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BKNG Q3 Earnings Call Highlights Travel Slowdown and AI Push
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Key Takeaways
BKNG expects Q4 room nights to grow 1-3% as international demand softens amid Middle East disruptions.
Booking's AI assistants give roughly twice the conversion rate, Agoda users show 20% higher booking values.
BKNG targets $650M in annual savings by 2027 while expanding Connected Trips and loyalty benefits.
Booking Holdings Inc. (BKNG - Free Report) struck a cautious near-term tone on its third-quarter 2026 earnings call as management flagged moderating international travel demand and disruptions linked to the Middle East conflict.
Chief financial officer Ewout Steenbergen expects fourth-quarter room nights to grow 1% to 3% and gross bookings to rise 2% to 4%. Adjusted revenue growth is projected at 0% to 2%, with adjusted EBITDA roughly flat year over year.
Steenbergen said softer international demand emerged late in the third quarter, while domestic travel remained resilient. The outlook incorporates elevated airfares, Middle East disruptions and unrest in European cities.
For 2026, management maintained expectations for high-single-digit growth in gross bookings, adjusted revenue and adjusted EBITDA, alongside low-to-mid-teens adjusted earnings per share growth.
Booking Tests AI Conversion and New Travel Agents
Chief executive officer Glenn Fogel described AI as a central priority across discovery, booking and customer service. Booking.com is expanding AI search tools, while Agoda and Priceline are developing assistants that connect recommendations with live inventory.
In the Q&A, Steenbergen said users of Priceline's Penny and Agoda's AI assistant converted at approximately twice the rate of nonusers. Agoda's assistant users also had roughly 20% higher average booking values.
Fogel highlighted newly launched Lola and Vayo as testing grounds for AI-native experiences. Successful capabilities could later move into its established brands.
BKNG Weighs the Economics of AI Referrals
Management said referrals from large language models have accelerated but remain significantly below 1% of Booking.com's room nights.
Asked by a Morgan Stanley analyst whether AI agents could generate incremental travel demand, Fogel pointed to reduced booking friction as an opportunity. Steenbergen emphasized the potential economic benefits of diversifying third-party distribution.
A BofA Securities analyst questioned whether agents might favor hotel websites over online travel agencies. Fogel defended Booking's accommodation supply and partner services.
Booking Builds Loyalty Through Connected Trips
Fogel said Connected Trip transactions, which combine travel categories within one journey, grew three times faster than overall Booking.com transactions. Steenbergen added that their growth approached 20% and accounted for a low-double-digit share of transactions.
Higher-tier Genius members represented more than 30% of active Booking.com customers over the past year and generated a high-50% share of room nights. Management said these customers book directly and return more consistently.
A Deutsche Bank analyst pressed management on extending Genius without excessive supplier-funded discounts. Fogel discussed expanding traveler benefits beyond price reductions but provided no rollout timetable.
BKNG Keeps Costs in Check Amid AI Investment
Steenbergen said adjusted fixed operating expenses rose 6% in the third quarter, while customer service efficiencies helped offset higher payment costs. Adjusted EBITDA grew 9% to $4.6 billion. Adjusted EPS of $4.66 exceeded the $4.48 Zacks Consensus Estimate, while revenues of $8.89 billion fell short of the $9.56 billion consensus estimate, reflecting a $900 million FTC-related reduction.
Booking Holdings Inc. Price, Consensus and EPS Surprise
AI is contributing to efficiency gains. Agoda's blended cost per million AI tokens fell more than 25% between June and September, while companywide engineering costs per merge request declined.
During the Q&A, Steenbergen said fourth-quarter investment would increase across AI, additional travel categories and technology infrastructure. He declined to provide a detailed 2027 outlook, citing plans to address it with fourth-quarter results.
Booking Balances Shareholder Returns and Expansion
The company repurchased $2.1 billion of shares in the third quarter. Steenbergen said the company returned $10.5 billion to shareholders during the first nine months of 2026, including $9.5 billion in buybacks.
Management continues to prioritize expansion in the United States and Asia, with regional investments in products, payments, marketing and supplier relationships. Steenbergen also reaffirmed the target of $650 million in annual transformation savings by 2027.
Booking's closing message combined confidence in its platform and supplier relationships with caution about near-term demand. Management remains focused on funding long-term initiatives while preserving profitability.
BKNG Zacks Rank and Style Scores Send Mixed Signals
BKNG currently carries a Zacks Rank #4 (Sell), indicating unfavorable earnings estimate revision trends. Its Value Score is C, while its Growth Score, Momentum Score and VGM Score are all A.
The A grades highlight favorable characteristics, but Zacks methodology prioritizes the Rank for near-term prospects. The Zacks Rank can change as analysts revise estimates following the latest quarterly results.
