Chief Financial Officer at Booking
Thank you, Glenn and good afternoon. I'll review our results for the third quarter and provide some color on the trends we've seen supply in the fourth quarter. All growth rates for 2022 are relative to the comparable period in 2019, unless otherwise indicated. Information regarding reconciliation of non-GAAP results to GAAP results can be found in our earnings release.
Now on to our results for the third quarter. In the third quarter, we were encouraged to see room night growth improved to 10% in both August and September, up from the 4% room night growth we previously reported for the month of July. All regions improved in August and September relative to July. For the full third quarter, global room night growth was 8%, with Europe up high single digits, the U.S. up almost 30% and Rest of World up over 10% and Asia down mid-single digits. And September was the first month of room night growth in Asia versus 2019 as the delayed recovery continues in that region. Our mobile apps represented about 45% of our Q3 total room nights, an increase of slightly over 40% in the second quarter. Total mobile bookings represented over 60% of our total room nights in the third quarter, also an increase from the second quarter.
In the third quarter, we continue to see increasing mix of our total room nights turning to us to our direct channel versus 2019 and also versus Q3 2019 and also versus Q3 2021. The international mix of our total room nights in Q3 was about 45%, in line with Q2. Our Q3 cancellation rates continue to be below 2019 levels as they were in Q2. In Q3, the booking window of Booking.com remain shorter than in 2019, similar to what we saw in the second quarter of 2022. This booking window expanding meaningfully versus the third quarter of 2021, where we saw a higher mix of near-end bookings due to the COVID-19 Delta variant wave. For our alternative accommodation in a Booking.com, our room night growth rate was 11% in Q3 versus 2019 and the goal mix of alternative accommodations was about 30% which is slightly higher than Q3 2019. Q3 global mix was about in line with 2021.
Q3 gross bookings increased 27% versus 2019 or 41% on a constant currency basis. The 27% increase in gross bookings was 19 percentage points better than the 8% room night increase due to 28% higher accommodation constant currency ADRs and also due to 4 points from strong flight growth bookings across the group, partially offset by the 14% points of negative impact from FX movements.
Our accommodation constant currency ADRs benefit by about 2 percentage points from regional mix and about 26 percentage points from rate increases across all of our regions, most notably in Europe and North America. Despite the high ADRs in the third quarter, we have not seen a change in the mix of wholesale star ratings being booked or changes in length of stay that could indicate that consumers are trending down. We'll continue to watch closely. Airline tickets booked in the third quarter were up about 235% versus a smaller base in 2019 and up 45% versus 2021, driven by the continued expansion of Booking.com's flight offering. Revenue for the third quarter was over $6 billion which was up 20% versus 2019 and up about 34% on a constant currency basis.
Revenue as a percentage of gross bookings was about 110 basis points below Q3 2019 due to a number of factors, including investments in merchandising which are consistent with our prior commentary about the opportunity for us to lead into a recovering travel market in 2022 and also due to an increase in the mix of flights, the slower recovery of our advertising and other revenues which have no associated gross bookings and some negative impact from FX rates. Q3 take rates were down more than our expectation of being down about 70 basis points, primarily due to timing differences between gross bookings and revenue recognition, driven by the improved bookings in Q3, some of which relate to travel in future quarters. Our underlying accommodation take rates were about in line with Q3 2019 levels.
Marketing expense which is a highly variable expense item, increased 27% versus Q3 2019. Marketing expense as a percentage of gross bookings was about in line with Q3 2019 which was better than our expectations, mainly due to higher-than-expected direct mix. As expected, our marketing ROIs were lower than in Q3 2019 which was in line with our strategy to lead into a recurring travel market in the Q3 peak season. Sales and other expenses as a percentage of gross bookings were up about 40 basis points compared to Q3 2021 which was in line with our expectations. About 40% of Booking.com's gross bookings are processed through our payments platform in Q3, up from almost 1/3 in Q3 2021. Our more fixed expenses in aggregate were better than our expectations of 17% versus Q3 2021, primarily due to a slower-than-expected ramp into our IT expenses and lower-than-expected personnel expenses.
Adjusted EBITDA was $2.7 billion in the third quarter which is better than our expectations and about 7% above 2019 and would have been about 25% above 2019 on a constant currency basis. Non-GAAP net income of $2.1 billion results in non-GAAP earnings per share of about $53 per share which was up 17% versus Q3 2019. On a GAAP basis, we had operating income of $2.6 billion in Q3. We recorded GAAP net income of $1.7 million in the quarter which includes a $336 million unrealized loss on our equity investments, primarily related to Meituan as well as $125 million expense related to an ongoing French tax matter.
