Booking Holdings Inc.

Company Overview

Business Model: Booking Holdings Inc. generates substantially all of its revenues from providing online travel reservation services, facilitating online travel purchases by travelers from travel service providers. The Company also earns revenues from advertising services, restaurant reservation and management services, and travel-related insurance offerings. Revenues are classified as "merchant" (where Booking Holdings Inc. facilitates payments, primarily from Booking.com's accommodation reservations), "agency" (where Booking Holdings Inc. does not facilitate payments, almost entirely from Booking.com's accommodation reservations), and "advertising and other" (primarily from KAYAK's referrals and advertising placements, and OpenTable's restaurant reservation and management services).

Market Position: Booking Holdings Inc. aims for global leadership in online travel bookings and related services. Booking.com is the world's leading brand for online accommodation reservations based on room nights booked. Priceline is a leader in discount travel reservations, primarily in North America. Agoda is a leading online accommodation reservation service catering primarily to consumers in the Asia-Pacific region. OpenTable is a leading brand for online restaurant reservations, primarily in the United States. KAYAK provides online meta-search services globally. The Company competes in intensely competitive and constantly evolving markets against global technology companies, online travel/restaurant services, meta-search services, direct travel service providers, traditional agencies, and AI-powered agents.

Recent Strategic Developments:

• Achieved record annual room nights in 2024.
• Increased brand awareness in key markets, including the U.S.
• Grew alternative accommodations offering.
• Improved loyalty programs, expanding Booking.com's Genius program into more travel verticals.
• Further integrated generative artificial intelligence ("Gen AI") technology into offerings (trip planner, AI assistant, price comparison tool) and operations for efficiency.
• Improved and expanded flight offerings at Booking.com and Agoda, increasing opportunities for Connected Trips.
• Increased adoption of the Company's payments platform and capabilities.
• Announced a "Transformation Program" in November 2024 to modernize processes and systems, optimize procurement, seek real estate savings, and initiate a workforce reduction, aiming for $400 to $450 million in annual run rate savings over three years.

Geographic Footprint: Booking Holdings Inc. has significant operations in countries outside the United States, which represent a substantial majority of its financial results. The Company operates in over 220 countries and territories and in over 40 languages globally. Its systems infrastructure and web and database servers are hosted in data centers in Europe, Asia, and North America. Booking.com's headquarters are in the Netherlands, Priceline's in Norwalk, Connecticut, Agoda's in Singapore, KAYAK's in Stamford, Connecticut, and OpenTable's in San Francisco, California.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: Not explicitly disclosed as a separate line item in the Consolidated Statements of Operations.
• Operating Margin: 31.8% (2024)
• Net Margin: 24.8% (2024)

Investment in Growth:

• R&D Expenditure: Not explicitly disclosed as a separate line item.
• Capital Expenditures: $429 million (2024)
• Strategic Investments: The Company regularly evaluates and may pursue potential strategic acquisitions, partnerships, joint ventures, or investments. In 2023, an agreement to acquire European-based flights booking provider Etraveli Group was terminated after the European Commission blocked the transaction, resulting in a $90 million termination fee.

Business Segment Analysis

Booking Holdings Inc.'s portfolio of brands is organized into four operating segments, which are aggregated into one reportable segment due to similarity in economic characteristics and other qualitative factors. The Company's primary consumer-facing brands are Booking.com, Priceline, Agoda, KAYAK, and OpenTable.

Reportable Segment

Financial Performance:

• Total Revenues: $23.7 billion (+11.1% YoY)
• Segment Adjusted EBITDA less Capex: $8.2 billion (+16.5% YoY)
• Key Growth Drivers: Increased travel demand, particularly in Europe and Asia, expansion of flight offerings, growth in merchant transactions, and increased direct bookings.

