Booking Holdings reports a sharp drop in overnight stays
Booking Holdings Inc. reported a decline in first quarter booked nights that was higher than analysts’ estimates, reflecting the extent of the economic devastation the coronavirus has caused to the travel industry.
The online travel operator said the number of room nights booked fell 43% from the previous year, while Wall Street estimated a drop of 29%, according to data compiled by Bloomberg. Gross travel bookings, which reflect all travel services booked by customers, amounted to US $ 12.4 billion, a decrease of 51%. The Norwalk, Connecticut-based company said its revenues fell 19 percent to US $ 2.29 billion over the period, exceeding US $ 2.15 billion projected by analysts.
“The COVID-19 pandemic has deeply affected our business and the entire travel industry,” CEO Glenn Fogel said in a statement on Thursday.
Booking is the first of the online travel giants to publish its results this year and its results will be seen as a benchmark for its smaller competitors trying to weather the crisis.
The pandemic has shut down most of the world for about two months, wiping out the travel industry and causing what is arguably the worst economic downturn in decades. Airbnb Inc. and TripAdvisor Inc. have cut their workforce by a quarter, Expedia Group Inc.’s credit rating has been downgraded, and Booking has requested government assistance.
“The travel industry is down 80 to 90% – this is the first time this has happened in modern times,” said Kevin Kopelman, analyst at Cowen & Co. who has covered Booking for nearly a decade.
Last month, Booking said bookings of newly booked overnight stays fell by more than 85% in the first few days of April, according to a securities filing. He predicted the virus would impact the current quarter “much more significantly” than the first.
Booking stock has fallen 31% this year, outperforming Expedia and TripAdvisor. The company, formerly known as Priceline, reported first-quarter profit excluding certain costs of $ 3.77 per share, down from $ 5.38 projected by analysts. Shares fell about 2 percent on Thursday in extended trading.
Reporting on its results as planned, Booking said “the company is more advanced in understanding and tackling the ongoing pandemic” than its rivals, according to a note from analysts at Wedbush Securities. Expedia, which usually reports income before booking, has delayed delivery of its results until May 20.