Booking Holdings CEO:full recovery for the travel industry “is going to take years.” – Idaho Reporter

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Booking Holdings CEO:full recovery for the travel industry “is going to take years.”

Booking Holdings(NYSE: BKNG) is the parent company of travel aggregators Priceline, Booking.com, and others. The company had been on growth spree throughout the last decade as more and people gained access to cheaper flights, international travel, and business travel. The company’s online model paid off handsomely as digital reservation killed the travel agent and physical ticketing business. From 2010 till the end of the decade the company grew nearly 8x in size, vastly outperforming chief rival Expedia in terms of growth.(Trefis Stats)

In 2020, however the coronavirus pandemic sadly brought all of it’s avenues to a standstill. 

As the coronavirus contaminates the economy, the looming threat of a recession might cause a considerable dent in consumer spending. There also concerns of a permanent reduction in business travel as companies all over the world are forced to impose work-from-home policies. This sudden and forced change might change the landscape of business travel forever.

 

As the company mainly aggregated travel booking across many modes of transport and accommodations for vacation and business travelers, it has seen a steep drop in business as traveler volumes declined 95% in April and many states imposed lockdowns. The future of the business also looks bleak as travel in close quarters and social distancing might deter travelers until a vaccine is developed and administered globally. 

On the 7thof May, Booking Holdings put out their Q1 2020 earnings report. The company’s financials were a rude shock for investors as they severely underperformed projections. The company reported a loss of $17 a share or $699 million loss in total compared to a profit of $16.85 or $765 million in Q1 last year (MarketWatch). Market analysts had projected a profit of $4.94 per share and revenue of $2.22 billion (Seeking Alpha). Although, the company’s revenue outperformed estimates, the loss and it’s size shocked the market following which the stock tanked 19% at the opening today. The company reported an 85% decrease in room nights booked in April and a 51% decrease in travel bookings during the same period.

On the earnings call, the management of the company stated that the sector would probably undergo a long and slow recovery. Booking Holdings Chief Executive Glenn Fogel stated, “It will likely be years, not quarters before we witness a full recovery of global travel demand”.

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