Travel Resilience Defies Volatility: Merchant Mix Powers Growth (BKNG Q1 2026 Earnings Call)

By Dr. Graph | Updated on May 26, 2026 | earnings

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Booking Holdings delivered resilient execution in the first quarter of fiscal 2026, navigating geopolitical disruptions in the Middle East through solid brand momentum and accelerated domestic demand in the United States.

Strong Accommodations Demand Yields Solid Revenue Gains

Booking Holdings delivered total revenue of $5.5 billion in the first quarter of fiscal 2026, representing a reported increase of 16% year-over-year. This top-line momentum was supported by strong travel demand. Adjusted EBITDA rose to approximately $1.3 billion, reflecting solid operational execution.

Adjusted EPS reached $1.14, growing 14% year-over-year. This growth was partially offset by a higher tax rate from discrete items. Record share repurchases of $3.6 billion completed during the quarter supported capital returns.

Targeted Cost Safeguards Protect Near-Term Profit Margins

For the second quarter, management expects room night growth to range from 2% to 4%. This guidance reflects a projected 3 percentage point headwind from the ongoing conflict. CFO Ewout Steenbergen stated: "We expect the impact of the situation in the Middle East will be higher in the second quarter."

Merchant Payments Adoption Enhances Core Distribution Mix

Merchant gross bookings performed exceptionally well, increasing 24% year-over-year. This channel represented 72% of total gross bookings in the quarter. Growth was driven by strong merchant payment adoption.

Marketing Expertise Positions Platforms to Capture AI Lead Referral Flow

During the Q&A session, CEO Glenn Fogel addressed questions about competitive positioning in generative AI. Fogel expressed enthusiasm about major AI players potentially moving toward performance marketing models. He noted that the company's extensive experience with Google and performance marketing makes it exceptionally well-positioned to capture demand.

Frequently Asked Questions

What was Booking Holdings' total room night volume in the first quarter of fiscal 2026?

The company booked 338 million room nights during the first quarter. This volume was in line with management's expectations despite geopolitical disruptions in the Middle East.

How did the Middle East conflict affect room night growth in March 2026?

The conflict reduced March room night growth by approximately 6 percentage points. This disruption resulted in a net room night growth of 1% for the month due to elevated cancellations.

What were the key growth rates for alternative travel verticals in Q1 2026?

Booking Holdings achieved strong growth across its non-accommodation offerings. Airline tickets increased 28% year-over-year, while attractions tickets rose 25% during the quarter.