Booking Holdings Stock

Booking Holdings Inc. provides consumers, travel service providers, and restaurants with leading travel and restaurant online reservation and related services.

The company offers its services through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable, which allow consumers to: book a broad array of accommodations (including hotels, motels, resorts, homes, apartments, bed and breakfasts, hostels, and other alternative and traditional accommodations properties) and a flight to their destinations; make a car rental reservation or arrange for an airport taxi; make a dinner reservation; or book a vacation package, tour, activity, or cruise. Consumers can also use the company's meta-search services to easily compare travel reservation information, such as flight, hotel, and rental car reservations from hundreds of online travel platforms at once. In addition, the company offers other services to consumers, travel service providers and restaurants, such as travel-related insurance products and restaurant management services.

Business Model

The company derives substantially all of its revenues from providing online travel reservation services, which facilitate online travel purchases between travel service providers and travelers (which the company generally refers to as 'partners' and 'consumers,' respectively). The company also earns revenues from advertising services, restaurant reservations, and various other services, such as travel-related insurance and restaurant management services.

The company classifies its revenues as 'merchant' revenues, 'agency' revenues, and 'advertising and other' revenues.

Merchant revenues are derived from transactions where the company facilitates payments from travelers for the services provided, generally at the time of booking. Merchant revenues include travel reservation commissions and transaction net revenues (i.e., the amount charged to travelers, including the impact of merchandising, less the amount owed to travel service providers); credit card processing rebates and customer processing fees; and ancillary fees, including travel-related insurance revenues. The majority of the company's merchant revenue is from Booking.com's accommodation reservations.

Agency revenues are derived from travel-related transactions where the company does not facilitate payments from travelers for the services provided. Agency revenues consist almost entirely of travel reservation commissions from the company's reservation services. Substantially all of its agency revenue is from Booking.com's accommodation reservations.

Advertising and other revenues are derived primarily from (a) revenues earned by KAYAK for sending referrals to online travel companies ('OTCs') and travel service providers and for advertising placements on its platforms; and (b) revenues earned by OpenTable for its restaurant reservation services and subscription fees for restaurant management services.

Strategy

The company's strategies include making it easy for people to find, book, pay for, and experience travel; providing consumers with the most comprehensive choices and value on any device; offering platforms, tools, and insights to the company's business partners to help them be successful; and operating the company's business sustainably and supporting sustainable travel choices by the company's consumers and partners.

The company focuses on relentless innovation and execution and a commitment to serve both consumers and partners with unmatched service and best-in-class technology.

The key elements of the company's strategies are to provide the best consumer experience; partner with travel service providers and restaurants; operate multiple brands; and invest in profitable and sustainable growth. The company also regularly evaluates potential strategic acquisitions, partnerships, joint ventures, or investments as part of the company's long-term business strategy.

Service Offerings

Booking.com

Booking.com is the world's leading brand for booking online accommodation reservations, based on room nights booked, with operations worldwide and headquarters in the Netherlands. As of December 31, 2023, Booking.com offered accommodation reservation services for approximately 3.4 million properties in over 220 countries and territories and in over 40 languages, consisting of over 475,000 hotels, motels, and resorts; and over 2.9 million homes, apartments, and other unique places to stay.

In 2023, Booking.com offered flights in 55 markets and in-destination tours and activities in 1,300 cities around the world. Booking.com offers online rental car reservation services in approximately 42,000 locations throughout the world and ground transportation services at over 1,900 airports throughout the world, with customer support in over 40 languages.

Priceline

Priceline is a leader in the discount travel reservation business, offering online travel reservation services primarily in North America, with headquarters in Norwalk, Connecticut. Priceline offers consumers hotel, flight, activity, and rental car reservation services, as well as vacation packages, cruises, and hotel distribution services for partners and affiliates.

Agoda

Agoda is a leading online accommodation reservation service catering primarily to consumers in the Asia-Pacific region, with headquarters in Singapore and operations in Bangkok, Thailand, and elsewhere. Agoda also offers flight, ground transportation, and activities reservation services.

