WHILE things remain glum in Asia Pacific, with almost all cross-border travel within the region halted and countries undergoing new waves of infections, it is good to see financial performance of major travel companies on the mend – although admittedly, recovery remains fragile.
Second quarter earnings reported by Booking Holdings, Amadeus and Sabre this week point to rebounds happening in the US and Europe, giving these global companies a much-needed lift.
Gross travel bookings at Booking Holdings totalled $22b between April and June this year, a marked improvement from the $2.3b in the same period of 2020. Room nights booked in the second quarter were 157 million, up from 99 million in the Q1 of this year and a 458% increase from Q2 2020. Sixty percent of room nights booked were transacted on mobile.
As reported in this Phocuswire article, Glenn Fogel, CEO of Booking Holdings, said, “We are encouraged by another quarter of meaningful sequential improvement in booking trends with second quarter room nights increasing 59% versus the first quarter of 2021, primarily driven by stronger results in Europe and in the US.”
He said the company would remain focused on strengthening its core accommodation business and shared that Booking.com’s flight product – described as an anchor product in its Connected Trip strategy in this article – is now available in 24 countries, up from 18 at the end of Q1.
Booking Holdings’ total revenue for Q2 was $2.2b, up from $630 million in the same quarter last year and just more than half the revenue recorded in the second quarter of 2019.
The company more than doubled its spending on marketing in Q2 to $988 million, up from $461 million in the first quarter of this year.
It is cautiously optimistic about future bookings, with its CFO David Goulden saying that in Europe and North America there are currently more gross bookings for the remaining summer months than there were at the same time in 2019.
“So assuming cancellation rates stay the same, that would potentially result in more revenue in those markets for the remaining summer months,” he says.
On a less positive note, Goulden acknowledges Asia is down significantly compared to 2019, with room night growth worse in Q2 than it was in Q1 of this year.
“The whole region is very depressed as you know, vaccination rates are lagging in most parts of Asia, also the response to COVID outbreaks tends to be more aggressive and restrictions are put in place more quickly based upon outbreaks in the Asia region across all countries,” he said.
“So travel levels are very low… still a long way to go.”
Amadeus’ president and CEO, Luis Maroto, called June “the best performing month since the start of the pandemic”. “Building on the trends already seen in the first quarter, air bookings and passengers boarded have gradually improved each month and accelerated in June …”
Here are the second quarter highlights from Amadeus (three months ended June 30, 2021 compared to Q2 2019) – full details here
- In Distribution, travel agency air bookings decreased by 67.6%, to 47.1 million, an improvement of 11.6 p.p. over its first quarter of 2021 performance.
- In IT Solutions, passengers boarded declined by 67.7%, to 164.9 million, an improvement of 3.1 p.p. over its first quarter of 2021 performance.
- Revenue contracted by 56.0%, to €624.4 million, an increase of €127.7 million relative to the first quarter of 2021.
Said Maroto, “In the coming months, we are optimistic that, as vaccination programmes keep progressing, travel restrictions are lifted, and traveller sentiment continues to improve, this should translate into a more consistent and stronger recovery over time”.
Over in the US, as reported by The Beat, Sabre’s second quarter GDS net air bookings were 59% below 2019 levels but plotted comparative month-over-month gains in the quarter. Sabre’s net air bookings, which factor in the impact of cancellations, declined 65%, 62% and 49% in April, May and June, respectively, compared with the same period in 2019.
President and CEO Sean Menke, during the quarterly results call, said momentum was interrupted in July due to the Delta variant spread – that month’s net air bookings were down 61% from July 2019.
The good news is, he said, underlying travel demand trends remain encouraging and the overall recovery arch remains positive.
• Featured image credit: Getty Images
