Booking Holdings (BKNG) revised its 2026 revenue growth forecast downward to high single digits from a previously anticipated low double-digit rate, attributing the cut to persistent travel disruptions stemming from the ongoing Middle East conflict. The company now expects second-quarter revenue to increase by only 4% to 6%, significantly missing Wall Street's consensus of 11%. This guidance sent shares lower in after-hours trading, despite first-quarter results that exceeded analyst expectations.
The stock, which closed regular trading on Nasdaq at $173.38, down 2.33%, fell an additional 3.68% to $167.00 in after-hours activity. The warning underscores the broader impact of geopolitical tensions on global travel, as consumers face higher fuel costs, flight cancellations, and route changes. Booking Holdings, which operates Booking.com, Priceline, Agoda, and Kayak, noted that the conflict continues to reshape travel flows, affecting inbound and outbound trips in the Middle East, regional travel, and key routes between Europe and Asia.
Despite the cautious outlook, the company reported a solid first quarter. Room nights increased 6% to 338 million, while gross bookings—which include the full value of customer reservations, taxes, and fees, minus cancellations—rose 15% to $53.8 billion. Revenue climbed 16% to $5.5 billion, slightly above the $5.52 billion forecast by analysts. Net income surged to $1.08 billion, or $1.36 per diluted share, up from $333 million, or $0.40 per share, in the same period last year. Adjusted earnings of $1.14 per share beat the $1.08 average estimate from FactSet.
Chief Executive Glenn Fogel described the start of 2026 as "solid," noting that gross bookings and revenue exceeded internal expectations, with strategic growth areas, particularly in the United States, performing well. However, the company's forecast assumes that both direct and indirect effects of the Middle East conflict will persist through June, with a recovery expected in the second half of the year. Management also flagged potential risks from broader inflation, jet fuel price volatility, airline capacity reductions, and softer traveler sentiment, though these factors are not incorporated into the official guidance.
The impact of Booking's guidance rippled through the travel sector, dragging down shares of Expedia (EXPE) and Airbnb (ABNB) in after-hours trading, according to Seeking Alpha. Meanwhile, Hilton (HLT) raised its 2026 room-revenue outlook but acknowledged ongoing pressure from Middle East conflicts after softer demand reduced occupancy in the region during the first quarter, as reported by Reuters.
Booking Holdings completed a 25-for-1 stock split on April 2 and repurchased $3.6 billion in shares during the first quarter, leaving $18.2 billion remaining under its buyback authorization. The board also declared a quarterly dividend of $0.42 per share, payable on June 30 to shareholders of record as of June 5.
Investors will now closely monitor second-quarter earnings reports from other travel companies to gauge the broader industry impact of the Middle East situation. Booking's reduced forecast highlights the challenges facing the sector as geopolitical uncertainties continue to weigh on consumer confidence and travel patterns.
