Booking Holdings sees "stable growth," surpasses expectations

Despite industry-wide concerns about political sentiment and potential economic impacts, on its Thursday evening earnings call, Booking Holdings said it saw stable demand globally in the first quarter of 2025.

The company observed changes in travel patterns, including a “moderation in trends” for inbound travel to the United States, but it also saw improvements in other corridors, specifically from Canada to Mexico.

With these offsetting one another, Booking Holdings chief financial officer Ewout Steenbergen said the company saw “stable growth overall” and told analysts that the company didn’t see an impact from the general economic environment.

“These results demonstrate how our globally diversified business can help to mitigate country-specific dynamics while capturing growth opportunities elsewhere,” he said, later telling analysts that the company is “agnostic” to where people are traveling as they’re typically “spending the same amount just at another destination.”

Additionally, while there was a year-over-year increase in length of stay on a global basis, there was a decrease in the U.S., indicating that consumer may be being more mindful about their spending.

“Generally, I would say the underlying trends are positive, with a slight weakness in the U.S., but overall, our position is really good,” Steenbergen said, adding that the current climate also presents an opportunity for Booking Holdings to support partners and provide value by helping to fill seats and rooms.

Financial results bested expectations

Booking Holdings, which owns Priceline, Booking.com, Kayak and OpenTable, also surpassed analysts’ expectations in Q1 2025.

Room nights were up by 7% to 319 million, compared to Q1 2024. In his prepared remarks, Booking Holdings CEO Glenn Fogel said that this is the first quarter where Booking Holdings has exceeded 300 million room nights in a single quarter.

Gross bookings were $46.7 billion in Q1, up by 7% compared to the same quarte of 2024. Revenue during Q1 2025 was also up by 8% over the same period in 2024, coming in at $4.8 billion. Adjusted EBITDA was $1.1 billion, up by 21% year over year. Marketing expense as a percentage of gross bookings was 3.8%, a slight increase from 3.7% in Q1 2024.

“I am pleased to report a good start to 2025, where healthy growth of room nights and gross bookings in the first quarter benefited from our globally diversified business,” Fogel said.

“While there is uncertainty in the market around the near-term geopolitical and macroeconomic environment, we remain focused on driving our business for the long term by delivering value to our supplier partners and our travelers and executing on our strategic priorities.”

While alternative accommodation room nights at Booking.com increased by a “high-teens percentage” in Q4 2024 compared to Q4 2023, this quarter the increase was “by a low double digits percentage.”

Proceeding with caution

Even with positive financial results, executives said that "uncertainty" could affect performance moving forward.

“Although we continue to see stable trends globally so far in the second quarter, we recognize that our business could be impacted by the increased uncertainty in the geopolitical and macroeconomic environment,” Steenbergen said.

“Therefore, we are widening the range of our full year expectations for constant currency growth. At this time, we expect constant currency growth of mid to high single digits for gross bookings and revenue and low to mid-teens for adjusted EPS [earnings per share]. The high end of each of these ranges remains in line with our prior expectations and our long-term growth ambition.” 

Continued focus on AI

Similar to previous earnings calls, Fogel once again highlighted the company’s artificial intelligence (AI) initiatives, specifically through a “travel vertical-specific agent.” 

“We are highly focused on the many opportunities with AI and will continue the sophisticated work already happening across our company to integrate generative AI into our offerings, some of which I mentioned earlier when describing their capabilities for our partners and travelers. We are seeing some of our AI offerings driving faster search, improvements in conversion and fewer customer support contacts,” Fogel said.

In response to questions from analysts, Fogel said that the goal is to “provide more value.”

“If we make it easier for people to execute what they want, in the long run, this will continue to build all the things we’ve been talking about—creating that seamless, frictionless, connected trip, which I know so many people want because I know travel is still a frustrating experience. I know we can do it so much better, and I think we are doing it already, and I think that’s part of the reason why we’re doing so well.”

He also cited recent initiatives, including the launch of Kayak.ai earlier this month, and said Booking Holdings will be moving forward with agentic developments alongside generative AI organizations.

“We were excited for several of our brands to be named as partners for OpenAI’s Operator agent, Microsoft’s Copilot Actions tool and Amazon’s Alexa+. While we are still in the very early days, we believe these three collaborations reflect our ambition of being at the forefront of this rapidly developing field and are consistent with our longstanding approach to work with different potential sources of new customer traffic,” Fogel said.