3. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) is an American travel technology firm. Michael Burry of Scion Capital Management acquired a stake in Booking Holdings Inc. (NASDAQ:BKNG) in the first quarter of 2022, buying 8,000 shares worth $18.7 million, representing 9.32% of the total holdings. He dumped his position in the next quarter.
On August 5, Susquehanna analyst Shyam Patil lowered the price target on Booking Holdings Inc. (NASDAQ:BKNG) to $2800 from $2900 and maintained a Positive rating on the shares. The analyst observed that travel demand was robust in Q2, with room nights outpacing 2019 levels for the first time. He said trends have softened slightly into July, but some modest volatility in the travel recovery is not surprising, especially considering the macro backdrop.
According to Insider Monkey’s data, 99 hedge funds were bullish on Booking Holdings Inc. (NASDAQ:BKNG) at the conclusion of the March quarter, up from 92 funds a quarter earlier. Harris Associates owned a significant stake in the company in Q1 2022, comprising 665,415 shares worth $1.5 billion.
Here is what LRT Capital Management has to say about Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2022 investor letter:
“Booking Holdings was formerly Priceline.com but has changed its name to reflect that source of most of its revenue: Booking.com. Booking.com is the largest online travel agency (OTA) in the world, connecting travelers and hotels. The company has over 2.3 million properties in 220 countries on its site, along with photos, reviews and details about the amenities offered by each property. The accommodations offered range from hotels, motels, homes & apartments, hostels, and bed & breakfasts. The company occupies a dominant position in the travel booking funnel and collects revenue from hotel reservations booked through its site. Booking.com is particularly strong in Europe, where chain hotels are less dominant and smaller independent hotel rely on it to fill their rooms.
In addition to Booking.com, the company owns agoda.com, priceline.com, rentalcars.com, OpenTable and the KAYAK flight search engine. Hotel bookings account for most of the revenue, but the company also offers car rental reservations, flights, vacation packages, cruises, tours, airport taxis, etc.
The company benefits from economies of scale in its investments in technology, national advertising, and customer loyalty programs. The business also has enormous network effects, as consumers are most likely to use a booking platform with the most properties, broadest availability of reviews and strong customer service. This in turn drives hotels to make their room inventory available on booking.com, which drives most of the reservation traffic for many boutique hotels, thus reinforcing the network effect. Of note, Booking.com operates two models: the agency model, where the company simply acts as an agent for a hotel and collects a fee, and the merchant model, under which Booking.com buys the room-night from the hotel, but then retains the ability to optimize the pricing on the room.
Also of note is the fact that the acquisition of Booking.com by Priceline.com is amongst the most successful and value creating M&A transactions of all time.”
