The leisure travel industry is alive and well at Booking Holdings. The parent company of Priceline, Kayak, Booking.com and other connected economy hospitality brands reported record fourth quarter earnings on Thursday (Feb. 22).
Perhaps more importantly, it sounded an optimistic tone for Q1 and the balance of 2024.
“Our ambition going forward in a normalized (pre-pandemic) growth environment for the travel industry is to continue to grow for closed bookings, revenue and earnings per share faster than we did in 2019,” CEO Glenn Fogel told the company’s earnings call audience.
“We are confident we will achieve these objectives because we’ve invested in building a stronger business and better product offerings for our travelers and partners than we had back then. We can see this in many areas,” Fogel added.
Booking compares its results not only from quarter to quarter and year to year, but to 2019 when the company was operating in what it called a normal hospitality environment.
The results showed travel bookings at $31.7 billion in Q4, an increase of 16% over 2022. Room nights booked across all its properties rose 9%. The company achieved a record 1 billion room nights booked in 2023, reflecting the recovery in the leisure travel industry. The company’s total revenues for the year increased by 25% to $21.4 billion, driven by a 24% increase in gross travel bookings to $150.6 billion.
The one blight against the performance was a fourth quarter net income drop of by 82% to $222 million, caused by non-recurring losses from a pension case in the U.K. and a pending anti-competition settlement in Spain.
Fogel was optimistic about Booking’s prospects for the rest of 2024 as the company estimated a 9% growth rate. Despite setback from the conflict in the Middle East, he said he sees consumers continuing to support growth, based on insights into advanced bookings for the summer tourism season.
Fogel also discussed an initiative that is expected to contribute to that growth.
The company hopes to be a super travel app with “Connected Trips,” a new program. It aims to be a one-stop solution offering package trips, flights and access to attractions, all booked through the Booking.com website or mobile app.
Fogel said the company continues to see a growing percentage of transactions through the connected program, but it still only makes up a small percentage of total business. He also said there’s evidence that connected customers return more frequently and experiment with more travel verticals.
“We are continuing to strengthen the direct relationship with our travelers,” he told analysts on the earnings call. “We remain confident in our long-term outlook for the travel industry, which we believe will grow faster than GDP growth across our core markets … We are positive about our future and believe we are well positioned to deliver attractive growth across our key metrics in the coming years.”
And as most earnings calls have noted during this Q4 reporting season, artificial intelligence (AI) played a major role in the company’s future plans.
Earlier this month, Booking Holdings announced major upgrades to Penny, its AI-powered travel assistant for Priceline.
The company said it had added more than 30 new features to streamline the travel planning and booking process. The upgraded Trip Intelligence suite uses real-world conditions and proprietary marketplace intelligence accumulated from Priceline’s millions of customers.
The company said the response has been positive. It estimated that travelers who used Penny saved an average of nearly ten minutes per trip compared to those who called customer support. Priceline plans to deploy Penny across all categories: hotel, flights, car rental and vacation packages.
“This is a clear example of the power to iterate and enhance our AI-powered products,” Fogel said. “As we learn more through user interactions, we continue to see encouraging signs that it helps lower customer service contact leads across travel verticals, and we believe it improves the customer experience beyond improving customer service contact rates.
“We believe that over time, we can leverage generative AI technology to help make our customer service agents more efficient across our entire organization,” he added.
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