Booking has 6.5 million listings in the alternative accommodation space. In the U.S., “alternative accommodations grew low double digits [in the 3Q], whereas the rest of the business or the core business grew low single digits,” according to Booking CFO David I. Goulden.
Booking.com said on the earnings call with analysts yesterday that improving global trends from April to July flattened in August and September, with further deceleration for the rest of 2020.
Alternative accommodations accounted for one-third of the company’s new bookings in the third quarter and around 40% of bookings in the second quarter. This increase in the mix of customers booking alternative accommodations moderated in September and October. Expedia is seeing a similar softening in its Vrbo business.
The company acknowledged that it doesn’t have enough inventory of individual homes in the U.S., “so the strategy is to continue to build that out and make sure that we’re offering the customer what they want, when they want it.”
Despite improved results in the third quarter, the outlook for the rest of the year is bleak given the current rise of Covid cases and renewed government restrictions. Booking expects November and December to be worse than October. The company is forecasting a loss for the fourth quarter.
Unfortunately, as we moved into September, we saw COVID case counts climbing higher in many European countries, and governments beginning to respond with the imposition of travel restrictions. This difficult pattern continued throughout the month of October, leading to a further slowdown in bookings in Europe. In October, we also saw a slowdown in North America, while the room night decline in Asia remained consistent with Q3. And as a result, global newly booked room nights through October were down about 50% year-over-year and reported room nights for October were down about 58%. Over the last seven days through yesterday, these trends have further deteriorated with newly booked room nights declining about 58% year-over-year and reported room nights declining about 70% year-on-year. This is the global average, and in Europe, these decline rates are much higher. These recent trends are a reminder that this is a fragile recovery and that we’re now seeing a second dip in our business driven by COVID.
We believe that the recent increase in COVID cases in Europe and the U.S., coupled with cold weather and travel restrictions in these geographies, will result — likely result in the second dip being U-shaped and lasting until the early spring of 2021.David I. Goulden — Executive Vice President and Chief Financial Officer
There has been an upward trend for alternative accommodations for some time now, but its adoption accelerated – people are trying it earlier – due to Covid, according to Booking CEO Glenn Fogel.