KAYAK

KAYAK, headquartered in Stamford, Connecticut, provides online meta-search services that allow consumers to easily search and compare travel itineraries and prices from hundreds of online travel platforms at once. KAYAK offers its services in over 60 countries and territories, with its largest market in the United States, through various websites, including momondo, Cheapflights, and HotelsCombined.

OpenTable

OpenTable is a leading brand for booking online restaurant reservations. With significant operations in San Francisco, California, OpenTable provides online restaurant reservation services to consumers and reservation management services to restaurants, primarily in the United States.

Marketing and Brand Awareness

The company has established widely used and recognized e-commerce brands through marketing campaigns and strategic use of performance marketing spend. The company invests in marketing and other brand building to preserve and enhance consumer awareness of the company's brands.

Government Regulation

Regulations that impact the company's business or its industry include:

Data Protection and Privacy: The company has policies and a global governance framework to comply with privacy laws that apply to the company's business, meet evolving stakeholder expectations, and support business innovation and growth. In the European Union, the General Data Protection Regulation (the 'GDPR') imposes significant compliance obligations and costs. In the United States, the California Consumer Privacy Act (the 'CCPA') and the California Privacy Rights Act ('CPRA') impose privacy requirements and rights for consumers in California that will result in additional compliance complexity, risks, and costs. Other U.S. states and jurisdictions globally have adopted or may adopt similar data protection regulations. Some data protection and privacy laws afford consumers a private right of action against companies like the company for certain statutory violations.

Competition, Consumer Protection and Online Commerce: Competition and consumer protection authorities are increasingly focused on large technology companies, including in relation to the regulation of digital platforms. The Digital Markets Act ('DMA') and Digital Services Act ('DSA') give regulators in the EU more instruments to investigate and regulate digital businesses and impose new rules and requirements on platforms designated as 'gatekeepers' under the DMA and online platforms more generally, with separate rules for 'Very Large Online Platforms' ('VLOPs') under the DSA. In 2023, Booking.com received a VLOP designation notice from the European Commission. The company has met the quantitative notification criteria set forth in the DMA and expects to notify the European Commission of that fact within the required deadline.

Regulation of the Travel Industry: The company's business is impacted by travel-related regulations such as local regulation of the use of alternative accommodations. Local jurisdictions around the world have instituted a variety of measures to address the issues of 'overtourism' and the impact of tourism on the climate. As the company's business evolves, the company expects to become subject to existing and new regulations. For example, some parts of the company's business are already subject to certain requirements of the EU Package Travel Directive (the 'Package Directive'), and as the company's offerings continue to diversify and expand, the company may become subject to additional requirements of the Package Directive.

Payments: As the company expands its payments services to consumers and business partners, the company is subject to additional regulations, such as financial services regulations and license requirements, which has resulted in increased compliance costs and complexities, including those associated with the implementation of new or advanced internal controls. The company is also subject to payment card association rules and obligations under the company's contracts with payment card processors, including the Payment Card Industry Data Security Standard, compliance with which is complex and costly.

Seasonality

In 2023, the company's gross bookings were generally similar in the first three quarters of the year and higher than in the fourth quarter (year ended December 2023). The company generally recognizes its marketing activities as the expense is incurred, which is typically in the quarter when the gross bookings for the associated reservations are recognized. The company typically experiences its highest levels of profitability in the third quarter and the company's lowest level of profitability in the first quarter.

Competition

Google leverages its general search business to compete with Kayak by showing its own meta-search results at the top of its organic search results, and offers its meta-search services free to travel service providers. Companies like Airbnb and Vrbo (owned by Expedia) compete directly with the company's accommodations businesses.

History

The company was founded in 1997. It was incorporated in 1998. The company was formerly known as The Priceline Group Inc. and changed its name to Booking Holdings Inc. in 2018.