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Booking Falls After Pace of Travel Revival Disappoints

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(Bloomberg) -- Booking Holdings Inc. reported gross bookings in line with estimates, but room night reservations on the online travel company’s platforms fell far short of expectations during the holiday period as the omicron variant continued to disrupt global travel.

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The shares, which initially rose after the report, gave back those gains and dropped as much as 8.9% in extended trading.

The company’s gross bookings, which represent all travel services excluding cancellations, increased 160% to $19 billion, according to a statement Wednesday. Revenue more than doubled to $2.98 billion. Analysts, on average, projected gross bookings of $19 billion and sales of $2.88 billion, according to data compiled by Bloomberg.

While meeting Wall Street’s estimates, gross bookings are still lagging behind pre-pandemic levels. The metric hit almost $21 billion in the fourth quarter of 2019. Room nights booked were 151 million in the period ended Dec. 31, compared with analysts’ estimates of 165.9 million. The company reported 191 million room nights booked in the fourth quarter of 2019.

Still, Chief Executive Officer Glenn Fogel expressed cautious optimism about the year ahead.

“I am encouraged by the meaningful improvement in bookings we have seen so far in the first quarter,” Fogel said in the statement. “I believe we are well positioned as travel demand recovers, however, we do expect there will still be periods where Covid negatively impacts travel trends as we move through the year.”

Profit, excluding certain costs, was $15.83 a share, compared with the analyst estimate of $13.50 a share.

Most travel companies outperformed expectations for the fourth quarter even with the uncertainty and flight disruptions caused by omicron. Expedia Group Inc. and Airbnb Inc. said the shocks of the virus had become less severe. Airbnb has found a niche in providing short-term rentals that let employees “work and live from anywhere,” which made 2021 the “best year” in the company’s history, CEO Brian Chesky said.

Booking has a strong global presence, with close to 90% of 2020 revenue coming from its international segments. Travel slowed down in December for both international and domestic travel, with cancellation rates above fourth quarter 2019 levels, Chief Financial Officer David Goulden said on a conference call after the results were released.

However, Goulden also said the company is seeing stronger signs of a recovery underway this month. Room nights for the first half of February were close to 2019 levels, with particularly strong growth in the U.S., he said. Cross-border travel is also recovering in Europe, with average stays increasing and shorter booking windows compared with 2019.

Goulden’s view echoed a note earlier Wednesday from Kevin Kopelman, an analyst at Cowen Inc, who wrote that European travel appeared to be improving despite a hit in January. Low-priced airline Ryanair said it expected pre-pandemic passenger levels to recover by March, Kopelman wrote.

Norwalk, Connecticut-based Booking owns flight aggregator Kayak and travel booking site Priceline, as well as an alternative accommodations platform. The stock had increased 2.9% this year after closing at $2,469.83 in New York.

(Updates with shares in the second paragraph.)

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