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Booking Holdings, Q2 ‘26 Earnings Call, August 04, 2026
Room nights grew 5%, gross bookings rose 9%, revenue increased 8% and adjusted EBITDA grew 9%, all above guidance. Adj. EPS grew 15% y/y, faster than adjusted EBITDA growth, helped by a 6% reduction in average share count. The Middle East conflict hurt international flights through higher ticket prices and lower capacity, but travelers substituted toward domestic and regional trips rather than abandoning travel altogether.
The Connected Trip strategy continues to show real traction. Transactions containing more than one travel product—such as a hotel plus a flight or rental car—grew at a low-double-digit rate, more than twice as fast as Booking.com’s overall transactions. These connected bookings still represent only a low-double-digit percentage of transactions, so there is substantial room to increase the number of customers buying more than a hotel room.
Payments are the infrastructure that makes this possible. Merchant gross bookings—where Booking handles the customer’s payment rather than merely passing the reservation to the hotel—reached 73% of gross bookings, up four percentage points. Fogel called payments “the glue that brings it all together” because it lets Booking combine hotels, flights and other services into one transaction and manage refunds or service problems centrally.
The Genius loyalty program is another increasingly important defense against Google, Expedia and direct hotel bookings. Level 2 and Level 3 Genius members represented more than 30% of active customers but generated a high-50% share of room nights, meaning the most loyal customers book much more frequently than the average user. They also plan further in advance and are more likely to book directly through Booking rather than arriving through a paid advertisement. This lowers Booking’s dependence on external traffic sources and gives hotels a reason to participate because Genius members bring repeat demand.
The United States remains a large share-gain opportunity because Booking is still weaker there than in Europe. U.S. room nights grew at a high-single-digit rate, driven by domestic demand, and management said progress has come from the unglamorous work of adding inventory, fixing localized product gaps, improving service and marketing more effectively. Alternative accommodation room nights, 37% of Booking’s total, remain a particular weakness, growing only 4%, in part due to the Middle East conflict.
Google’s search-page changes—including AI-generated overviews—are reducing the amount of free traffic Booking receives from ordinary search results, but the damage is currently small. Search-engine optimization, or SEO, was never a large source of bookings, and Booking’s direct channel still accounts for roughly the mid-60% range of transactions. App usage is helping: the share of bookings made through the app has risen from the low-50% range two years ago to the high-50% range today. Management therefore sees no evidence that customers displaced from Google’s organic results are abandoning Booking in large numbers.
On LLMs: “If we look at the traffic we're currently receiving from large language models, so this is not what we are receiving directly in terms of traffic, but from large language models, both on a paid and an unpaid basis, that is still significantly below 1% of our room nights. That hasn't moved so much recently, so no material change over the last few months or quarters. I'm not saying that will never change in the future. This, of course, at some point, might go in a different trajectory. At this moment, it's still very minimal and is not really moving so much. Going a little deeper, the organic traffic, what we are receiving from the LLMs, we believe the vast majority is coming to us according to third-party data sources.”