EUR 850.00 For Business Accounts Only

Morningstar | BKNG Updated Forecasts and Estimates from 13 May 2019

We expect Booking Holdings’ global online travel agency leadership position to expand over the next decade, driven by a superior position in China, continued leadership in Europe, and an expanding presence in vacation rentals, restaurant bookings, and attractions, all of which are backed by leading marketing and technology scale. We see the firm's global share of the $1.7 trillion total travel bookings reaching 7% in 2023 from 5.5% in 2018. Booking has built a leading network of hotel properties and other services, which drives an increasing user base. We see this network effect continuing to expand in both developed and emerging markets, as well as vertical markets such as vacation rentals. In developed markets, replicating Booking’s leading network in Europe is proving costly and time consuming for key competitors, given around 65% of all hotels in the region are small boutique establishments. In emerging markets, the firm is expanding its leadership in China with its Ctrip and Meituan-Dianping partnerships, and in its own booking.com and Agoda.com platforms, which is crucial, as we see the Asia-Pacific region representing around one third of total industry online booking growth over the next five years. In addition, the acquisitions of Kayak, OpenTable, and Momondo extend the network globally.This expanding network positions Booking well for the increasing global shift to booking via mobile applications. Booking.com is a top-10 travel application in 115 markets around the world, while Expedia is a top-10 travel application in 22 countries, and metasearch company TripAdvisor is a top-10 travel app in 19 countries, according to App Annie on May 9.Companies that pose the main risk already have the customer traffic and budgets to replicate the network Booking has built. Focused entry from Google, Facebook, Amazon, and others could double the current handful of players that have dominant scale, leading to commodification of the industry and a meaningful impact to profitability. That said, replicating Booking’s network would require significant time and expense.