Booking (BKNG) - 2025 Nasdaq Investor Conference
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Booking Holdings Inc.
Nasdaq Morgan Stanley London TMT Conference Presentation
Date: December 9, 2025 • 9:30 AM GMT
Management Present:
Ewout Lucien Steenbergen – Executive VP & Chief Financial Officer (from participant list, pg. 2 )
Summary Categories
1. Summary of Recent Results & Business Momentum
“We’re growing faster in flight tickets than any airline... faster in rental car days than any rental car company... faster in Attractions...”
“Connected Trip transactions... we are growing all of these things faster than the stand-alone category players.”
Direct channel strength in the U.S. stood out as the most important Q3 datapoint: “We saw an inflection point in the U.S. direct channel... a very, very healthy indicator for the future.”
Asia remains a strong engine: “We are the largest technology travel platform outside of Mainland China by really a length.”
Alternative accommodations continue to outperform traditional hotels: “Alternative Accommodations… will continue to outgrow our Traditional Accommodations.”
2. Financial Performance (Required Section)
Booking reiterated confidence in its growth model: “The framework… we call 8%, 8%, 15%.”
“This year, on a constant currency basis, we will be exceeding the 8%, 8% and 15% according to our latest guidance.”
Q3 operating leverage demonstrated: customer service costs were down slightly YoY, despite high-single-digit booking unit growth.
“Customer service cost in the third quarter were… slightly down year-over-year over high single digits booking unit growth.”
Efficiency improvements supported by AI have already started appearing directly in the P&L.
3. Guidance & Long-Term Growth Framework (Required Section)
Long-term algorithm:
8% gross bookings growth
8% revenue growth
15% EPS growth
“We’re confident that we will continue to achieve those metrics at those levels over the next few years.”
Growth drivers behind the 8% top line target:
GDP-plus travel industry growth
Offline → online shift (“more than 30% of the market is still offline”)
Expansion in new verticals: flights, attractions, rental cars, payments
$170M targeted growth investments
Generative AI commercial uplift
4. Generative AI & Agentic Platforms
AI expected to expand the travel TAM: “There will be a faster shift from offline to online travel.”
CFO sees multi-agent ecosystem as an opportunity, not a threat:
“There will be 4, 5, 6 different winners from a large language model perspective… more diversification.”
Booking’s advantage: big-scale optimization models for performance marketing across many channels.
Booking building end-to-end agentic travel experiences:
Pre-trip: AI itinerary planning, dynamic rebooking
In-trip: “Shouldn’t we flip your itinerary around? We see you don’t have a restaurant reservation...”
Post-trip: loyalty and retention
Early product tests show:
Higher conversion
Faster time to booking
Lower cancellation rates
5. Customer Service, AI Productivity & Cost Structure
AI has produced material P&L savings already in 2025:
“Contact rate has come down a lot.”
“Resolution time has really become much faster.”
“Average cost per booking is coming down very rapidly.”
Customer satisfaction also improved: “Customer satisfaction scores have gone up.”
Enterprise-wide transformation program increased target to $550M: “We have increased the target to $500 million to $550 million.”
6. Capital Allocation, Buybacks & Dilution (Required Section)
EPS growth target (15%) requires:
Operating efficiencies
Share repurchases
Buyback philosophy includes both systematic and tactical components:
“We scale up and down by quarter based on the 10b5-1 grid and there is price sensitivity in that grid.”
Q3 buybacks were $700M, but expected to rise in Q4 following share price dislocation.
Strong free cash flow and cash balances enabling ongoing returns.
7. U.S. & International Trends (with Emphasis on Alternatives)
Significant U.S. progress:
“We outgrew the U.S. in general from a room night perspective in the third quarter by quite a wide margin.”
Alternative Accommodations:
“We have now outgrown the largest player… for 17 out of the last 18 quarters.”
Supply growth 10% YoY in last quarter.
Becoming a truly global category for Booking.
OpenTable international expansion accelerating:
“OpenTable is doing really well and is seeing some very healthy growth.”
8. Marketing Efficiency & Channel Evolution
Social marketing breakthrough in 2024–25:
“We were able to crack a little bit of code with Social.”
Meta partnership enabled incrementality measurement.
New paid channels bring younger demographics.
Booking uses strict scientific ROI / incrementality testing:
“We need to be able to measure that the customer would not have booked anyhow with us.”
10 Notable Full Quotes (Copy-Paste Ready)
“We’re growing faster in flight tickets than any airline… faster in rental car days than any rental car company.”
“We are the largest technology travel platform outside of Mainland China by really a length.”
“This year, on a constant currency basis, we will be exceeding the 8%, 8% and the 15% according to our latest guidance.”
“Alternative Accommodations... will continue to outgrow our Traditional Accommodations.”
“We saw an inflection point in the U.S. direct channel… a very, very healthy indicator for the future.”
“There will be 4, 5, 6 different winners from a large language model perspective… more diversification.”
“Contact rate has come down a lot… resolution time has really become much faster… The average cost per booking is coming down very rapidly.”
“Customer satisfaction scores have gone up.”
“We have increased the target to $500 million to $550 million.”
“We scale up and down by quarter based on the 10b5-1 grid and there is price sensitivity in that grid.”
Q&A Summary
Q: Brian Nowak (Morgan Stanley) — What is the biggest misunderstanding about Booking after 1.5 years?
A: Steenbergen highlights two: the strength of the network effect (direct customers, loyalty levels, cross-vertical growth) and Asia, where Booking is the largest non-China travel tech platform with very strong momentum.
Q: Explain the 8%, 8%, 15% framework and sources of upside/downside.
A: Steenbergen reiterates the algorithm and cites travel GDP-plus growth, offline → online shift, new verticals, $170M growth investments, and GenAI as drivers. Confident in sustaining the model.
Q: How do you budget annual investments (Asia, Alternatives, etc.) while maintaining growth targets?
A: Booking uses a disciplined model: efficiency targets create capacity to invest. Dollars are allocated explicitly to top strategic priorities, not scattered across mediocre opportunities.
Q: What are the biggest buckets of the $170M investment fund?
A: Attractions, advertising, OpenTable international expansion, Asia tech/supply, and generative AI tools such as AI trip planning.
Q: How are you investing in Alternative Accommodations?
A: Continued supply expansion (+10% YoY), focus on professionally managed → individual hosts, booking path integrated with hotels, and outsized U.S. opportunity.
Q: Is generative AI a threat that wedges between OTAs and travelers?
A: Steenbergen argues the opposite: TAM expansion, diversified LLM ecosystem, and Booking’s strength in optimization models. Direct channel can be strengthened by agentic experiences across pre-trip, in-trip, and post-trip flows.
Q: What early signals are you seeing from AI planning tools?
A: Higher conversion, faster time to booking, lower cancellation rates.
Q: How is AI improving customer service and operating costs?
A: Contact rates down, resolution faster, cost per booking down, and customer satisfaction up. Transformation program raised to $550M.
Q: What has changed in social marketing?
A: Breakthrough in ability to measure incrementality (Meta environment). Younger demo acquisition. Systematic scientific ROI testing.
Q: Philosophy on capital allocation and share count reduction?
A: EPS algorithm requires efficiencies + buybacks. Strong FCF supports dividends and buybacks. Tactical use of 10b5-1 grid increases purchases when share price dislocates.
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