Online travel company Booking Holdings is focused on running a “tight ship” through a major transformation effort that includes using artificial intelligence to automate internal processes, according to CFO Ewout Steenbergen.
The transformation program, announced in November, involves a push to realize as much as $450 million in savings from cost-cutting measures by the end of 2027 and then reinvest some of the freed-up capital into AI projects and other initiatives.
“We’re well on the way toward implementing these plans,” Steenbergen said in an exclusive interview last month. The company estimates that it will achieve $150 million in savings this year.
Booking was originally known as Priceline Group before it rebranded in 2018. Today, the company is the world's largest online travel agency by sales, offering booking and payment services for hotel and alternative accommodation rooms, airline tickets, rental cars, restaurant reservations, cruises, experiences, and other vacation packages, according to Pitchbook. It operates several branded travel booking sites, including Booking.com, Agoda, OpenTable, Rentalcars.com, Kayak, and Momondo.
The efficiency effort comes as the company is also closely monitoring uncertainty in the macroeconomic environment in the wake of sweeping tariff announcements and other federal policy changes since President Donald Trump returned to the White House for a second term.
“Because we are a services company, there is not a direct impact of tariffs on our business,” Steenbergen said. “But there could be an indirect impact if consumer confidence goes down.”
So far, demand for Booking’s services is “holding up” in most regions of the world, although it appears to be softening in the U.S., Steenbergen said.
Bookings generated $4.8 billion in revenues during the first quarter, a year-over-year increase of 8%, according to results released in late April. Room nights grew 7% and gross bookings spiked 7% compared to the year-earlier period.
Room night growth was up in the high-single digits in Europe and Asia, compared with the low-single digits in the U.S., Steenbergen said during an April 29 earnings call.
The finance chief told investors during the call that Booking was adjusting its full-year gross bookings and revenue growth outlook to “mid-to-high single-digits” at constant currency rates. He cited “increased uncertainty in the geopolitical and macroeconomic environment.” The company previously projected full-year growth of “at least 8%.”
“While Booking's network is among the strongest in the industry, its demand would not be immune if the US tariff policy led to weaker consumption,” Morningstar Senior Equity Analyst Dan Wasiolek said in an April 30 client’s note.
Booking is well positioned to navigate risks in the current environment thanks to its ongoing transformation program, Steenbergen told CFO Dive. “We’re running a tight ship from an expense management perspective,” he said.
In a November securities filing, Booking announced plans for “organizational changes” including modernizing processes and reducing its workforce.
“We believe these efforts will improve operating expense efficiency, increase organizational agility, free up resources that can be reinvested into further improving our offering to both travelers and partners, and better position the Company for the long term,” the filing said.
As of December 2024, the company employed about 24,300 employees globally, according to a February 10-K filing.
The company provided further details on its transformation program in a December securities filing, saying the initiative will, over the next three years, ultimately reduce annual run rate expenses by about $400 million to $450 million.
“We launched a transformation program last year, because it was a good moment to take a few step backwards and look at where we were as an organization,” Steenbergen said. “The organizational complexity had gone up a lot.”
As part of its transformation effort, Booking is investing in AI for purposes such as automating customer service functions over the phone, according to Steenbergen.
“That can be done by generative AI much better,” he said. “You don’t need to wait in a long line, and it can find information much quicker.”