Product Portfolio:

• Booking.com: World's leading brand for online accommodation reservations. Offers approximately 4.0 million properties (500,000 hotels/motels/resorts, 3.5 million homes/apartments/unique places). Also offers flights in over 55 markets, in-destination tours and activities in 1,700 cities, rental car services in over 42,000 locations, and ground transportation services at approximately 1,900 airports.
• Priceline: Leader in discount travel reservations, primarily in North America. Offers online accommodation, flight, and rental car reservation services, as well as vacation packages, cruises, activity, and hotel distribution services.
• Agoda: Leading online accommodation reservation service primarily for Asia-Pacific consumers. Also offers flight, ground transportation, and activities reservation services.
• KAYAK: Provides online meta-search services for comparing travel itineraries and prices from hundreds of online travel platforms in over 60 countries and territories.
• OpenTable: Leading brand for online restaurant reservations and reservation management services to restaurants, primarily in the United States.

Market Dynamics:

• The Company's online accommodation reservation services account for approximately 89% of total revenues.
• Merchant revenues increased by 29.3% year-over-year to $14.1 billion, while agency revenues decreased by 9.5% to $8.5 billion, primarily due to an ongoing strategic shift from agency to merchant bookings at Booking.com.
• Advertising and other revenues increased by 5.7% to $1.1 billion, driven by growth at Booking.com and OpenTable.
• Total revenues as a percentage of gross bookings was 14.3% in 2024, up from 14.2% in 2023, due to increased revenues from facilitating payments, partially offset by a higher mix of lower-margin flight gross bookings.

Operational Metrics:

• Room nights reserved: 1,144 million (+9.1% YoY)
• Rental car days reserved: 83 million (+12.3% YoY)
• Airline tickets reserved: 49 million (+38.1% YoY)
• Total gross bookings: $165.6 billion (+9.9% YoY)
• Merchant gross bookings: $104.2 billion (+27.5% YoY)
• Agency gross bookings: $61.4 billion (-10.9% YoY)
• Mix of total gross bookings generated on a merchant basis: 63% (up from 54% in 2023).
• Mix of room nights booked on a mobile app: low-fifties percentage (up from high-forties percentage in 2023).
• Mix of room nights booked for alternative accommodation properties (Booking.com): Approximately 35% (up from 33% in 2023).
• Global average daily rates (ADRs) on a constant currency basis were in line with the prior year, with a 1% increase excluding regional mix changes.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $6.5 billion (1,679 thousand shares) repurchased in 2024.
• Dividend Payments: $1.2 billion paid in 2024. A cash dividend of $9.60 per share of common stock was declared in February 2025, payable on March 31, 2025.
• Dividend Yield: Not explicitly disclosed.
• Future Capital Return Commitments: Remaining authorization of $7.7 billion under a $20 billion share repurchase program (authorized in 2023), expected to be completed by end of 2026. An additional $20 billion share repurchase program was authorized in January 2025.

Balance Sheet Position:

• Cash and Equivalents: $16.2 billion (as of December 31, 2024)
• Total Debt (carrying value): $16.6 billion (as of December 31, 2024)
• Net Cash Position: -$0.4 billion (Net Debt position as of December 31, 2024)
• Credit Rating: Not disclosed.
• Debt Maturity Profile: Total outstanding debt principal of $17.2 billion as of December 31, 2024. Short-term debt (due within 12 months) was $1.7 billion. Key maturities include $500 million (3.65% Senior Notes) and $984 million (0.1% Senior Notes) due March 2025, and $784 million (0.75% Convertible Senior Notes) due May 2025.

Cash Flow Generation:

• Operating Cash Flow: $8.3 billion (2024)
• Free Cash Flow: $7.9 billion (Operating Cash Flow of $8.3 billion minus Additions to Property and Equipment of $0.4 billion in 2024)
• Cash Conversion Metrics: Deferred merchant bookings increased by $1.4 billion in 2024, and accounts receivable increased by $506 million, primarily due to higher business volumes, partially offset by faster accounts receivable collections.

