Macroeconomic headwinds did little to slow the airspeed of Booking.com and its portfolio of brands as the largest online travel agency (OTA) saw a return to 2019 levels in flights and room nights and the company doubled down on its payments platform and “connected trip” concept.
On its third quarter 2022 earnings call Wednesday (Nov. 2), Booking Holdings President and CEO Glenn Fogel and CFO David Goulden reported the company’s strongest Q3 ever with Q3 revenue of $6.1 billion, up 20% from a year ago.
Its U.S. business showed strength, with Fogel noting that both Priceline and Booking.com “contributed to room night growth up almost 30% in the third quarter versus the third quarter of 2019.” The Q3 performance was driven in large part by unique active customers coming in above Q3 2019 levels, with “strong growth in reactivated customers who had not made a booking in over a year, as well as growth in repeat customers.”
Fogel called out the Booking.com payments platform as a core component for current and future growth. He said 40% of Q3 gross bookings were processed through its payment platform, calling it “our highest quarterly level ever” placing payments insights at the center of the connected trip concept that has yet to be formally articulated.
“We believe that the Booking.com payment platform helps deliver a more seamless and frictionless booking experience, which are important elements of our larger connected trip vision,” Fogel said, adding that, “We are extending our offering into travel verticals other than accommodations, and then we’ll work to link relevant travel components together to provide a more seamless, flexible consumer experience.”
Responding to an analyst’s question, Goulden said that with ongoing investments “we’re running the payments platform at about break-even” minus sales and marketing costs.
Mobile Apps and Alternative Accommodations Push
With direct bookings on its mobile apps hitting the highest level ever in Q3, Fogel said, “Our goal over time is to further increase our direct mix through several initiatives, including continued efforts to enhance the benefits of our Genius loyalty program, further building out our connection trip vision to increase engagement with our customers, and driving more and more customers to download and utilize the mobile app.”
The company has been talking up its connected trip concept for over a year, leveraging its ability to help travelers create customized travel experiences that include dining, attractions and other aspects. Fogel said ground transportation is now being added to connected trip.
Recalling the friendly war of words between Booking.com and Airbnb last year, Fogel said alternative accommodations is an area of ongoing focus for the OTA, as it expands its base of nontraditional suppliers and grows that component. Goulden said the global mix of alternative accommodations in Q3 was about 30%, “slightly higher than Q3 2019.”