There is no doubt that vacation rentals, short-term rentals, and other non-hotel properties are key to Booking.com’s growth. When Booking Holdings revealed its Q2 2022 numbers, it was clear: For instance, 32% of Booking.com’s room nights are from “alternative accommodations,” and the site counts 6.6 million listings of such places. We’ll see that Booking has been busy delivering new services for its vacation rental hosts, from liability insurance to payment solutions, in order to plug competitive gaps with the likes of Airbnb and Vrbo. Yet, Booking.com acknowledges that its performance in the US is still underwhelming, despite rolling out a vacation-rental-focused advertising campaign in the country in Q2 2022.
Overall Booking.com numbers for Q2 2022
“We reached another milestone in our company’s recovery from the impact of the pandemic with room nights for the second quarter surpassing 2019 levels for the first time. We continued to see very strong accommodation ADR growth, which helped drive a 38% increase in gross bookings, or a 48% increase on a constant currency basis, in the second quarter versus the second quarter of 2019,” said Glenn Fogel, Chief Executive Officer of Booking Holdings. “Looking forward, we expect record Q3 revenue and are very busy working with our customers and partners to help enable an extremely busy summer travel season.”
Booking Holdings’ total revenues for Q2 2022 were $4.3 billion, an increase of 99% from Q2 2021. Net income for tQ2 2022 was $857 million, compared with a net loss of $167 million in Q2 2021.
So, in Q2 2022, Booking Holdings finally surpassed 2019 levels. Note that this is slower than Airbnb, whose revenues for the whole of 2021 were already 25% above those recorded in 2019. As Booking.com, which makes up the lion’s share of Booking Holdings’ activities, has a much smaller presence in the US than Airbnb, it could not benefit as much from the American vacation rental book, which started in the summer of 2020. Moreover, hotels still make up the majority of Booking.com’s bookings. Demand for hotels is only reaching 2019 levels in 2022, which also made Booking.com’s recovery slower.
Booking Home – Alternative accommodation performance now 32% of booked nights, but still underwhelming in the US
Booking.com groups its non-hotel properties under the “alternative accommodations” name. Most of them are vacation rentals, short-term rentals, and serviced apartments. Yet, accommodation categories, such as bed-and-breakfasts, are also part of these alternative accommodations and represent a non-negligible part of their room night count.
For Q2 2022, compared to Q2 2019, room nights were up 16% for Booking Holdings as a whole. Booking.com’s alternative accommodations outperformed this growth, rising by 25% in Q2 versus Q2 2019.
Alternative accommodations make up alternative accommodations about 32% of the global mix of Booking.com’s room nights. It is in line with Q2 2021 and a couple of percentage points higher than Q2 2019.
In terms of supply, Booking.com saw, in Q2 2022, the largest sequential net increase in alternative accommodation properties since 2019. The company now boasts 6.6 million alternative accommodation listings. Booking says that it wants to increase its supply growth in the second half of 2022.
Still not happy with Booking.com’s vacation rental performance in the US
Within Europe, the share of alternative accommodations continues to be meaningfully higher than the global average. In North America, Booking.com’s mix of alternative accommodations remains low relative to the global average. However, Booking says that they see an encouraging increase in mix versus Q2 2021 in that region.
Booking.com has tried to bolster its presence in the US vacation rental market with a local advertising campaign in Q2 2022 called “Think Bigger, Think Booking.com”. The company went as far as trolling Expedia’s partner conference by renting billboards near the venue where the event was hosted. In Q1 2022, Booking also ran a Super Bowl commercial, which was mildly received.
Here’s what Glenn Fogel, Booking Holdings’ CEO, had to say about it:
“We’ve mentioned in the past that we know in some parts of the world, our alternative accommodations is not where I want to be yet. We’re working on that to make that better. (..) Here’s a lot more to be done, and I continue to repeat myself about we got to do better in the alternative accommodations in the States.”
Product innovation for vacation rental partners delivered by Booking.com in Q2 2022
The company has been steadily improving its offering for short-term and vacation rentals. One of the goals has been addressing technical gaps that prevent it from competing on an equal footing with Airbnb and Expedia’s Vrbo in the US.
For instance, Airbnb has been offering a $1,000,000 property damage guarantee (now Aircover) for more than 10 years in the US. For years, both Airbnb and Vrbo have also been offering reliable ways for property managers to take payments on their platforms. Not Booking.com.
So, in Q2, Booking.com finally plugged some competitive gaps by rolling out three new services for its hosts:
- A free $1,000,000 liability insurance available globally to the company’s non-hotel partners (e.g. homes, apartments, condos, bed and breakfasts, villas),
- A damage policy option that can make guests pay for the property damage they’ve causes, under certain circumstances.,
- An improved payment solution for professionnal property managers in the U.S.