Despite industry-wide concerns about political sentiment and
potential economic impacts, on its Thursday evening earnings call, Booking Holdings said
it saw stable demand globally in the first quarter of 2025.

The company observed changes in travel patterns, including a
“moderation in trends” for inbound travel to the United States, but it also saw
improvements in other corridors, specifically from Canada to Mexico.

With these offsetting one another, Booking Holdings chief
financial officer Ewout Steenbergen said the company saw “stable growth
overall” and told analysts that the company didn’t see an impact from the
general economic environment.

“These results demonstrate how our globally diversified
business can help to mitigate country-specific dynamics while capturing growth
opportunities elsewhere,” he said, later telling analysts that the company is
“agnostic” to where people are traveling as they’re typically “spending the
same amount just at another destination.”

Additionally, while there was a year-over-year increase in
length of stay on a global basis, there was a decrease in the U.S., indicating
that consumer may be being more mindful about their spending.

“Generally, I would say the underlying trends are positive,
with a slight weakness in the U.S., but overall, our position is really good,”
Steenbergen said, adding that the current climate also presents an opportunity
for Booking Holdings to support partners and provide value by helping to fill seats and
rooms.

Financial results bested expectations

Booking Holdings, which owns Priceline, Booking.com, Kayak
and OpenTable, also surpassed analysts’ expectations in Q1 2025.

Room nights were up by 7% to 319 million, compared to Q1
2024. In his prepared remarks, Booking Holdings CEO Glenn Fogel said that this is the first quarter where
Booking Holdings has exceeded 300 million room nights in a single quarter.

Gross bookings were $46.7 billion in Q1, up by 7% compared
to the same quarte of 2024. Revenue during Q1 2025 was also up by 8% over the same
period in 2024, coming in at $4.8 billion. Adjusted EBITDA was $1.1 billion, up by 21% year over year.
Marketing expense as a percentage of gross bookings was 3.8%, a slight
increase from 3.7% in Q1 2024.

“I am pleased to report a good start to 2025, where healthy
growth of room nights and gross bookings in the first quarter benefited from
our globally diversified business,” Fogel said.

“While there is uncertainty in the market around the
near-term geopolitical and macroeconomic environment, we remain focused on
driving our business for the long term by delivering value to our supplier
partners and our travelers and executing on our strategic priorities.”

While alternative accommodation room nights
at Booking.com increased by a “high-teens percentage” in Q4 2024 compared to Q4 2023, this
quarter the increase was “by a low double digits percentage.”

Proceeding with caution

Even with positive financial results, executives said
that “uncertainty” could affect performance moving forward.

“Although we continue to see stable trends globally so far
in the second quarter, we recognize that our business could be impacted by the
increased uncertainty in the geopolitical and macroeconomic environment,”
Steenbergen said.

“Therefore, we are widening the range of our full year
expectations for constant currency growth. At this time, we expect constant
currency growth of mid to high single digits for gross bookings and revenue and
low to mid-teens for adjusted EPS [earnings per share]. The high end of each of
these ranges remains in line with our prior expectations and our long-term
growth ambition.” 

Continued focus on AI

Similar to previous earnings calls, Fogel once again
highlighted the company’s artificial intelligence (AI) initiatives,
specifically through a “travel vertical-specific agent.” 

“We are highly focused on the many opportunities with AI and
will continue the sophisticated work already happening across our company to
integrate generative AI into our offerings, some of which I mentioned earlier
when describing their capabilities for our partners and travelers. We are
seeing some of our AI offerings driving faster search, improvements in
conversion and fewer customer support contacts,” Fogel said.

In response to questions from analysts, Fogel said that the goal is to
“provide more value.”

“If we make it easier for people to execute what they want,
in the long run, this will continue to build all the things we’ve been talking
about—creating that seamless, frictionless, connected trip, which I know so
many people want because I know travel is still a frustrating experience. I
know we can do it so much better, and I think we are doing it already, and I
think that’s part of the reason why we’re doing so well.”

He also cited recent initiatives, including the launch
of Kayak.ai earlier this month, and said Booking Holdings will be moving forward with agentic developments
alongside generative AI organizations.

“We were excited for several of our brands to be named as
partners for OpenAI’s Operator agent, Microsoft’s Copilot Actions tool and
Amazon’s Alexa+. While we are still in the very early days, we believe these
three collaborations reflect our ambition of being at the forefront of this
rapidly developing field and are consistent with our longstanding approach to
work with different potential sources of new customer traffic,” Fogel said.