Booking Holdings Raises Forecast as Travel Demand Holds

Booking Holdings delivered stronger-than-expected results for the second quarter of 2025, reporting robust growth across room nights, revenue, and gross bookings despite ongoing macroeconomic uncertainty. The company booked 309 million room nights in Q2, an 8% year-over-year increase, while gross bookings rose 13% to $46.7 billion and revenue climbed 16% to $6.8 billion. Adjusted EBITDA also surged 28% to $2.4 billion.

CEO Glenn Fogel attributed the performance to disciplined execution of Booking’s strategic initiatives and continued momentum in its connected trip vision. CFO Ewout Steenbergen noted that growth exceeded guidance by approximately two percentage points, driven by strong results in Europe, Asia, and the U.S., though unrest in the Middle East caused a 1% global drag in June.

Despite the U.S. remaining the company’s slowest-growing region, it saw modest improvement in Q2 compared to Q1. Steenbergen observed a decline in average daily rates, shorter booking windows, and reduced length of stay in the U.S., suggesting cautious consumer behavior. Inbound U.S. travel from Canada and Europe also fell, while corridors like Canada to Mexico and Europe to Asia saw increased activity.

Marketing expenses rose 10%, but Steenbergen said the company gained leverage due to a higher share of direct bookings and lower brand marketing costs. Direct channels, including the connected trip platform, are playing a larger role in Booking’s strategy. Connected trip transactions now represent a low double-digit share of Booking.com’s total bookings, up over 30% year-over-year, with flight ticket growth at 44%.

Fogel emphasized the importance of AI in achieving this progress. Enhancements to Priceline’s AI assistant Penny have expanded voice capabilities and improved user engagement and conversion. Kayak is also advancing its AI initiatives through Kayak.AI, focusing on greater personalization. Booking Holdings is collaborating with AI leaders such as OpenAI, Microsoft, and Amazon to accelerate its capabilities, particularly in agentic travel planning.

The connected trip model, powered by AI, is designed to deliver integrated multi-vertical bookings, improving customer loyalty and partner value. According to Fogel, users who book multiple travel products through Booking demonstrate significantly higher loyalty, reinforcing the importance of an end-to-end travel experience.

The company also provided an update on its ongoing transformation program. Booking realized $45 million in Q2 cost savings and expects $150 million in total savings this year, with $350 million in annual run rate savings projected long term. Transformation costs incurred in Q2 totaled $38 million, nearly all of which were excluded from adjusted results. Total transformation costs are estimated between $400 and $450 million.

While recent reports have surfaced about possible restructuring and layoffs, Booking.com confirmed that the company is reviewing its organizational structure to stay agile and support innovation in a competitive industry. The review is part of a broader strategic effort launched last year to streamline operations and strengthen long-term financial performance.

Despite uncertainty, Booking Holdings has raised its full-year guidance, citing steady travel demand and improved visibility into Q3, historically the company’s largest quarter for revenue and profit.

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Booking Holdings Raises Forecast as Travel Demand Holds

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