Booking Holdings has been working on creating a “connected trip” where travelers can book multiple components of their trip on Booking.com. However, progress has been slow with over 90% of travelers only booking one component before going elsewhere. In the first quarter earnings call, officials reported some progress in “connected transactions,” with a 50% increase year-over-year, although it is still a small percentage of overall transactions on Booking.com.
Despite some growth, the company acknowledges that the connected trip won’t become a reality in the next few years. Booking.com sources most of its tours and activities from third parties, and building that part of the business isn’t a priority at the moment. Instead, the company is focusing on building its flights business, which saw a 33% increase in bookings in the first quarter. They are also working on expanding the Genius discount program to include deals for flights and attractions.
Booking Holdings had a strong financial performance in the first quarter, with net income increasing by 192% to $776 million on revenue of $4.4 billion, a 17% increase. The company beat consensus estimates on both revenue and earnings per share. Room nights booked experienced a modest 9% increase year-over-year in the first quarter, which is typically the weakest quarter for the company.
Key components of the connected trip strategy include the Genius loyalty program, direct bookings, AI trip planners, simplifying payments, and the tours and activities business. More efforts are being made to strengthen direct relationships with travelers, with the mix of total room nights coming through the direct channel increasing year-over-year. The company is also testing offering Genius rewards for flights and attractions in addition to accommodations.
Despite the progress in connected transactions, the company acknowledges that the connected trip concept is still far from being fully realized. While there is growth in attractions and rental cars as part of connected transactions, most travelers are still booking individual components separately. The company remains focused on building its flights business and expanding the Genius discount program to include flights and attractions. Overall, Booking Holdings is encouraged by the progress made in the first quarter and remains optimistic about future growth opportunities.
