Booking Holdings Bleak Results Seen as Benchmark for Rivals

(Bloomberg) -- Booking Holdings Inc. reported a decline of more than 85% in room nights booked in April from a year earlier, a staggering drop that reflects the extent of economic devastation the coronavirus is wreaking on the travel industry.

Chief Executive Officer Glenn Fogel also said that newly booked room nights, excluding cancellations, fell 60% year-over-year in March. “This gives you a clear indication of how much our business is currently impacted by this crisis,” he said during a conference call.

Booking is the first of the online travel giants to report earnings this year and its results will be held up as benchmark for its smaller rivals trying to weather the crisis.

The company said the number of room night reservations dropped 43% from a year earlier in the first quarter, while Wall Street had estimated a decline of 29%, according to data compiled by Bloomberg. Gross travel bookings, which reflect all travel services booked by customers, came in at $12.4 billion, a 51% decrease, Norwalk, Connecticut-based Booking said Thursday in a statement. Revenue fell 19% to $2.29 billion in the period, beating the $2.15 billion projected by analysts.

The pandemic has kept much of the world at home the past two months, gutting the travel industry and sparking what is likely to be the worst economic slowdown in decades. Airbnb Inc. and TripAdvisor Inc. have cut a quarter of their workforces, Expedia Group Inc.’s credit rating has been downgraded and Booking has applied for government aid.

“The travel industry is down 80% to 90% -- this is the first time that has ever happened in modern times,” said Kevin Kopelman, an analyst at Cowen & Co. who has covered Booking for almost a decade.

Last month, Booking said the virus would impact the current quarter “much more significantly” than the first, according to a securities filing. The company declined Thursday to provide a full second-quarter forecast, but said the results in April should provide “a clear picture of recent top line trends.”

However, Booking executives said they believe travel will bounce back, albeit slowly. “It will likely be years, not quarters, before we witness a full recovery of global travel demand,” Fogel said on the call. “We believe that either a vaccine or effective treatment is needed before people will feel fully comfortable traveling the way we did before the pandemic started.”

The company faces “a tough road ahead,” Fogel said. “The impact of Covid-19 is unprecedented, but we know one day we will be on the other side and we are doing everything we can to ensure we are well positioned to navigate through these challenging times.”

Booking’s stock declined about 1.5% in extended trading after closing at $1,443.91 in New York. The shares have fallen 31% this year, outperforming Expedia and TripAdvisor. The company, formerly known as Priceline, reported profit excluding some costs, of $3.77 a share in the first quarter, lower than the $5.38 analysts projected.

In reporting its results as scheduled, Booking has indicated “the company is further down the path of understanding and addressing the ongoing pandemic” than its rivals, according to a note by Wedbush Securities analysts. Expedia, which typically reports earnings before Booking, has delayed delivering its results until May 20.

(updates with comments from CEO in the third paragraph.)

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