(Bloomberg) -- Booking Holdings Inc. provided an upbeat forecast on the current quarter, saying that room nights booked in October were roughly 12% higher than 2019 levels, alleviating concerns after room night growth slowed in July.
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Chief Executive Officer Glenn Fogel said that room night growth also improved by 10% over 2019 levels in August and September, adding that consumers have been able to stomach higher average daily rates at hotels.
“We’re seeing people who want to travel, who have a significant amount of savings,” Fogel said on a call with analysts Wednesday. “Some are even traveling longer and enjoying it regardless of what the economic situation is.”
The Norwalk, Connecticut-based company is forecasting more than $1.1 billion in adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter, lower than the average analysts’ of $1.22 billion. Shares rose by 5.2% in after hours trading, paring some gains.
The largest US online travel company has rebounded from an early pandemic slump and had been anticipating one of the strongest summer seasons ever with the end of Covid-19 restrictions around much of the world. But rising inflation and a strong dollar have injected some doubt into the outlook for the rest of the year. On Tuesday, Airbnb Inc. said it expected nights and experiences booked to “moderate slightly” in the current period.
Gross bookings, which include all travel services booked by customers net of cancellations, jumped 36% to $32.12 billion in the third quarter. Analysts had forecast $30.74 billion. Revenue was $6.1 billion, a quarterly record and up 29% from last year. Room nights booked, which reflects the largest category of travel services at Booking, rose 32% to 240 million. Analysts had forecast 236.9 million. Adjusted net income gained 26% to $2.7 billion, or $53.03 a share. Analysts had projected $49.62 per share.
Booking operates across six sites, giving it a comprehensive view of the global travel market. Its namesake brand offers online reservation services at hotels, resorts and apartments around the world in addition to a growing alternative accommodations platform to rival Airbnb and Expedia Group Inc.’s Vrbo. The parent company also owns Priceline, which provides discount bookings for hotels, cruises, cars and vacation packages. Other brands include flight aggregator Kayak and restaurant reservation portal OpenTable. The company earns about 85% of its revenue from international markets, making it particularly vulnerable to fluctuations in currencies.
Even with record revenue across the travel industry, investors have punished travel companies, sending shares of Booking down 26% this year. The company has fared better than its rivals Airbnb and Expedia, which have declined 43% and 50% so far this year, respectively.
(Adds updates from analyst call throughout.)
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