To The Moon

Several travel companies delivered strong earnings this season, with $Airbnb, Inc.(ABNB)$ achieving a rare post-earnings surge of 15%—its first in eight quarters. However, recent five-day declines are erasing much of this gain.

1. Why Did Airbnb Jump on Earnings?

EPS beat by 23.65%; Adjusted EBITDA beat by 17.41%, driven by improved margins

Revenue beat by 2.43%; Room nights beat by 2.94% (though expectations were already high); Gross Booking Value (GBV) beat by 2.28%

Latin America & Asia-Pacific led growth (room nights up low-20s YoY):

• Latin America benefited from large-scale marketing campaigns.

• Asia-Pacific growth was fueled by strong cross-border travel demand, led by Chinese outbound bookings (+25% YoY).

Beyond APAC and LATAM growth, Airbnb’s product updates and cost optimization efforts are key drivers:

• AI-driven search and customer service enhancements.

• Reduced ad spending, boosting profitability.

• Co-Host Network expansion, with nearly 100,000 listings across 10 countries, generating double the revenue of comparable listings.

Take Rate and ADR Trends

Take rate declined for the third consecutive quarter. But management gives reasonable reasons: A one-time gift card recognition in the previous year.

ADR performance:

• North America +3% YoY (driven by price appreciation & mix shift).

  EMEA +6% YoY (currency-neutral).

  Asia-Pacific +1% YoY.

Valuation concern

Airbnb’s P/E ratio is 37, higher than Booking’s 29, raising valuation concerns despite strong fundamentals.

2. $Booking Holdings(BKNG)$ : Strong Beat, but Market Sell-off Weighs on Stock

Despite Booking delivering strong beats across key metrics, a broader market sell-off led to a decline on the day of earnings.

• Revenue: $5.47B (+5.69% beat); EPS: $41.55 (+14.25% beat)

• Room nights and GBV exceeded expectations (+4.26% and +7.91%)

  

• Net take rate missed by 1.84%, similar to Airbnb’s shortfall

Regional Contribution

• Asia-Pacific and Rest of World (likely Latin America) were key growth drivers, similar to Airbnb’s trend.

• Management expects slower Q1 growth due to easier comps from the previous year and the leap-year effect but remains confident in the full-year outlook.

  

Management answers analysts’ question about AI

• Cost reduction & efficiency gains: AI-driven customer service & coding improvements are expected to save $150M in 2025.

• While agentic AI platforms may compete directly with hotels, Booking is mitigating risks by adapting AI innovations and partnering with key AI players.

3. $TripAdvisor(TRIP)$ Struggles: Weak Advertising Revenue Pressures Stock

Unlike Airbnb and Booking, Tripadvisor's primary revenue sources come from in-app advertising and commission from user bookings. This quarter, the divergence in ad performance prevented Tripadvisor—positioned as a travel recommendation and discovery platform—from benefiting from the better-than-expected Q4 growth seen in other travel companies.

Despite beating key metrics, core businesses like Tripadvisor-branded hotels saw negative YoY growth. Meanwhile, faster-growing segments like Viator and The Fork slightly missed expectations.

• EPS: $0.30 (beat by 49.94%); Revenue: $411M (beat by 2.78%); Branded Hotels beat by 5.42%

• Media & Ads missed by 3.24%

• Experiences & TheFork missed expectations (-5.24% and -0.92%)

While Tripadvisor management downplayed competitive threats, analysts raised concerns about Airbnb’s increasing presence in the experiences market and whether Tripadvisor can sustain margin expansion in the face of new competition.

4. $Trip.com Group Limited(TCOM)$: Can It Outperform Amid a China Market Pullback?

With Trip.com set to report earnings tomorrow, investors are closely watching whether it can deliver an earnings beat and a post-earnings surge.

Accommodation Reservation & Transportation Ticketing account for 80% of revenue. Online advertising & financial services remain secondary revenue sources (<10%).

Unlike Airbnb, Trip.com has a major transportation ticketing segment, expected to grow only 5.27% YoY in Q4, limiting its upside.

Q4 Revenue Expectations

• Projected YoY growth: +19.38%, surpassing Booking’s +14.36% and Airbnb’s +11.81%.

  

  Accommodation Reservation revenue expected to grow +21.7%, making it the key driver.

  

Market Focus: APAC Growth

• Trip.com remains heavily China-focused, and Q4 APAC travel growth should provide a tailwind.

• However, given recent weakness in China stocks, the market reaction remains uncertain.