Booking Holdings Looks to Pull Away from Airbnb on Profit Margins
Photo Credit: Pictured is a Spring Airlines A320 bedecked as Booking.com as seen on July 7, 2018. Booking sees flights as key to its connected trip strategy. Flickr.com / Kwok Ho Eddie Wong
Skift Take
As part of its "connected trip" and loyalty strategy, Booking Holdings argued it can convince hotels and other partners to offer up substantial discounts and perks, and this would spur incremental bookings. But do hotels really want to be a cog in building the Booking.com brand?
Booking Holdings Chief Financial Officer David Goulden said it twice: The company is focused on achieving "industry-leading" profit margins in 2023 or when Covid recedes, and the world gets back to a semblance of "normal."
That's somewhat of a challenge to Airbnb, which had an exemplary 2021. In his comments, Goulden did not mention Airbnb specifically. In 2021, Booking Holdings had the adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) edge.
Excluding stock-based compensation for both companies, Booking had the higher adjusted EBITDA margin at 29.9 percent compared with Airbnb's at 26.6 percent.
When including stock-based compensation for both companies, the gap was even wider: Booking's was 26.5 percent compared with Airbnb's at 11.6 percent.
On a GAAP (generally accepted accounting principles) basis on net income margin, Booking (10.6 percent) had a wide lead over Airbnb (-5.9 percent).
In essence, officials from Booking Holdings, which has overtaken Airbnb in market cap $101 billion to $95 billion, were saying what's all the fuss about Airbnb being the blockbuster company of the moment? We are building a juggernaut, as well.
"Looking beyond 2022, we continue to remain focused on investing to build a larger and
