Booking Holdings (BKNG) Swings to Quarterly Loss as Pandemic Continue to Hurt Demand

Booking Holdings Inc. (NASDAQ:BKNG) is a leading player in the online travel industry, operating famous sites such as Booking.com, Agoda.com, Kayak.com, among few others. Some products and services across its websites overlap but each site has a unique user base. The company primarily generates revenue from booking commissions and advertisements.

Tourism was one of the hardest hit industries from the Covid-19 pandemic. Being the top online travel agency, Booking Holdings also struggled to boost revenue during the pandemic, mainly due to travel ban in most parts of the world. BKNG’s stock advanced only around 6 percent during 2020.

The company on Wednesday announced disappointing quarterly results for the fourth quarter, sending its shares down more than 5 percent in the mid-day trading Thursday. Booking Holdings reported a loss of $165 million, or $4.02 per share for the three months ended December 31, as compared to earnings of $27.75 per share in the same period of 2019. On an adjusted basis, it posted a loss of 57 cents per share, narrower than the consensus forecast.

Revenue came in at $1.24 billion, down 63 percent from $3.34 billion in the year-ago quarter. Comparatively, analysts on average were looking for revenue of $1.2 billion. The drop in revenue was mainly attributed to the resurgence of Covid-19 cases in Q4, which resulted in renewed lockdowns around the world. Gross bookings, which accounts for all travel services booked by customers, plummeted 65 percent on a year-over-year basis to $7.3 billion in Q4.

Commenting on the quarterly performance, CEO Glenn Fogel said in a statement, “The travel environment continued to be challenging through the fourth quarter of 2020 and into January 2021 as COVID-19 case counts remained very high and travel restrictions were reimposed in many parts of the world. However, in recent weeks, we have started to see some improvements in booking trends that we will continue to monitor.”