Bookings Holdings CEO Glenn Fogel says the company is making
progress in its vision to create a “seamless, holistic system that gives and does
everything for the traveler and makes their lives easier and gives value to
them.”
This what he frequently referred to as the “connected trip” in a call with
analysts to share the company’s second-quarter 2019 financial results.
Fogel cites the company’s work to develop a payments system
as one example of this effort to “power a frictionless global marketplace.”
“People want to pay in different ways, but not every accommodation
has the ability or even wants to have the ability to accept payment that way,”
he says.
“Somebody can come to us and use the payment method they
want, and we’re able to pay the accommodation in an easy way – so right away that’s
removing a part of the friction.”
Customers can now pay Booking.com in more than 45 countries,
which represents about 80% of its focus market.
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Fogel shared additional examples of the “connected trip”
concept, including the ongoing integration of Rentalcars.com with Booking.com –
now providing pre-booked car service in approximately 800 cities globally – the
ability to use OpenTable points to book a hotel through Kayak, and the ability for
accommodation bookers to add an attraction with one click on Booking.com.
The benefit of these efforts, he says, is evident in the company’s
financial results, up across all major categories.
For the quarter ending June 30, gross travel bookings were
$25 billion, a 5% increased over the second quarter of 2018, 10% on a constant
currency basis.
The majority of that growth came in the accommodation
business – room nights booked were up 12% to 213 million units. Smaller gains
came in rental cars – bookings up 1.2% - and airline tickets, up 2.4%.
Booking Holdings' total revenues for the second quarter of
2019 were $3.9 billion, a 9% increase from the prior year, approximately 14% on
a constant-currency basis. Net income in the second quarter was $979 million,
which was in line with the prior year.
Adjusted EBITDA for the second quarter was $1.4 billion, up
10% on a constant currency basis, which was above the high end of guidance
range for the quarter.
On the spending side, money going to brand marketing jumped
41% year-over-year – from $124 million to $175 million - driven by the new
brand campaign that launched at the start of 2019.
Fogel says while he is encouraged by growth in the direct
channel, the short-term return on that marketing spending is running below
expectations.
As such, the company plans to cut back brand marketing spending
in the second half of this year. Performance marketing was up slightly, from
$1.14 billion in the second quarter of 2018 to $1.19 billion in 2019.
When asked how things may change now that Fogel has taken
over as CEO of Booking.com, he says: “One of the benefits that I’ve had is
being part of bringing all the different companies into the group. So I know where
our strengths are and I know how they can work together.
“I want to bring our execution rate faster. I want to make
things happen quicker. I believe that urgency is important in this business, and
I want to bring this new holistic system to our customers faster.”