Booking Holdings Set to Ride Upsides of Europe and China Trends in 2023
25.08.2023 - 14:30
/ skift.com
At various junctures during the pandemic, Booking Holdings faced difficulties because of the weakness of the euro and China’s shuttered borders but now stands to make strides because of favorable foreign exchange trends and China’s travel reopening.
That could bring a larger upside for Booking in 2023 compared with Airbnb and Expedia Group because Booking has larger businesses in Europe and China outbound than its two rivals, according to a BTIG research note Tuesday.
The more favorable exchange rate trend, with inflation cooling in Europe, could help to mitigate adverse trends such as the 14-point foreign exchange rate hit that Booking Holdings experienced during the third quarter, which ended September 30.
Bookings in Europe and the UK for Booking Holdings could increase around 4 points this year compared with 1-2 points for Airbnb and Expedia, the note said.
In addition, Booking Holdings, with its Booking.com and Agoda brands, saw a mid-single digit percentage of its room nights pre-pandemic sourced from Chinese outbound travelers, compared with low-single digits from its two rivals, and Booking could see a 1-2 percentage point boost from China.
“Together, we estimate that the two tailwinds [for Booking Holdings] could add 5-6 points to 2023 bookings growth versu. 2-3 points for Airbnb and Expedia,” BTIG stated.
Even as China’s Trip.com Group reported that bookings for outbound flights from mainland China increased by more than 250 percent on December 27, compared to a day earlier, following the government’s reopening announcement, travel companies know better than to expect that reopening day January 8 will immediately open the floodgates for Chinese tourists.
China’s Ministry of Culture and Tourism reported that there were 52.71 million domestic trips over the recent New Year holiday — as opposed to the upcoming Lunar New Year January 1 — produced 26.52 billion yuan ($3.84 billion) in sales, and that was a 4 percent increase compared to the same period a year ago, according to Reuters. But that $3.84 billion amounted to only 35 percent of 2019, before Covid-19 changed the world.
China domestic tourism — and Trip.com Group, among others — might be the winner in the short run as wary destinations aren’t really laying out the red carpet for Chinese tourists given the spike in Covid-19 infections there since the abandonment of the zero-Covid policy. Some countries, including the UK, Canada, Spain, Australia, India, the U.S. and France are reintroducing compulsory pre-flight Covid-19 tests for arrivals from China.
Others, such as Japan and Italy, require on-arrival tests while Morocco has announced an outright ban on travelers coming from China.
Airbnb might have benefited from a resurgence in