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Booking Holdings (BKNG +4%) rode the strong travel demand current in Q4, posting another healthy earnings beat on accelerating revenue growth. The online travel agency, which owns several brands, including Booking.com, Kayak, and OpenTable, also hiked its dividend by 10%. Leading into Q4 results, peers Expedia Group (EXPE) and Airbnb (ABNB) popped on robust travel demand and uplifting forward-looking remarks, anticipating individuals' appetites to continue traveling to persist over the near term.

• This resilient demand backdrop reinforced BKNG's strong headline numbers in Q4, posting adjusted EPS of $41.55 on top-line growth of 14.4% yr/yr to $5.47 bln, up over 5 pts from an +8.9% jump last quarter. Room nights exceeded the higher end of BKNG's prior outlook of +6-8%, expanding by 13% yr/yr, with growth seen across all major regions. As a result, gross bookings growth hit 17% in the quarter, crushing BKNG's +7-9% forecast.
  • For the year, BKNG surpassed its long-term growth targets, including gross bookings of at least +8% and constant currency-adjusted EPS of at least +15%.
• Like Airbnb and EXPE's Vrbo, BKNG's alternative accommodations offering enjoyed accelerating demand in Q4, registering room night growth of 19% yr/yr, outpacing the overall business. BKNG's alternative accommodation growth rate has been impressive lately, tacking on 5 pts from last quarter's 14% jump. Management chalked it up to excellent supply and its competitive edge in combining traditional and alternative accommodations on its platform, allowing travelers to compare options.
• BKNG is optimistic about the start of 2025 as it continues to witness healthy demand for leisure travel globally. For Q1, BKNG expects room night growth of +5-7% and gross bookings of +5-7%, which includes around a 4 pt impact from FX headwinds.
• For the year, even when assuming normalized growth, BKNG is targeting constant currency growth rates above its long-term estimates in FY25. Management added that consumers continue to demonstrate the importance of travel, maintaining a preference for experiences, which is reinforcing its energetic long-term outlook.
• AI is staying front and center in BKNG's long-term roadmap. The company believes that AI-powered offerings, like travel-specific AI agents, will take on a central role in delivering a more personalized customer experience. BKNG will remain highly focused on the many AI-related opportunities, furthering the work already unfolding across its operations to integrate Gen AI into its offerings, including Booking.com's AI Trip Planner and Priceline's AI-powered assistant.
  • BKNG also sees AI as being able to contribute to a further deceleration of its fixed expense growth in 2025 due to its potential to fuel improvements in operational efficiency.

BKNG is firing on all cylinders as it fully capitalizes on a healthy travel demand environment. Even as competitive forces loom, such as ABNB and EXPE investing in their alternative accommodations platforms while agentic platforms attempt to leverage AI to bypass third-party listings, BKNG is proving its ability to adapt quickly, delivering robust bookings growth across the board while deploying AI where it matters to further cement its competitive edge and provide a long-lasting tailwind.