing Covid surges, rising costs for fuel, and the war in Ukraine. The latest hurdle is a surging dollar, which has appreciated significantly against all major currencies just as the peak season was getting underway. Norwalk, Connecticut-based Booking, which gets almost 90% of its sales from overseas, is more vulnerable to currency fluctuations than its rivals. 

Booking, the biggest US online travel company, also owns flight aggregator Kayak and travel booking site Priceline, as well as an alternative accommodations platform. Signs that travel is picking up were evident in Visa Inc.’s results, which showed a 28% surge in cross-border payments, beating the company’s own estimates. Hotels are on the upswing too, with Hilton Worldwide Holdings Inc. raising its full-year outlook, casting away doubts about weak consumer sentiment impeding travel plans.  

Despite evidence of strong demand throughout the year, the online travel companies have seen their shares slump. Booking is down 18% this year while Expedia has slumped 42% and Airbnb has lost 31%.

Booking reported net income of $857 million, compared with a loss of $167 million a year earlier. Adjusted earnings per share were $19.08 compared with analysts’ estimates of $17.52. 

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