Operational Excellence

Production & Service Model: Booking Holdings Inc. provides online travel reservation services, facilitating online travel purchases. The Company focuses on providing a best-in-class user experience through intuitive, easy-to-use online platforms and mobile apps. Customer service is provided through call centers, online platforms, and virtual assistants. The Company is expanding its payments capabilities to remove friction from the booking process and deliver additional value.

Supply Chain Architecture: Key Suppliers & Partners:

• Travel Service Providers: Accommodations (hotels, motels, resorts, homes, apartments, etc.), rental car companies, and airlines.
• Restaurant Partners: Restaurants utilizing OpenTable's reservation and management services.
• Search Platforms: Primarily Google, for performance marketing campaigns.
• Distribution Channels: Third-party marketing affiliates.
• Insurance Providers: Third-party insurance providers for travel-related insurance offerings.
• Technology & Payment Processors: Third-party computer systems, Global Distribution Systems ("GDSs"), computerized central reservation systems, and payment card processors.

Facility Network:

• Corporate Headquarters: Norwalk, Connecticut, United States of America (leased).
• Brand Headquarters: Booking.com in Amsterdam, Netherlands (leased); Agoda in Singapore; KAYAK in Stamford, Connecticut; OpenTable in San Francisco, California.
• Other Facilities: Leased office space and data center facilities in various locations globally, with data centers in Europe, Asia, and North America.

Operational Metrics:

• Room nights reserved: 1,144 million in 2024.
• Rental car days reserved: 83 million in 2024.
• Airline tickets reserved: 49 million in 2024.
• Mobile app booking mix: Low-fifties percentage of room nights in 2024, up from high-forties in 2023.
• Alternative accommodation mix (Booking.com): Approximately 35% of room nights in 2024, up from 33% in 2023.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Significant portion of room nights booked directly through the Company's platforms, especially via mobile apps.
• Performance Marketing: Primary channel for generating traffic, including search engine keyword purchases (primarily Google), affiliate programs, meta-search referrals, and social media marketing.
• Brand Marketing: Offline and online campaigns (television, online video, display advertising, public relations, sponsorships) to enhance consumer awareness.

Customer Portfolio: Enterprise Customers:

• Travel Service Providers: Accommodations, rental car companies, airlines, and restaurants. The Company aims to establish mutually beneficial relationships by increasing distribution channels, demand, profile, reputation, and inventory utilization for partners.
• Customer Concentration: Not explicitly quantified, but the Company's reliance on Google for search traffic is highlighted as a significant dependency.

Geographic Revenue Distribution:

• Outside of the U.S.: $21.3 billion (89.5% of total revenue) in 2024.
• U.S.: $2.5 billion (10.5% of total revenue) in 2024.
• Growth Markets: Strong travel demand in Europe and Asia contributed to year-over-year room night growth in 2024.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The markets for online travel and restaurant reservation services are intensely competitive and rapidly evolving, characterized by rapidly changing technology, evolving industry standards, consolidation, frequent service developments, and changing consumer preferences. There is a continued shift from traditional offline methods to online channels. The development of new services can occur at a relatively low cost.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Large Global Technology Companies: Such as Google, which leverages its dominant search functionality and integrates travel search services (flights, hotels, alternative accommodations meta-search) into products like Google Maps.
• Online Travel or Restaurant Reservation Services and Meta-Search Services: Including companies like Airbnb and Vrbo (owned by Expedia) in alternative accommodations. Meta-search services can lower market entry costs for new companies.
• Travel Service Providers: Accommodations, rental car companies, or airlines that may offer lower prices on their direct channels.
• Traditional Travel Agencies, Travel Management Companies, Wholesalers, Tour Operators, and Financial Institutions.
• Companies Offering Software Solutions and Technology Services: To travel service providers, including Global Distribution Systems ("GDSs") and hospitality software/payments platforms.
• Companies Offering AI Agents: Powered by Gen AI, such as virtual assistants, that can perform or facilitate travel-related services.

