Booking NASDAQ: BKNG reported first-quarter 2026 results it said reflected “solid execution” across its global business, while management noted the late-February start of a Middle East conflict weighed on travel demand and increased cancellations, particularly in March.
Q1 results and estimated conflict impact
CEO Glenn Fogel said the company booked 338 million room nights in the quarter, up 6% year over year and “in line with our prior expectations.” He added that Booking estimated the Middle East conflict reduced room night and gross bookings growth by about 2 percentage points. “Excluding this impact, we believe our room nights would have been up by approximately 8%,” Fogel said.
For the quarter, Fogel reported gross bookings of $53.8 billion, up 15%, revenue of $5.5 billion, up 16%, and adjusted EBITDA of approximately $1.3 billion, up 19%. Adjusted EPS was $1.14, up 14% year over year.
CFO Ewout Steenbergen said the conflict led to “elevated cancellations and a moderation in new bookings in March,” and that effects extended beyond the region, including changes in travel patterns along transit corridors such as between Europe and Asia. He reiterated the company’s estimate that the conflict reduced room night growth by about 2 points, with a similar impact on gross bookings, “a slightly lower impact on revenue growth and a higher impact on adjusted EBITDA growth.” Steenbergen said that excluding these impacts, Booking’s first-quarter growth rates would have exceeded “the high end” of its guidance ranges.
Steenbergen highlighted that March room night growth was 1% and estimated the conflict reduced March room night growth by about 6 percentage points, split roughly evenly between reduced bookings and increased cancellations. He said cancellations have “historically been the highest in the first month after the start of a conflict.”
Regional trends: U.S. acceleration and Asia momentum
Fogel pointed to the U.S. as an area where “intentional and targeted investments” are helping drive growth. He said U.S. room night growth accelerated for the fourth consecutive quarter to the low teens, driven primarily by strong domestic demand. Management also cited strength across flights, cars, and packages as part of its “connected trip” strategy.
Steenbergen said the U.S. growth acceleration coincided with resilience in Booking’s direct channels. He said the company’s B2C direct mix held steady in the mid-60% range over the past four quarters, supported by continued growth in direct bookers. He noted this was offset by the impact of the conflict (as the Middle East has “traditionally had above-average direct mix”) and continued declines in SEO traffic, which he described as “a small contributor to our overall direct channel.”
In Asia, Fogel said room night growth was in the high single digits, including low double-digit growth for travel within the region. He emphasized Agoda’s localized execution alongside Booking.com’s “global playbook,” and cited efforts to tailor product, payments, and go-to-market strategies by market. He also referenced distribution efforts through messaging and social platforms, naming KakaoTalk in Korea, LINE in Thailand and Taiwan, and WhatsApp in India.
Steenbergen’s regional breakdown included:
- Europe: up mid-single digits, with intra-regional demand up high single digits.
- Asia: up high single digits, with intra-regional demand up low double digits.
- Rest of World (including the Middle East): down low single digits.
Steenbergen also provided context on the region’s scale, saying Middle East bookers (including Turkey and Egypt) represented about 4% of global room nights booked in 2025, while including inbound travel brought the Middle East to about 7% of 2025 global room nights.
Connected trip, payments mix, and loyalty
Fogel said connected transactions—trips including bookings across more than one vertical—grew in the high-teens and represented a low double-digit percentage of Booking.com’s total transactions. Steenbergen added that connected trip transactions grew “about 3 times faster than Booking.com’s total transaction growth,” and said company data shows travelers who book more than one vertical “come back to us more frequently.”
Steenbergen reported that total merchant gross bookings rose 24% year over year, with merchant gross bookings representing about 72% of total gross bookings—up 5 percentage points versus last year. He described Booking’s merchant payments platform as “a core enabler of the connected trip vision,” adding it provides flexibility while contributing incremental revenue and margin dollars.
Management also discussed alternative accommodations. Steenbergen said alternative accommodation room night growth at Booking.com was about in line with total room night growth, and that alternative accommodations represented about 38% of Booking.com room nights in the quarter, up about 1 percentage point from last year.
Fogel highlighted Booking’s Genius loyalty program as a key component of its strategy, describing it as focused on “immediate relevant benefits” such as tiered discounts and free breakfast. He said that over the last four quarters, Level 2 and Level 3 Genius members represented over 30% of Booking’s active base and accounted for a “high 50% share” of room nights, up from the prior year. In Q&A, Fogel said the company sees an opportunity to “further strengthen Genius this year,” but did not provide specifics, adding that details would be shared when ready.
AI initiatives and partnerships
Fogel said the company views generative AI as a “significant opportunity” across traveler and partner experiences, internal efficiencies, and distribution. He discussed Priceline’s “Penny” as an AI-driven journey that supports conversational search and brings multiple products into “a single integrated view.” Fogel said that in “very early testing from a small sample set,” users who engaged with Penny showed a “noticeable uplift” compared with non-Penny users.
At Booking.com, Fogel said the company is rolling out AI-driven capabilities earlier in the funnel, including enhanced natural language search and inspiration-led discovery features. He said “smart filters have now been rolled out globally in accommodations,” and the company is beginning to extend and test those capabilities in cars.