View the Zacks #1 Rank List
Image: Bigstock
BKNG Q3 Earnings Call Highlights Travel Slowdown and AI Push
Key Takeaways
Booking Holdings Inc. (BKNG - Free Report) struck a cautious near-term tone on its third-quarter 2026 earnings call as management flagged moderating international travel demand and disruptions linked to the Middle East conflict.
Executives emphasized AI-powered travel services, customer loyalty and cost controls alongside longer-term growth ambitions.
BKNG Sees Slower Travel Growth in Fourth Quarter
Chief financial officer Ewout Steenbergen expects fourth-quarter room nights to grow 1% to 3% and gross bookings to rise 2% to 4%. Adjusted revenue growth is projected at 0% to 2%, with adjusted EBITDA roughly flat year over year.
Steenbergen said softer international demand emerged late in the third quarter, while domestic travel remained resilient. The outlook incorporates elevated airfares, Middle East disruptions and unrest in European cities.
For 2026, management maintained expectations for high-single-digit growth in gross bookings, adjusted revenue and adjusted EBITDA, alongside low-to-mid-teens adjusted earnings per share growth.
Booking Tests AI Conversion and New Travel Agents
Chief executive officer Glenn Fogel described AI as a central priority across discovery, booking and customer service. Booking.com is expanding AI search tools, while Agoda and Priceline are developing assistants that connect recommendations with live inventory.
In the Q&A, Steenbergen said users of Priceline's Penny and Agoda's AI assistant converted at approximately twice the rate of nonusers. Agoda's assistant users also had roughly 20% higher average booking values.
Fogel highlighted newly launched Lola and Vayo as testing grounds for AI-native experiences. Successful capabilities could later move into its established brands.
BKNG Weighs the Economics of AI Referrals
Management said referrals from large language models have accelerated but remain significantly below 1% of Booking.com's room nights.
Asked by a Morgan Stanley analyst whether AI agents could generate incremental travel demand, Fogel pointed to reduced booking friction as an opportunity. Steenbergen emphasized the potential economic benefits of diversifying third-party distribution.
A BofA Securities analyst questioned whether agents might favor hotel websites over online travel agencies. Fogel defended Booking's accommodation supply and partner services.
Booking Builds Loyalty Through Connected Trips
Fogel said Connected Trip transactions, which combine travel categories within one journey, grew three times faster than overall Booking.com transactions. Steenbergen added that their growth approached 20% and accounted for a low-double-digit share of transactions.
Higher-tier Genius members represented more than 30% of active Booking.com customers over the past year and generated a high-50% share of room nights. Management said these customers book directly and return more consistently.
A Deutsche Bank analyst pressed management on extending Genius without excessive supplier-funded discounts. Fogel discussed expanding traveler benefits beyond price reductions but provided no rollout timetable.
BKNG Keeps Costs in Check Amid AI Investment
Steenbergen said adjusted fixed operating expenses rose 6% in the third quarter, while customer service efficiencies helped offset higher payment costs. Adjusted EBITDA grew 9% to $4.6 billion. Adjusted EPS of $4.66 exceeded the $4.48 Zacks Consensus Estimate, while revenues of $8.89 billion fell short of the $9.56 billion consensus estimate, reflecting a $900 million FTC-related reduction.
Booking Holdings Inc. Price, Consensus and EPS Surprise
Booking Holdings Inc. price-consensus-eps-surprise-chart | Booking Holdings Inc. Quote
AI is contributing to efficiency gains. Agoda's blended cost per million AI tokens fell more than 25% between June and September, while companywide engineering costs per merge request declined.
During the Q&A, Steenbergen said fourth-quarter investment would increase across AI, additional travel categories and technology infrastructure. He declined to provide a detailed 2027 outlook, citing plans to address it with fourth-quarter results.
Booking Balances Shareholder Returns and Expansion
The company repurchased $2.1 billion of shares in the third quarter. Steenbergen said the company returned $10.5 billion to shareholders during the first nine months of 2026, including $9.5 billion in buybacks.
Management continues to prioritize expansion in the United States and Asia, with regional investments in products, payments, marketing and supplier relationships. Steenbergen also reaffirmed the target of $650 million in annual transformation savings by 2027.
Booking's closing message combined confidence in its platform and supplier relationships with caution about near-term demand. Management remains focused on funding long-term initiatives while preserving profitability.
BKNG Zacks Rank and Style Scores Send Mixed Signals
BKNG currently carries a Zacks Rank #4 (Sell), indicating unfavorable earnings estimate revision trends. Its Value Score is C, while its Growth Score, Momentum Score and VGM Score are all A.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The A grades highlight favorable characteristics, but Zacks methodology prioritizes the Rank for near-term prospects. The Zacks Rank can change as analysts revise estimates following the latest quarterly results.