Booking Holdings is one of the largest online travel companies in the world, operating a portfolio of brands that connect travelers with hotels, flights, rental cars, and experiences. Understanding what Booking Holdings does starts with its role as a middleman: the company earns money primarily by taking a cut every time someone books a trip through one of its platforms. For investors researching BKNG, the business model is straightforward in concept but massive in scale, spanning over 200 countries and generating billions in annual revenue.
Key takeaways
- Booking Holdings owns six major travel brands, with Booking.com and Priceline being the most recognizable in different markets.
- The company makes most of its money through commission fees and advertising from accommodation providers, not from charging travelers directly.
- BKNG competes with Airbnb and Expedia using different strategies: deeper international reach and a merchant revenue model that locks in payments earlier.
- The "connected trip" strategy is Booking Holdings' long-term play to bundle flights, hotels, and ground transportation into a single booking experience.
What does Booking Holdings do, exactly?
At its core, Booking Holdings operates online platforms where people search for and book travel. Think of it as a marketplace. Hotels, vacation rentals, airlines, and car rental companies list their inventory, and Booking Holdings helps travelers find and reserve what they need. The company doesn't own hotels or planes. It owns the digital storefront.
This is a classic platform business. Booking Holdings earns revenue when a transaction happens, which means the more travelers it attracts and the more properties it lists, the more money it makes. That flywheel effect is a big reason the company has grown to the scale it has.
Platform business model: A business that creates value by connecting two groups (in this case, travelers and travel providers) and takes a fee for facilitating the transaction. The more participants on each side, the more valuable the platform becomes.
Which brands does Booking Holdings own?
If you've booked travel online, you've probably used a Booking Holdings brand without realizing it. The company operates six main brands:
- Booking.com — The largest brand by revenue. Dominates hotel and accommodation bookings, especially in Europe and Asia. Lists everything from luxury hotels to apartments.
- Priceline — Focused on the U.S. market. Known for discount hotel deals and its "Express Deals" feature where you get a lower price by not knowing the exact hotel until after booking.
- Agoda — Targets the Asia-Pacific market with a strong presence in Southeast Asia, Japan, and South Korea.
- Kayak — A metasearch engine. Instead of booking directly, Kayak compares prices across multiple travel sites and sends you to the cheapest option.
- OpenTable — Restaurant reservations. This one surprises people, but it fits into the broader travel and dining experience.
- RentalCars.com — Car rental comparison and booking platform.
Booking.com does the heavy lifting. It accounts for the vast majority of the company's gross bookings and is the brand most international travelers recognize. For Booking Holdings beginners, understanding that Booking.com is the engine of this company is the first thing to get right.
How does Booking Holdings make money?
There are two primary ways BKNG generates revenue, and the distinction matters if you're analyzing the stock.
The agency model
Under this model, a traveler books a hotel through Booking.com, pays the hotel directly at check-in or check-out, and Booking Holdings collects a commission from the hotel. The commission typically ranges from around 10% to 25% of the booking value, depending on the property and market. Booking Holdings never touches the traveler's money in this scenario.
The merchant model
Here, the traveler pays Booking Holdings upfront at the time of booking. Booking Holdings later remits payment to the hotel, minus its commission. This model has been growing as a share of total revenue because it gives Booking Holdings more control over the payment process and lets it offer bundled deals.
Gross bookings: The total dollar value of all travel services booked through the platform, before any fees or commissions are deducted. This is the headline number that shows how much travel flows through Booking Holdings' ecosystem. Investors use it to gauge demand trends.
Beyond commissions, Booking Holdings earns advertising revenue. Hotels and properties pay to appear higher in search results on Booking.com, similar to how businesses pay for Google Ads. Kayak also generates advertising revenue by sending traffic to other booking sites.
One thing worth noting: Booking Holdings' margins are high compared to many companies because it doesn't own physical assets. No hotel buildings, no airplane fleets, no rental car lots. It's a software and marketplace business with the cost structure to match.
How does BKNG compete with Airbnb and Expedia?
This is the question that comes up most in stock analysis discussions around online travel. The three companies overlap, but they're not identical.
Booking Holdings vs. Airbnb
Airbnb built its brand around alternative accommodations: apartments, homes, treehouses, yurts. Booking.com actually lists millions of alternative accommodation properties too, but most people don't associate the brand with that. Booking.com's strength is traditional hotels, especially outside the United States.
The geographic split is important. Booking Holdings generates a large majority of its revenue from international markets, particularly Europe. Airbnb is more balanced but has stronger brand recognition in North America. If you're researching what Booking Holdings does compared to Airbnb, geography and accommodation mix are the two dimensions to focus on.
Booking Holdings vs. Expedia
Expedia Group owns brands like Expedia, Hotels.com, Vrbo, and Travelocity. It's the closest direct competitor. Both companies operate as online travel agencies with similar commission-based models. The difference is execution and scale. Booking Holdings has historically had better margins, stronger international reach, and a more efficient marketing spend. Expedia has been restructuring its brand portfolio and technology stack in an effort to close that gap.
For anyone exploring BKNG on Rallies.ai, comparing these three companies side by side is a useful exercise in understanding competitive positioning.
What is BKNG's "connected trip" strategy?
Booking Holdings has been talking about its "connected trip" vision for years, and it's worth understanding because it shapes where the company is heading.
