In the face of global trade frictions and AI-driven changes, Booking Holdings (hereinafter referred to as Booking) has chosen to focus on profitability and product line expansion to meet challenges. This article analyzes its supply layout, product optimization, and regional advantages in Q1 2025, revealing how Booking can seize opportunities to control inventory resources and market rhythms in this platform competition.
Profitability Amid Slowing Revenue Growth
Since first breaking the 200 million room night threshold in Q3 2018, Booking has finally surpassed the 300 million mark, reaching 319 million room nights. Breaking it down by region, over 150 million room nights were destined for Europe, and about 80 million for Asia, indicating its significant influence in both regions. Any major shock outside these two areas would not severely impact Booking.
Amid geopolitical and retaliatory tariff influences, Booking has once again delivered a highly profitable quarterly report. Q1 revenue grew by 8%, adjusted EBITDA increased by 21% year-over-year, and EPS rose by 22%. In the post-pandemic recovery phase, Booking has successfully shifted from a market share growth model to a profitability growth model, winning over investors who value profit margins and cash flow. In fact, Booking has become a “safe harbor” for funds, absorbing technological dividends in a stable manner and maintaining cash generation capabilities, emerging victorious in the post-pandemic market’s capital allocation.
Alternative Accommodation Business
Shifting Airbnb’s Focus
Alternative accommodation remains Booking’s most important trump card against Airbnb. Showing expansion resilience at the structural level, alternative accommodation room nights reached 118 million in Q1, up 12% year-over-year, accounting for 37% of Booking’s total room nights, a new high.
This is not just about expanding supply but, as discussed in the Q4 earnings report by Haze Capital, Booking uses OTA thinking to integrate (especially individual) hotels into the AI platform — from algorithmic sorting to customer service modules, from multilingual content generation to dynamic pricing assistance, encouraging small and medium-sized operators to “get on board.”
From this perspective, although investors question Airbnb’s transition to “new services,” it is difficult to achieve high frequency and reach the MAU increase of 10 times that Chesky mentioned. Airbnb has no choice but to focus on high-ticket products/services and affluent groups for brand upgrading strategies to have more confidence in success.
New Strategic Signals for Connected Trip
Connected trip transactions grew by 35% year-over-year, higher than the room night growth rate of 7.2%. In the Connected Trip product line, while car rental growth was relatively weak at 7.7%, the growth rates for air tickets and attraction tickets were very high, at 45% and 92%, respectively. This is not just a signal of consumer product upgrades but also a sign of the platform’s intention to create a “one-stop” booking experience, another competitive battleground.
On this point, Booking’s vision for Connected Trip is no longer just a slogan but gradually reveals its business ambitions. It is conceivable that all AI under the Booking Group will eventually, like Kayak, shift from dominating hotel information to handling all product lines, similar to Trip.com’s TripGene.
Booking’s Connected Trip transaction volume this quarter has reached a high single-digit percentage of total transaction volume, i.e., in the range of $2 billion to $4 billion, which is already a significant scale. The transaction volume of “attractions and tickets” disclosed for the first time this quarter increased by 92% year-over-year. Although this can be seen as a surge from a low base, it also signifies another battle emerging from the supply side to the consumer side. In the past, the group’s inventory suppliers mainly redistributed through large leisure OTA platforms, but in the future, they may no longer be so accommodating.
Underlying Advantages in the European Home Turf
The OTA competitive landscape, redefined by geographical location amid the US retaliatory tariff situation, is a key focus this quarter. Expedia and Airbnb primarily target the US market, while Booking is rooted in Europe. This difference could be amplified under the potential implementation of US-EU retaliatory tariffs.
The US is currently suffering in three major areas: domestic tourism (affected by disposable income), inbound tourism (affected by foreign countries’ tourism boycotts), and outbound tourism (affected by disposable income). For Booking, whose main consumer destination is the European market, this is an excellent opportunity to widen the gap with latecomers through brand and member loyalty.
In this regard, Booking’s AI application strategies, such as smart filters, AI review summaries, and hotel Q&A modules, combined with the high room night share of higher-level members (Genius Level 2 and Level 3) exceeding 50%, are all increasing user stickiness on the platform.
Supply Chain Influence
The final point to note is that Booking’s dominance in the OTA field does not lie in its own technological strength but in the inability of other players to effectively block it. AI applications and supply chain integration are not insurmountable, but Booking uses its massive room night volume to force a balance with competitors through scaled operations, which is the most noteworthy aspect.
In other words: Retaliatory tariffs themselves will not significantly weaken the growth influence of competitors (Expedia and Airbnb), but if rivals cannot stop Booking’s output, then Booking will gain better bargaining power through the supply chain, making it even more difficult for competitors to catch up.
