Booking Holdings Q2: Revenue Beats, But Room Nights Grow Slowest in Six Quarters

Room night growth at the world's largest online travel company slowed to 5% in the second quarter, the weakest rate in six quarters, even as revenue and profit came in ahead of what analysts expected. For operators listing on Booking.com, Agoda or Priceline, the split matters: money moving through the platform is growing faster than the number of stays being booked.

Booking Holdings reported 325 million room nights for the three months to June 30, up from 309 million a year earlier. Gross bookings reached $51.0 billion, up 9%, or roughly 8% in constant currency. Revenue was $7.35 billion, up 8%, ahead of the roughly $7.19 billion analysts had modelled. GAAP net income more than doubled to $1.95 billion, up 118%, though most of that jump came from currency movements on the company's euro-denominated debt rather than trading. On an adjusted basis, net income rose 8% to $1.96 billion and adjusted earnings per share rose 15% to $2.54.

The gap between 9% gross bookings growth and 5% room night growth comes down to price and mix. Constant-currency accommodation average daily rates rose about 2%, and merchant gross bookings, where Booking takes payment itself, grew 14.5% while agency bookings fell 3.3%.

What the numbers say about supply

Two figures deserve attention from anyone managing short-term rental inventory. Alternative accommodation room nights at Booking.com grew 4%, below the 5% growth in total room nights. That is a reversal of the pattern from recent years, when alternative accommodation consistently outpaced hotels on the platform.

The second is distribution mix. Over the trailing four quarters, the share of room nights booked through Booking's direct channel sat in the mid-fifties percent range, "similar to last year", according to the company. Marketing expense as a share of gross bookings ticked up to 4.7% from 4.6%. In other words, a heavy year of loyalty and app investment has not yet shifted travellers away from paid acquisition channels.

Flight tickets, the fastest-growing product line for several quarters, grew just 3.7% to 17 million after 28.5% growth in Q1. Rental car days fell 6.5%.

Costs, capital and the outlook

Booking raised the expected annual run-rate savings from its Transformation Program, first announced in November 2024, to about $650 million, and expects to reach that figure by the end of 2027. Total operating expenses grew 7%, slower than the 8% revenue growth, and adjusted fixed operating expenses grew 6%.

The company returned a record amount of capital, repurchasing $3.7 billion of stock in the quarter with $14.5 billion of authorisation remaining, and declared a $0.42 per share dividend payable September 30. Sustained buybacks have pushed total stockholders' deficit to $10.8 billion, from $5.6 billion at the end of 2025.

"Despite continued geopolitical and macroeconomic uncertainty during the second quarter, the underlying desire to travel remained resilient, and we are pleased with our results," said Chief Executive Officer Glenn Fogel. He added that the increased savings target creates "additional capacity to invest in our strategic priorities."

For the third quarter, Booking guided to room night growth of 3% to 5%, gross bookings growth of 4% to 6%, and revenue growth of 4% to 6%. Full-year gross bookings and revenue growth are both expected in the high single digits. The guidance assumes the indirect effects of the Middle East conflict persist through the quarter, specifically elevated flight ticket prices, reduced capacity on some routes, and softer long-haul international demand. The company said domestic travel, meaning trips within a traveller's own country, has held up well so far in Q3.

If the Q3 guide holds at the low end, room night growth would be running at roughly half the pace of two years ago. Watch whether alternative accommodation continues to lag the overall book.