The idea is simple: instead of booking your hotel on one site, your flight on another, and your rental car on a third, Booking.com wants you to do everything in one place. Book the flight, the hotel, the car, and maybe a restaurant reservation through OpenTable, all in a single app experience.
Why does this matter? Two reasons:
- Higher revenue per customer. If a traveler books a hotel and a flight instead of just a hotel, Booking Holdings earns commissions on both.
- Customer retention. The more services tied to one platform, the less likely a traveler is to switch to a competitor for their next trip. This creates stickiness that's hard to replicate.
The connected trip strategy is still a work in progress. Flights are a lower-margin product than hotels, and getting travelers to change their booking habits takes time. But it's the clearest signal of where management is investing for long-term growth.
What are the risks to Booking Holdings' business?
No business model overview is complete without talking about what could go wrong. Here are the factors investors researching BKNG may want to consider:
- Google's ambitions in travel. Google has its own hotel and flight search tools. If Google decides to push travelers toward booking directly through Google rather than clicking through to Booking.com, that's a serious threat. Booking Holdings spends billions on Google advertising each year, which gives Google leverage.
- Regulatory pressure in Europe. Since Booking Holdings earns so much from European markets, changes to EU regulations around platform businesses, rate parity clauses, or digital taxes could affect margins.
- Hotels pushing direct bookings. Major hotel chains like Marriott and Hilton have invested heavily in loyalty programs and direct booking incentives. Their message to travelers is clear: book with us directly for the best price. If that shift gains momentum, it could squeeze online travel agencies.
- Macroeconomic sensitivity. Travel is discretionary spending. During economic slowdowns, consumers cut travel budgets, and that flows directly through to Booking Holdings' gross bookings.
None of these risks are new or secret. The question is always about degree and timing. You can dig deeper into risk factors and financial metrics using the Rallies AI Research Assistant.
Why does Booking Holdings matter for investors?
BKNG is one of the most valuable companies in the travel industry by market capitalization. It's also a case study in how asset-light platform businesses can generate strong free cash flow. The company doesn't need to build hotels or buy airplanes to grow. It needs to attract more travelers and more property listings to its platform.
For beginners learning about travel stocks, Booking Holdings is often the first name that comes up because of its size, its global reach, and its relatively simple business model. If you can understand how a marketplace works and why commissions on billions of dollars in bookings add up fast, you understand the core of what Booking Holdings does.
If you want to screen for similar platform-based businesses, the Rallies Vibe Screener lets you filter stocks by business characteristics that match what you're looking for.
Try it yourself
Want to run this kind of analysis on your own? Copy any of these prompts and paste them into the Rallies AI Research Assistant:
- Explain Booking Holdings' business model like I'm new to travel stocks — how do they make money, what brands do they own, and how do they compete with Airbnb and Expedia?
- Explain what Booking Holdings does like I'm new to investing — how does the business work and why does it matter?
- What are the biggest risks to Booking Holdings' business model, and how do they compare to risks facing Airbnb and Expedia?
Frequently asked questions
What is BKNG in simple terms?
BKNG is the stock ticker for Booking Holdings, the parent company of Booking.com, Priceline, Agoda, Kayak, OpenTable, and RentalCars.com. The company operates online travel platforms that help people book hotels, flights, rental cars, and restaurants. It earns money by charging commissions to travel providers when bookings are made through its sites.
How does Booking Holdings make money if travelers don't pay fees?
Booking Holdings charges the hotels and property owners, not the travelers. When you book a hotel through Booking.com, the hotel pays a commission (typically between 10% and 25% of the booking value) to Booking Holdings for sending you there. The company also earns revenue from advertising, where properties pay for better visibility on the platform.
Is Booking Holdings the same as Booking.com?
Booking.com is a brand owned by Booking Holdings, but they're not the same thing. Booking Holdings is the parent company that also owns Priceline, Agoda, Kayak, OpenTable, and RentalCars.com. Booking.com is the largest and most important brand in the portfolio, generating the majority of total revenue.
What does Booking Holdings do differently than Expedia?
Both are online travel agencies with similar business models, but Booking Holdings has stronger international presence, particularly in Europe and Asia. Booking Holdings has also historically maintained higher profit margins and more efficient marketing spending. Expedia has a stronger position in the U.S. market and owns Vrbo, which competes in the vacation rental space.
Is Booking Holdings a good stock for beginners to research?
Booking Holdings is often considered an accessible company for beginners to study because the business model is easy to understand: people book travel, the company earns a commission. That said, the stock tends to trade at a premium valuation, so beginners should learn how to evaluate whether the price reflects the company's growth potential. Tools like the Rallies AI Research Assistant can help walk through that kind of analysis.
Bottom line
Understanding what Booking Holdings does comes down to one concept: it's a massive digital marketplace for travel. The company connects hundreds of millions of travelers with millions of properties, flights, and rental cars worldwide, earning commissions on each transaction. Its brand portfolio, international dominance, and asset-light model make it one of the most significant companies in the travel industry.
If you're new to analyzing travel stocks and want to go deeper on BKNG's competitive position, financials, or valuation, explore more stock analysis guides to build your research framework.
Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other type of advice. Rallies.ai does not recommend that any security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. Before making any investment decision, consult with a qualified financial advisor and conduct your own research.
Written by Gav Blaxberg, CEO of WOLF Financial and Co-Founder of Rallies.ai.