Booking Holdings CEO Glenn Fogel is staying realistic on when the travel industry will fully recover from COVID-19 pandemic, even as his business is showing promising signs in the second quarter.
"A year ago, I said it would take years — not quarters — to recover, and I will stick to that," Fogel said on Yahoo Finance Live. "It's still going to be years before we are fully recovered."
Fogel says the issue holding back a full travel industry recovery is the international component. Countries remain hesitant to allow foreign tourists while they are working to get cases under control and get their populations vaccinated.
Fogel adds, "International travel is where we make a lot of money, and it's really very important for the whole industry."
Booking's first quarter earnings release this week underscored the ongoing pressures on the business from the pandemic. Gross bookings fell for the fifth straight quarter, dropping 3.7% from a year ago. Total sales declined 50.2% year over year. Room nights declined 20.1% from last year.
The company said the U.S. was the strongest performing major country in the first quarter, while Europe remained a drag on the overall business. Those trends appeared to continue into the current quarter.
Domestic room night growth was relatively unchanged in April vs. April 2019, Booking said. Room night growth in Europe declined more than 50% in April.
Booking Holdings shares reflect the cautiousness on the pace of the travel recovery. The stock is up 5.9% year to date, lagging the 12.7% gain for the S&P 500.
By and large, Wall Street is sticking with Booking as a potential prime beneficiary of a snapback in travel this year. All of the analysts that rated Booking shares a Buy headed into earnings this week have left their ratings intact following the report, according to Bloomberg data.
"While uncertainty around the shape and timing of the recovery remains a key risk, we continue to like Booking as a value recovery play. At 18.7 times consensus '22 EBITDA [earnings before interest, taxes, depreciation and amortization], Booking trades slightly above its five-year average of 15.9 times but the stock looks cheap relative to broader tech," wrote Jefferies analyst Brent Thill in a research note.
Thill rates Booking's stock a Buy with a $2,800 price target.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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