Emerging Competitive Threats: New entrants, disruptive technologies (e.g., Gen AI and machine learning influencing how customers search and book travel), and "super-apps" from competitors offering various online services.

Competitive Response Strategy: The Company focuses on relentless innovation and execution, providing comprehensive choices and value, offering platforms and tools to partners, operating multiple brands that collaborate, and investing in profitable and sustainable growth. This includes leveraging technology for the best consumer experience, expanding payments capabilities, and developing the "Connected Trip" vision.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Declines or Disruptions in Travel Industry: Financial results depend on travel service sales, which fluctuate with consumer discretionary spending, adverse economic conditions, political/economic uncertainty, wars (e.g., Ukraine, Middle East), inflation, terrorist attacks, natural disasters, and increased focus on environmental impact of travel. These can impact transaction growth, cancellation rates, and average daily rates (ADRs).
• Intense Competition: Intense and evolving competition from global technology companies, online travel/restaurant services, meta-search, direct providers, and AI agents could reduce market share and harm financial performance. Competitors may have greater resources or offer services at a loss to gain share.
• Growth Rate and Global Expansion: Risks include strong local competitors, unique localized preferences, lower operating margins in certain markets, and restrictions on foreign businesses (e.g., China). Constraints on accommodation listings due to "overtourism" regulations or property owner limitations.
• Dependence on Third Parties: Reliance on travel service providers, restaurants, search platforms (Google), and other third-party distribution channels. Changes in search platform algorithms or pricing, or withdrawal of major partners, could adversely affect business.
• Alternative Accommodations Business: Risks related to liability claims, evolving regulations (e.g., EU's short-term rental regulation under DSA), and potentially lower profit margins or increased seasonality compared to traditional accommodations.
• Marketing Effectiveness: Marketing efficiency (marketing expense as % of gross bookings) and performance marketing ROIs are impacted by ADRs, costs per click, cancellation rates, foreign currency, conversion rates, and brand marketing effectiveness. Increased competition for search rankings can raise costs.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party System Reliance: Dependence on third-party computer systems, GDSs, and central reservation systems. Damage, breach, or interruption in these systems could prevent bookings.
• Payment Processing Reliance: Dependence on banks, card schemes, and other payment processors. Disruptions or cessation of operations could impact cash flows and merchant transactions.
• Supplier Dependency: Reliance on third-party service providers for customer service, and third-party insurance providers for travel-related insurance.
• Capacity Constraints: If systems cannot cope with demand, it could lead to service disruptions, slower response times, and decreased customer satisfaction.

Capacity Constraints:

• Technological Infrastructure: Reliance on multiple systems and platforms. Inability to keep up with rapid technological changes (e.g., Gen AI, mobile commerce) or system failures could lead to service outages, data loss, and reduced revenue.
• Transformation Program: Risks associated with implementing organizational changes, including modernizing processes and systems, workforce reduction, and real estate savings. No assurance of achieving estimated cost savings or managing effectively.
• Integration of Acquisitions: Difficulty in integrating acquired businesses or managing internal business shifts, leading to disruption, cultural clashes, challenges in retaining personnel, or loss of partners.

Financial & Regulatory Risks

Market & Financial Risks:

• Foreign Currency Exchange Rates: Substantial majority of business outside the U.S. creates exposure to fluctuations in foreign currency exchange rates (principally Euros and British Pounds Sterling) when translating financial results into U.S. Dollars, impacting gross bookings, revenues, operating expenses, and net income.
• Increased Debt Levels: Substantial outstanding indebtedness and potential for additional debt could reduce cash flow for other purposes, increase vulnerability to downturns, and limit flexibility.
• Investment Value Decline: Investment portfolio (marketable debt, equity securities of public/private entities) is subject to market price volatility and credit losses, which could adversely affect financial condition and results of operations.
• Liquidity and Capital Access: Continued access to liquidity depends on global economic conditions, financial markets, debt covenant compliance, operating performance, and credit ratings. Downgrades could negatively impact access and cost of financing.