Now on to our cash and liquidity position. Our Q3 ending cash investment balance of $11.8 million was down versus our Q2 ending balance of $14.2 billion, primarily driven by about $2 billion in share repurchases in Q3 as well as the unrealized losses on our equity investments. The $2 billion in share purchases in Q3 was a step-up from the $1.3 billion in Q2 as we increased the pace of our repurchases given the pullback in our share price. In October, we repurchased another $595 million worth of our shares which brings our year-to-date repurchase up to about $4.8 billion and our remaining outstanding authorization to about $5.6 billion.
As Glenn mentioned, we reduced our share count by 5% since the end of last year. And over the last 5 years, we reduced our share count by 20% despite suspending our share buyback activity for 21 months during COVID-19 pandemic.
With negative $95 million in free cash flow for the third quarter, our earnings for the quarter were offset by about a $2 billion decrease in our deferred merchant booking balance following the peak travel season in Europe and North America.
Now on to recent trends on our fourth quarter. We estimate that October room night increased about 12% versus 2019, a slight improvement from the 10% growth in September, driven primarily by the continued recovery in Asia as well as a slight improvement in Europe. In October, all regions were above 2019 levels. The U.S. was of almost 35%, Rest of World was up high teens and both Asia and Europe were up high single digits. ADR growth has remained around Q3 levels and we estimate gross bookings were up about 30% in October which includes negative impacts from FX pressures. We estimate that constant currency gross bookings were up just over 45% in October.
While there continues to be uncertainty in the near term, our comments for the quarter make the assumption that room night growth for the fourth quarter will be about 10% above 2019 which is in line with levels of growth we've seen over the last 3 months. Compared with room night growth in Q4 versus 2019 would also be an acceleration on a year-on-year basis from 31% growth in Q3 2022 versus Q3 2021 to 39% growth in Q4 '22 versus Q4 '21. We expect the strength in ADRs we've seen in recent months to generally continue for the remainder of the fourth quarter as well as continued growth in by bookings. We expect about a 15% difference between the level of room night growth and gross booking growth, less than 19% gap in Q3 due to more FX pressure in Q4. We expect FX to pressure gross bookings growth versus 2019 by about 18% in Q4.
We expect Q4 revenue as a percentage of gross bookings to be about 120 basis points lower than Q4 2019 due to investments in merchandising, an increase in mix of clients and negative impact from timing differences between gross bookings and revenue recognition. We expect Q4 marketing expense as a percentage of gross bookings to be a bit higher than in Q4 2019 as we expect to continue to invest in capturing demand and increasing awareness due to continued global recovery of travel demand. We expect Q4 sales and other expenses as a percentage of gross bookings to be about 40 basis points higher than Q4 2021 due to higher merchant gross bookings mix and higher third-party call center costs, including the impact of our partnership with Majorelle. We expect our more fixed expenses in aggregate will be about 20% higher than in Q4 2021, with personnel, G&A and IT each up similar percentage year-on-year.
Taking all into account, we expect the Q4 adjusted EBITDA to be over $1.1 billion. If it were not for the impact of FX, we expect Q4 adjusted EBITDA to be above Q4 2019. We are maintaining our full year adjusted EBITDA margin commentary and still expect EBITDA margin for 2022 to be a few points higher than in 2021. And if not for the impact of timing, our expectations for the full year adjusted EBITDA margins would be higher by another few points.
For the full year, we expect our revenue as a percentage of gross bookings to be just over 14%, lower than our prior expectations for mid-14% range, due primarily to timing differences between gross bookings and revenue recognition, driven by stronger bookings than previously expected, some of which are related to travel expected to occur in 2023. Compared to the 15.6% take rate in 2019, the expected take rate in 2022 includes almost a full point of noted impact from timing, about 40 basis points from a slower recovery in advertising and other revenue which have no associated gross bookings and about 30 basis points from increased mix of flights.
The benefit to take rates in 2022 from increased revenues associated with payments is offset by our increased investments in merchandising, each of which impacts our reported take rates by about 1% in 2022 compared with about 0.5% each in 2019. These changes in payment revenues and merchant costs versus 2019 are mainly on Booking.com.
Looking forward into window months, the booking window continues to be shorter than it was in 2019 which means that we would expect lower levels of future stays already on our books. Given this, we are pleased that the gross bookings we've already received at Booking.com for in Q1, up about 25% in euros versus the same time in 2019. Of course, we note that high percentage of these bookings are cancellable. While this represents a relatively small percentage of the total revenue we record in Q1, we think it's a helpful early data points to share.
In closing, we're pleased with our Q3 results and the trends that we're seeing into Q4 and early into 2023. We remain confident that our strategic priority is the right ones and will enable us to provide better travel services for our customers and partners.
We'll now move to Q&A. And Sylvie, can you please open the lines?