Booking Holdings

Booking Holdings has historically maintained healthy margins and has some pricing power rooted in its scale, but it is limited by competitive market forces.

The business model earns a commission or fee on each booking: full-year 2024 gross booking revenue was $23.7B (up 11%) on $165.6B in bookings, implying roughly a 14% take-rate on travel bookings.

Profit margins are strong (Q4’24 adjusted EBITDA margin 34%)) and management recently lowered marketing intensity as bookings grew, which expanded margins further. In principle Booking could raise fees modestly to publishers or travelers due to its large share of travel distribution.

However, hotels and airlines remain price-sensitive and regulators are examining Booking’s pricing agreements (e.g. EU parity rulings), so any fee increases are likely gradual. We see Booking’s margins as high already but with some room for continued expansion as fixed costs are leveraged by revenue growth.

Thus we give moderately high pricing power: the company has historically maintained and is even increasing margins, but must remain competitive or risk losing Volume to rivals.