Regulatory & Compliance Risks:

• Data Protection and Privacy: Processing, storage, use, and disclosure of personal data exposes the Company to risks of data breaches and liabilities under complex, evolving laws (GDPR, CCPA, PIPL, DPDP Act, ePrivacy Directive). Non-compliance can result in fines, penalties, and reputational harm.
• Competition, Consumer Protection, and Online Commerce: Subject to evolving laws and regulations globally (DMA, DSA, Platform to Business Regulation). Designation as a "gatekeeper" under DMA and "Very Large Online Platform" under DSA imposes additional rules, scrutiny, obligations, and costs not applicable to all competitors (e.g., prohibition on parity arrangements in EEA, data usage restrictions, increased partner information collection). Investigations (e.g., Spanish CNMC fine, Swiss PSO, Polish UOKiK, Italian AGCM) can result in fines, business practice restrictions, and private litigation.
• Regulation of the Travel Industry: Impacted by travel-related regulations such as local regulation of alternative accommodations, "overtourism" measures, and the EU Package Travel Directive, which can impose compliance costs or limit offerings.
• Payments Regulation: Expansion of payment services subjects the Company to additional regulations (financial services, export control, licensing requirements, Payment Services Directive 2/3, PCI DSS), increasing compliance costs and complexities. Susceptibility to illegal uses (money laundering, fraud).
• Tax Liabilities: Exposure to additional tax liabilities from audits, disputes, new tax legislation (Tax Act, Inflation Reduction Act, digital services taxes, OECD reforms), and travel transaction taxes. Loss or reduction of Netherlands Innovation Box Tax benefit could substantially increase effective tax rate.
• Intellectual Property: Reliance on trademarks, copyrights, patents, and trade secrets. Risks include inability to prevent infringement, costly litigation, and claims of infringement by others. Uncertainty about IP rights related to Gen AI.
• ESG Objectives: Failure to meet climate-related commitments or evolving ESG expectations/regulatory requirements could adversely impact reputation, employee retention, and customer/partner willingness to do business.

Geopolitical & External Risks

Geopolitical Exposure:

• Geographic Dependencies: Operations in over 220 countries and territories expose the Company to changes in social or political conditions or policies.
• Trade Relations: Impact of trade tensions and policy changes.
• Sanctions & Export Controls: Compliance requirements and business limitations due to U.S., EU, or U.N. sanctioned country or persons mandates. Limited bookings in Iran were disclosed, with one booking potentially involving a blocked party.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Generative Artificial Intelligence (Gen AI): Significant investments in Gen AI for internal productivity and consumer/partner-facing initiatives, including a trip planner, an AI assistant for consumer queries, and a price comparison tool. Gen AI is seen as enhancing the "Connected Trip" offering.
• Connected Trip Vision: Long-term strategy to create an ideal traveler experience by offering relevant options and connections, personalized online travel planning, booking, payment, and in-trip experiences, enhanced by a robust loyalty program. This involves further developing verticals and technological capabilities.
• Mobile E-commerce: Focus on mobile apps as an important platform for the Connected Trip, with a significant majority of room nights booked on mobile apps being direct.
• Payments Platform: Expanding payments capabilities to offer more options to consumers and travel service providers, increase accommodation variety, and enable the Connected Trip strategy.

Innovation Pipeline:

• Continued innovation to meet consumer and partner needs through intuitive, easy-to-use websites and mobile apps.
• Ongoing development and integration of technologies for the Connected Trip experience.