Steenbergen added that the company is tracking multiple indicators beyond conversion, including “faster search,” a “shorter path” to booking, lower cancellation rates, customer satisfaction, and engagement, which he said were trending positively, while also stressing the limited sample size. He also noted that Penny can now complete bookings directly, which he contrasted with some other AI travel planning tools.
On the competitive landscape, Fogel said Booking is “incredibly excited” about its positioning with major AI players and suggested a shift toward performance marketing models could be advantageous. He cited relationships with companies such as OpenAI, Google, Anthropic, and Amazon, and said AI could help expand the overall market for digital travel bookings.
Expenses, cash flow, and capital returns
Steenbergen said first-quarter revenue as a percentage of gross bookings was 10.3%, up about 10 basis points year over year, driven by differences in how the conflict affected revenue versus gross bookings. Because Booking recognizes revenue at the time of travel, he said the revenue impact from the conflict “will not be fully realized until future quarters.”
Marketing expense increased 16% year over year, and marketing as a percentage of gross bookings was 3.8%, up 4 basis points. Steenbergen attributed the year-over-year increase primarily to conflict-related cancellations on paid-channel bookings, and said excluding the conflict impact the company would have had marketing leverage supported by improved efficiencies.
Steenbergen said adjusted sales and other expenses as a percentage of gross bookings was 1.5%, similar to last year, despite an increase in merchant mix. He cited customer service efficiencies and a $17 million one-time benefit tied to the repeal of the Canadian Digital Services Tax in March. Adjusted fixed operating expenses increased 14% year over year, which he said was leverage as a percentage of revenue; when normalizing for FX and $53 million of one-time benefits in the prior year quarter, he said constant-currency adjusted fixed expenses grew in the low single digits.
He said Booking remained on track to deliver $500 million to $550 million of in-year savings from its 2026 transformation program, and reported $25 million of transformation costs in the quarter, “almost entirely excluded” from adjusted results.
On capital allocation, Fogel said the company repurchased a record $3.6 billion of shares in the first quarter and has reduced share count by over 40% since 2014, even after stock-based compensation dilution. Steenbergen said quarter-end cash and investments were $16.5 billion, down from $17.8 billion at the end of Q4, primarily due to about $4 billion of capital return, including $3.6 billion in repurchases and a $343 million dividend. He added the company repurchased an additional $355 million in shares to satisfy employee withholding tax obligations. Free cash flow was about $3.1 billion, aided by about $1.9 billion in working capital changes driven by seasonal increases in deferred merchant bookings.
Guidance: Q2 headwinds and full-year assumptions
For the second quarter, Steenbergen said the company assumes the direct and indirect impacts from the Middle East conflict continue through the end of June. He said Booking has begun targeted cost management actions, including stricter control of discretionary spend and recalibrating “business-as-usual hiring,” while aiming to protect strategic investment spending.
Steenbergen said the company expects the conflict’s headwind to be about 3 points in the second quarter, and that it assumes ADRs will be “slightly down” as a consequence of the situation. Booking’s Q2 guidance calls for room night growth of 2% to 4%, and gross bookings, revenue, and adjusted EBITDA growth each of 4% to 6%. He also said the company expects foreign exchange to add about 2 percentage points to reported U.S. dollar growth rates in Q2, based on recent rates including a euro/dollar exchange rate of 1.16.
For full-year 2026, Steenbergen said the planning assumption is for impacts to continue through the end of June, followed by a recovery in the second half. He said Booking lowered guidance ranges at the midpoint, while noting the “high end” of gross bookings and adjusted EPS ranges remained in line with prior expectations. Reported full-year expectations include:
- Gross bookings: up high single digits to low double digits
- Revenue: up high single digits
- Adjusted EBITDA: growth slightly faster than revenue; margin expansion of 0 to 25 basis points
- Adjusted EPS: up low to mid-teens
Steenbergen said the company has not included potential extended macro effects—such as inflationary pressures, jet fuel price fluctuations, airline capacity reductions, or broader sentiment impacts—in its guidance due to uncertainty. He reiterated Booking’s long-term constant-currency growth ambition for future years of at least 8% gross bookings growth, 8% revenue growth, and 15% adjusted EPS growth.
In closing remarks, Fogel said the company has navigated prior crises and remains confident in “enduring resilient demand for travel,” adding that Booking will stay focused on initiatives it can control, including the connected trip, AI innovation, and market expansion efforts.
About Booking NASDAQ: BKNG
Booking Holdings Inc is a global online travel company that operates a portfolio of consumer brands and technology platforms that facilitate the search for and booking of travel services. The company's businesses focus on accommodations, transportation and related travel services through consumer-facing websites and apps as well as partner distribution channels. Booking Holdings was originally founded as Priceline in the late 1990s and adopted the Booking Holdings name in 2018; it is headquartered in Norwalk, Connecticut.
Its core offerings include online reservations for hotels, vacation rentals and other lodging; flight and car rental search and booking; and ancillary services that support travel planning and on-property experiences.
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