Overview

Investing.com reports that online travel booking platforms Booking Holdings (NASDAQ:BKNG) and Expedia (NASDAQ:EXPE) are experiencing slower travel growth as consumers become more cost-conscious and seek value-oriented vacations.

Revenue Trends

According to analysts at Truist Securities, revenue trends for U.S. leisure accommodations are generally flat to down year-over-year, primarily as consumers prioritize budget-friendly options. The analysts issued hold ratings for both Booking and Expedia after starting their coverage, noting the impact of moderating macro travel growth on these ratings.

Company Performances

Despite strong global market positions — Booking’s strength in Europe and Asia-Pacific and Expedia’s dominance in North America — both companies are implementing strategic initiatives aimed at enhancing growth and operational efficiency.

• Booking Holdings is focusing on:

  • Expanding non-lodging bookings through its “Connected Trip” strategy
  • Growing alternative accommodation offerings
  • Enhancing its Genius loyalty program

• Expedia Group is aiming to:

  • Simplify its corporate structure
  • Unify its loyalty program
  • Reduce dependence on performance marketing as part of a turnaround strategy

Analysts highlighted Expedia’s acknowledgment of rapid growth without reaping the benefits of scale, indicating ongoing internal transformation efforts for faster growth.

Challenges Ahead

Both companies face obstacles, with Booking experiencing stable average daily room rates in the first half of 2024, while Expedia’s Vrbo brand is struggling with changing travel patterns and legacy market challenges.

The analysts project mid-single-digit revenue growth through 2025 for both companies, which is a slowdown from previous historical growth rates.

Ratings and Price Targets

• Truist has given Booking a hold rating with a price target of $4,100.
• Expedia also holds a hold rating with a price target of $148.