Intellectual Property Portfolio:

• Patent Strategy: Holds a number of issued patents in several jurisdictions and has filed applications for protection in the U.S. and other jurisdictions.
• Licensing Programs: Licenses proprietary rights to third parties and procures intellectual property licenses from third parties.
• IP Litigation: Periodically subject to legal proceedings and claims relating to intellectual property rights of others.

Technology Partnerships: The Company relies on third-party computer systems and service providers, including Global Distribution Systems ("GDSs") and computerized central reservation systems, for its services.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company's future success depends on attracting and retaining a highly skilled workforce. Organizational changes, including an expected workforce reduction, and a hybrid work environment could impact talent retention.

Board Composition: The Board of Directors and the Audit Committee are responsible for oversight related to cybersecurity, privacy, and data protection and security. The Cybersecurity Subcommittee of the Audit Committee specifically oversees management's efforts and processes in these areas.

Human Capital Strategy

Workforce Composition:

• Total Employees: Approximately 24,300 employees as of December 31, 2024.
• Geographic Distribution: Approximately 3,100 employees based in the United States and approximately 21,200 outside the United States.
• Skill Mix: Approximately 99% of employees are full-time.
• Diversity Metrics: As of December 31, 2024, approximately 46% of employees were women, approximately 26% of technology positions were filled by women, and approximately 34% of leadership positions (Vice Presidents and above, or Senior Directors and above for Booking.com) were women.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Seeks to attract the best and most innovative talent from a wide range of sources.
• Retention Strategies: Offers a rich culture, opportunities for growth, competitive compensation and benefits, and focuses on employee engagement and mental well-being.
• Employee Value Proposition: Tailored learning opportunities for upskilling, career conversations, and succession planning.

Diversity & Development:

• Cultivates a diverse leadership and workforce to gain insights from a wide range of backgrounds and experiences.
• Committed to creating inclusive workplaces that embrace diverse cultures and practices, prohibiting unlawful discrimination.
• Conducts annual employee engagement surveys to gauge inclusivity progress and employee experience.

Culture & Engagement: Regularly connects with employees through engagement and quick pulse surveys; 2024 surveys broadly demonstrated an engaged workforce.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• The Company has made climate-related commitments and issued a Climate Action Plan.
• Evaluating commitments related to offering more sustainable trip options and ESG disclosures.

Supply Chain Sustainability: Not explicitly detailed in the filing.

Social Impact Initiatives:

• Community Investment: Not explicitly detailed in the filing.
• Product Impact: Not explicitly detailed in the filing, beyond general mission to make it easier for everyone to experience the world.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: In 2024, gross bookings were generally similar in the first three quarters and higher than in the fourth quarter. Profitability is typically highest in the third quarter (peak summer travel in Europe and North America) and lowest in the first quarter, due to marketing expenses being recognized when incurred (at booking) while revenue is recognized when travel begins (at check-in).
• Economic Sensitivity: Demand for travel services can decline during periods of perceived or actual adverse economic conditions, political or economic uncertainty, and macroeconomic volatility (currency exchange rates, stock markets, oil prices).
• Industry Cycles: The length of the booking window (time between booking and travel start) impacts the relationship between gross bookings and revenues. In 2024, the booking window was generally longer than in 2023. Quarterly results can also be impacted by the timing of holidays.

Planning & Forecasting: The uncertainty of macroeconomic factors and their impact on consumer behavior makes it difficult to forecast industry and consumer trends, which could adversely affect the ability to effectively manage the business.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Data Protection and Privacy: Subject to complex and evolving laws globally, including the EU's General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act ("CCPA"), the Personal Information Protection Law in the People's Republic of China, the Digital Personal Data Protection Act in India, and the EU ePrivacy Directive. Non-compliance can lead to significant fines (e.g., up to 4% of annual global revenues under GDPR) and private rights of action.
• Competition, Consumer Protection and Online Commerce: Subject to laws and regulations globally, with increasing scrutiny on large technology companies. The Company has been designated as a "gatekeeper" under the EU Digital Markets Act ("DMA") and Booking.com as a "Very Large Online Platform" ("VLOP") under the EU Digital Services Act ("DSA"). These designations impose additional rules, compliance costs, and scrutiny (e.g., DMA prohibition on parity arrangements in EEA, DSA requirements for partner information, annual supervisory fees, risk assessments, independent audits).
• Regulation of the Travel Industry: Impacted by local regulations on alternative accommodations, measures addressing "overtourism," and the EU Package Travel Directive, which imposes requirements like local registration, financial guarantees, and liability for service performance.
• Payments: Expansion of payment services subjects the Company to financial services and export control regulations, licensing requirements, and payment card association rules (e.g., Payment Card Industry Data Security Standard). Compliance is complex and costly, with risks of fines or restrictions for non-compliance.

