Beating the Odds: Tourism Giants Surpass Q2 Predictions

Booking Holding #BKNG owns Booking.com, Priceline, Agoda, Kayak, Rentalcars.com and OpenTable.

• Gross travel bookings increased by 15% to $39.7 billion (inclusive of taxes and fees, net of cancellations).
• Nights booked rose by 9%.
• Revenue surged by 27% to $5.5 billion.
• GAAP net income grew by 51% to $1.3 billion, with diluted EPS reaching $34.89 (up by 66%).
• Non-GAAP net income soared by 79% to $1.4 billion, leading to an EPS of $37.62 (up by 97%).
• Adjusted EBITDA rose by 64% to $1.8 billion.
• End-of-period cash increased to $15.7 billion, up from $15.3 billion, due to a $1.9 billion debt issuance and $1.6 billion free cash flow (offset by $3.1 billion share repurchases).
• $5.1 billion worth of shares were bought back in the first half of the year, representing 5% of the 2022 year-end number. Total buyback authority was reduced from $24 billion to $19 billion. The plan is to achieve a 100% buyback within four years, subject to the tourism industry’s performance.

Key insights:
High demand for travel services, leading to increased overnight stays and gross bookings.
Expected record summer tourist season in Q3 due to ongoing trends.
Priceline and Booking.com have introduced AI generative travel assistants.
#BKNG has seen an 11% increase in performance since the beginning of the year.

Airbnb #ABNB had a robust Q2 with impressive numbers driven by strong revenue, disciplined spending, and interest income. The company experienced growth in active customers across all regions, including a notable rise in first-time bookers. Since its inception, Airbnb has successfully registered over 1.5 billion guests.

• Nights booked increased to 115 million, showing an 11% growth.
• Gross booking value reached $19.1 billion (+19%).
• Revenue rose to $2.5 billion (+18%).
• Net income saw significant growth, reaching $650 million, a remarkable increase of 72%. This makes it the top-grossing Q2 based on GAAP standards.
• The company achieved a record net profit margin of 26% for Q2, compared to 18% a year ago.
• Adjusted EBITDA rose to $819 million (+15%).
• Free cash flow increased to $900 million (+13%).
• The strong Q2 free cash flow enabled the company to perform $2.5 billion worth of share repurchases in the last 12 months. Overall, since the launch of the buyback program in August 2022, the number of shares has reduced from 705 million to 686 million at the end of Q2 2023.

Key takeaways: There has been a notable surge in bookings. The average daily rate (AD) and the average daily ADR rate (~$166) have remained consistently stable. The strategy implemented to establish hosting as a mainstream activity has been successful, evident from a remarkable 19% year-on-year increase in active listings across all regions, market types, and price categories. Also, the addition of active listings in the current quarter surpassed the entire historical growth of Airbnb, reaching an impressive milestone of over 7 million total listings. Moreover, new host pricing tools were introduced to enhance the hosting experience. The stock price of #ABNB has surged by an impressive 65% since the beginning of the year.