Key Metrics
- Gross Bookings: $43,447 million (9.1% yoy)
- Merchant Gross Bookings: $28,362 million
- Agency Gross Bookings: $15,085 million
- Revenue: $7,994 million (8.9% yoy)
- Merchant Revenues: $4,972 million
- Agency Revenues: $2,753 million
- Advertising and Other Revenues: $269 million
- Room Nights: 299 million (8.1% yoy)
- Rental Car Days: 23 million (16.2% yoy)
- Airline Tickets: 13 million (38.7% yoy)
- Cash from Operations: $7.6 billion
Forward guidance
- Q4 Room Night Growth: Expected to be between 6% and 8%.
- Q4 Gross Bookings Growth: Anticipated to grow between 7% and 9%.
- Q4 Revenue Growth: Projected to be between 7% and 9%.
- Q4 Adjusted EBITDA: Expected to be between $1.6 billion and $1.65 billion, representing growth of 9% to 13%.
- Full-Year Gross Bookings Growth: Expected to increase about 8%, up from prior expectation of faster than 6%.
- Full-Year Revenue Growth: Projected to be just below 10%, improved from prior expectation of faster than 7%.
- Full-Year Adjusted EPS Growth: Expected to grow in the high-teens percentage.
Key takeaways
- Positives:
- Glenn Fogel noted, "We continue to be encouraged by the strength of our underlying business, the health of the travel industry and the attractiveness of our products," indicating robust demand and a favorable market environment.
- Adjusted EBITDA exceeded guidance by 9%, driven by disciplined marketing spend and lower fixed OpEx growth, showcasing effective cost management.
- Room nights grew 8% year-over-year, with Europe showing a strong recovery, suggesting a rebound in travel demand post-pandemic.
- The alternative accommodations segment grew 14%, with listings increasing to 7.9 million, reflecting successful expansion and diversification of offerings.
- AI initiatives are being integrated across platforms, with Glenn stating, "The companies that are successful in AI are going to be the long-term winners," highlighting a strategic focus on technology to enhance customer experience and operational efficiency.
- Negatives:
- The U.S. market growth remains stable but low-single digits, with Fogel acknowledging, "We're still not where we'd like to be," indicating competitive pressures and brand awareness challenges.
- Fixed OpEx growth is still a concern, with adjusted fixed expenses up 7% year-over-year, suggesting ongoing operational challenges.
- The impact of geopolitical events on bookings was acknowledged, with Ewout Steenbergen stating, "We absolutely also have reflected uncertainties and risks with respect to the global geopolitical environment," indicating potential volatility in future performance.
- The company is still in the early stages of AI implementation, with Fogel admitting, "It's still very, very early," suggesting that the full financial benefits of these initiatives may take time to materialize.
Peer Summary
- Consumer Demand Softening: Expedia noted, "the travel environment showed mixed demand, with July being softer," indicating potential volatility in consumer behavior that could affect overall sector performance.
- Competitive Pressures: Tripadvisor acknowledged, "a softer pricing environment" and "volume trends remained under pressure," suggesting increased competition in the online travel agency space that may impact pricing strategies across the sector.
- Regulatory Challenges: Airbnb highlighted, "New York is now a cautionary tale," pointing to regulatory risks that could hinder growth in key markets, a concern that may resonate across the accommodation sector.
- Operational Challenges: Sabre reported, "IT Solutions revenue declined," indicating difficulties in stabilizing certain segments, which could reflect broader operational issues within technology providers in the travel industry.
- Market Dynamics: Airbnb's Ellie Mertz stated, "supply growth exceeded demand by a couple of points," suggesting a potential oversupply in the accommodation market, which could lead to pricing pressures and affect profitability across competitors.
