Booking CEO Says It Has a Plan to Compete With Airbnb
The travel industry dealt with its biggest challenge in generations in 2020, as Covid-19 kept people around the world locked down for much of the year. Revenue at Booking Holdings, the dominant owner of online travel agencies, fell 55% from 2019.
Beyond the overall slowdown, Booking (ticker: BKNG) has another problem. Investors are valuing the company at a discount to growing competitor Airbnb (ABNB) despite Booking's lead position in online travel — a sign that Wall Street may see its growth prospects as inferior.
In an interview after reporting earnings last week, Booking CEO Glenn Fogel said that the company has a robust platform of both traditional hotel rooms and alternative accommodations — the area that Airbnb is known for. In fact, Airbnb says it has 5.6 million active listings, while Booking says it has more than 28 million total listings and 6.2 million alternative listings, which include private houses and apartments that are rented out as vacation properties. Booking owns several travel sites, including Priceline.com, Kayak, and Agoda, along with its namesake brand.
Travelers booked $24 billion of accommodations on Airbnb in 2020, while it booked $35 billion on Booking. But Airbnb stock is worth $119 billion, while Booking is worth $95 billion. Even with less booking revenue and fewer accommodations, Airbnb gets more attention from investors because of its brand identity in the hottest part of the travel market.
