Booking's first changes over Airbnb competition
Travel giant Booking Holdings Inc. jumped in after-market trading after making the analysis of profit estimates as well as the threat of new competition from Airbnb Inc.
Booking, which changed its name last week from the Priceline Group, grew the total number of non-hotel accommodations on its websites to 1.2 million, a 53 percent increase from last year. Airbnb has about 4.3 million. Asked about that company’s new push into hotels, Booking’s main business, Chief Executive Officer Glenn Fogel didn’t seem worried.
“I don’t see that one company coming in and saying they’re going to offer a small number of select hotel type properties as a big issue,” Fogel said. “We’ve been facing competition of all sorts for a long time.”
The shares in extended trading in New York rose 7 percent to $2,030.
Booking is pouring resources into alternative accommodation, the fastest-growing part of the online travel market. Separately, the company has switched from a focus on online advertising through travel search companies like Trivago NV, to a strategy of pushing more on TV ads, gaining more long-term benefits.
That change initially hurt Booking’s bottom line, but this quarter shows the switch is starting to pay off.
Profit, excluding some items, was $16.86 a share in the three months ending in December, compared with the average analyst estimate of $14.13 and the company’s forecast of as much as $14. Revenue was $2.8 billion, while analysts had projected it would be $2.7 billion. The company predicted profit in the current quarter of $10 to $10.40 a share, the midpoint of which is below the average analyst estimate of $10.32.
“I am very, very pleased with how things ended up in the fourth quarter,” Fogel said.
The total amount of gross travel bookings made on the company’s various websites was $18 billion, compared with $15.1 billion in the same period last year.
The name change to Booking from Priceline was partly aimed at getting consumers in the U.S. to use the Amsterdam-based brand, which makes up the majority of the group’s revenue. U.S. consumers aren’t as aware of Booking.com as people around the world are, especially when it comes to the ability to book non-hotel properties.
“In some geographies our abilities in this area are not as well known as other geographies,” Fogel said on a conference call. The company is “determined” to change this, he said.