Skift Take
If Booking’s short-term rental business is so “underappreciated,” then perhaps it should start breaking out its financials to give its message more clout.
Airbnb gets “so much appreciation” for its “growth and growth outlook” while Booking Holdings is actually “growing much faster” in its alternative accommodations business.
That’s just one of three areas where Booking Holdings is “understated” and “under appreciated,” according to Ewout Steenbergen, who’s been on the job as the chief financial officer at Booking Holdings for six months.
Steenbergen was addressing attendees at a Goldman Sachs investor event Monday. He didn’t name Airbnb specifically, but referenced the “largest player” in alternative accommodations, or short-term rentals.
He said many investors don’t realize that Booking Holdings now has two-thirds the number of listings of Airbnb, which touts more than 8 milliion, and he claimed that Bookings’ alternative accommodations business has been growing faster than Airbnb’s in 12 of the past 13 quarters.
A Booking spokesperson told Skift after Steenbergen’s talk that he was referring to room night growth. We can’t confirm Steenbergen’s data since Booking only provides quarterly figures for total room nights, which include hotels and alternative accommodations.
In the second quarter, Booking’s room nights, including hotels, grew 7% year-over-year. Airbnb’s nights and experiences booked — which is weighted heavily toward nights — jumped 9%.
People Don’t Understand Booking’s Relationship With Google
Another misunderstood area, according to Steenbergen, is Booking’s growth in attracting direct traffic, as opposed to spending marketing dollars on Google to attract customers.
“There’s still this, I think, little bit [of an] outdated perception out there that [Booking] is a company that’s largely dependent on Google to attract business,” Steenbergen said. In fact, Booking’s direct traffic in its business-to-consumer realm is now in the low-60% range.
He argued that Booking could get an even larger percentage of business direct if it diminished its performance marketing spend in search engines but it chooses not to because performance marketing attracts new customers. Steenbergen also said that Booking is investing in social media marketing and sees great promise and attractive ROIs there after years when that was not the case.
Let’s Not Forget Asia
Investors may also underestimate Booking’s strength in Asia, he said.
“We have in our portfolio, the largest online travel platform in Asia outside of mainland China, called Agoda, with a very strong market position and very high growth that it is delivering,” Steenbergen said.
Connected Trip Progress
In other newsier moments, Steenbergen defended Booking’s “connected trip” strategy to get users to book trips with flights, accommodations, cars and experiences all together through Booking’s brands.
He said travelers on trips of three days or longer are using Booking’s brand to make “multiple bookings across multiple verticals” in the high single-digit percentile.
“I can see us in three to five years being in a position where that connected trip is really there, generative AI has really an impact,” Steenbergen said. “Our Asian position continues to evolve in a very strong way, alternative accommodations positions us we’re getting really to the levels where we want to be, and the company that is really growing above market in a healthy way and delivering very good economics.”
Skift Global Forum 2024: Hear what Booking CEO and president Glenn Fogel says about these issues at the Skift Global Forum, next week in New York City.
