The company expects the closely watched metric of room nights growth to be about 7% for the full year. — Bloomberg
NEW YORK: Booking Holdings Inc, the parent company to travel brands including Kayak and Priceline, reported a better-than-expected full-year reservations outlook, reassuring investors who have worried that broader economic concerns and a US government shutdown will stunt travel demand.
The shares rose in extended trading. The company expects the closely watched metric of room nights growth to be about 7% for the full year, the company said.
Analysts were expecting a 6.7% gain, according to Bloomberg-compiled data.
The upbeat forecast was helped by robust results in the third quarter, during which the firm topped analysts’ estimates on room nights sold and gross bookings.
Room nights sold grew 8% to 323 million for the three months ended Sept 30, compared with analysts’ average estimate of 316 million. Gross bookings were US$49.7bil, ahead of the average projection of the US$47.9bil.
Resilient demand across all major regions drove the results ahead of expectations, with the United States benefiting from stronger outbound travel. Still, concerns of a more cautious consumer linger as average daily rates (ADR) paid by guests in the region were lower from a year ago, Booking executives said on a conference call after the results were released.
“In the United States, we continue to see slightly lower ADR and a shorter length of stay versus the prior year, which may indicate that some US consumers are continuing to be thoughtful on their discretionary spending,” chief financial officer Ewout Steenbergen said on the call.
The shares rose about 5% in extended trading. The stock had gained 3.1% this year through Tuesday’s close, trailing the S&P 500 Index.
The shares of online travel peers Expedia Group Inc and Airbnb Inc also jumped after Booking released its results. They are scheduled to report earnings on Nov 6.
Booking had warned during its previous earnings in July that “increased uncertainty” in the economic and political environment would weigh on travel demand.
Elsewhere in the travel industry, financial outlooks this season have so far been mixed.
While American Airlines Group Inc and Delta Air Lines Inc expect a strong end to the year, Southwest Airlines Co said the holiday travel period may be weaker than usual if the second longest government shutdown in US history drags on.
Booking’s third-quarter results won praise from investors despite a forecast for the fourth quarter holiday period that fell short of Wall Street projections on some key metrics. — Bloomberg
