Booking Holdings’ gross travel bookings plummeted 91% to $2.1 billion in the second quarter of 2020 as the company felt the “full impact” of COVID-19, said president and CEO Glenn Fogel.
Room nights in the quarter ending June 30 slumped 87% compared to Q2 2019. For newly booked room nights, April saw the biggest decline at 85%.
The company's total revenues for the quarter were $630 million, an 84% decrease year-over-year, while net income for the period was $122 million, an 88% decrease compared to $979 million in Q2 2019.
Adjusted EBITDA loss for the second quarter of 2020 was $376 million compared with adjusted EBITDA of $1.4 billion for Q2 2019. In a call with analysts, Fogel said this was the first time the company has reported a quarterly EBITDA loss since 2001.
Fogel said he does not expect to see sufficient recovery until there is a vaccine or effective treatment for COVID-19. “We believe it will be years and not quarters before the travel market returns to pre-COVID dollars.”
He added that there have been signs of domestic recovery – in July, for example, there was slightly positive year-on-year growth for newly booked room nights, and almost all global markets showed improvement – but he cautioned that new outbreaks of COVID-19 may lead to more cancellations again.
In the second quarter of 2020, alternative accommodations represented 40% of all new bookings as travelers opted for isolation away from hotel lobbies.
Marketing spending decreased to $211 million for Q2 2020 compared to $1.37 billion for the same period in 2019. Booking Holdings CFO David Goulden said he expects marketing spend to remain significantly below 2019 levels for the remainder of the year.
In Q1 2020, Fogel outlined a three-phase approach of stabilizing the business, optimizing the business to handle the decrease in demand and positioning the business to capture demand when it returns.
He said the company has completed phase one and is now on the optimization phase in which Booking Holdings will assess its cost structure. He said Kayak, OpenTable and Agoda completed this step in Q2, which reduced headcount by approximately 22% across the brands, and Priceline completed the phase in July.
Booking.com, which is cutting its workforce by about 25%, is in the process of consulting with work councils and unions. Fogel said the Booking.com cost reductions could produce annual personnel savings of from $250 to $300 million.