Booking and Airbnb Have a $22 Billion Wad of Cash — How Will They Spend It?

25.08.2023 - 14:05 / skift.com / Dennis Schaal / David Goulden

Four major online travel companies had around $34 billion in cash and equivalents on the books at the end of 2022 — and that’s considerably more liquid dinero than they had at the end of pre-Covid 2019.

Share repurchases, which boost shareholder value, are definitely high on the agenda in 2023 for most of these companies even though these transactions became a flashpoint because of all the employee firings they carried out leading up to and during the height of the pandemic. Investor Warren Buffet has a different view on share repurchases.

But beyond the share repurchases, Booking Holdings, Airbnb, Trip.com Group and Expedia Group, among other online travel companies, have substantial monies on the books for merger and acquisition activity, and other investments in growth and technology.

Booking Holdings had the largest rainy day fund at $12.2 billion at the end of last year, and added $1.4 billion to the stockpile this month by completing the sale of its shares in China’s delivery app and hotel aggregator Meituan. Airbnb was cash rich with $9.6 billion, Trip.com Group had $8.7 billion when it last reported its cash trove as of September 30, and Expedia Group coveted $4.1 billion. (See accompanying chart.)

Online Travel Companies’ Cash and Cash Equivalents as of December 31, 2022 versus 2019

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What are Booking Holdings, Airbnb, Trip.com Group and Expedia Group, among others, going to do with their riches?

With $12.2 billion of cash and cash equivalents on the books as of the end of last year, and $1.4 billion added to the cash cushion this month from its Meituan share sale, Booking Holdings has plenty of strategic options.

Mergers and acquisitions — one in particular — are definitely on Booking Holdings’ agenda in 2023 if it can get the regulatory go-ahead in Europe. In November 2021, the company announced its intent to acquire its flight technology partner, Sweden’s Etraveli Group, for around $1.7 billion, but the European Commission is still mulling the deal. By all accounts, subsidiary Booking.com’s several years old flights business, which is available in more than 50 countries, is going strong, and the acquisition would further its so-called connected trip strategy.

Share repurchases are a Booking priority. It has $3.9 billion left on a $15 billion share repurchase authorization, and after that intends to get started on a new $20 billion go-ahead from its board of directors.

“We expect to complete the share repurchases under a cumulative $24 billion authorization within the next four years, assuming that travel continues to recover and grow from here,” Chief Financial Officer David Goulden told analysts last week.

That leaves plenty of room for additional acquisitions, which of course