Trade & Export Controls: Subject to U.S., EU, or U.N. sanctioned country or sanctioned persons mandates, which can limit business activities and require compliance.

Legal Proceedings:

• Spanish Competition Authority: In July 2024, the Comisión Nacional de los Mercados y la Competencia ("CNMC") in Spain imposed a fine of 413 million Euros ($530 million initially, reduced to $486 million or $413 million in Euros) and restricted certain business practices of Booking.com. Booking.com has filed an appeal.
• Netherlands Pension Fund: In January 2024, a Court of Appeal ruled that Booking.com B.V. is required to participate in a mandatory pension scheme with retroactive effect to 1999. The Company accrued a loss of 253 million Euros ($276 million) in 2023, with an additional $77 million in 2024, and has filed an appeal.
• Italian Tax Authorities: In November 2024, the Company entered into a settlement agreement with the Italian Tax Authorities ("ITA") and paid 313 million Euros ($332 million) to resolve a tax assessment related to a 2017 law on short-term rental partners.
• Other Investigations: Ongoing investigations by the Swiss Price Surveillance Office (regarding Booking.com commissions) and the Polish Office of Competition and Consumer Protection (regarding Booking.com's host identification and messaging).

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: 19.3% in 2024 (vs. 21.8% in 2023). The 2024 rate benefited from the Netherlands Innovation Box Tax and a reduction to the 2018 U.S. federal one-time deemed repatriation liability due to a U.S. Tax Court decision, partially offset by higher international tax rates and non-deductible expenses.
• Geographic Tax Planning: A significant portion of taxable earnings is generated in the Netherlands, benefiting from the Innovation Box Tax (9% rate vs. 25.8% statutory rate for qualifying innovative activities).
• Tax Reform Impact: Subject to the U.S. Tax Cuts and Jobs Act (GILTI, BEAT, deemed repatriation tax) and the U.S. Inflation Reduction Act (15% corporate minimum tax on book income, 1% excise tax on stock repurchases). Several countries have adopted rules for a 15% minimum global tax (effective January 1, 2024) in response to OECD tax reform. Digital services taxes are also being unilaterally introduced by some countries.
• Tax Liabilities: Remaining U.S. transition tax liability of $487 million as of December 31, 2024, payable over the next two years. Estimated excise tax liability of $56 million for share repurchases in 2024.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Maintains insurance policies to protect against potential losses caused by security breaches, though coverage may not be adequate for all losses.
• Risk Transfer Mechanisms:
  • Partner Liability Insurance: Booking.com offers partner liability insurance for certain accommodation partners ("home partners") providing coverage up to $1 million equivalent per occurrence against third-party lawsuits for bodily injury or property damage during a stay booked through Booking.com. Booking.com retains certain financial risks related to this offering.
  • Derivative Instruments: Uses foreign currency exchange derivative contracts to hedge exposure to movements in foreign currency exchange rates on transactional balances. Also designates portions of Euro-denominated debt as a hedge of the foreign currency exposure of net investment in certain Euro functional currency subsidiaries.
  • Contractual Risk Allocation: Agreements with third-party service providers may not provide recourse for service interruptions.