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JOURNEY · DETAIL
Booking Holdings: From a Small Dutch Travel Agency to a Global OTA Giant, Unlocking the Travel Industry Through Data Insights and M&A
Founded: Geert-Jan van der Volden, Kees Koolen · Booking Holdings Inc.
JOURNEY
Key Fields
FIELD STAMPSIndustryTravel
RegionMulti-region
ScaleGiant
ChannelOther
Origin
In 1991, a Dutch business owner decided to set up an online booking system for his small travel agency, hiring two tech-background graduates—Geert-Jan van der Volden and Kees Koolen—to write the software. Initially, they built a DOS-based room reservation system called Booking Online, with the server stuffed right under a desk. Powered by a device running 24/7 and a single telephone line, it replaced faxes and phone calls with online form-filling. When the company started, it had only two offices and a few thousand hotel room inventories, with zero external funding, surviving entirely on rolling commissions from bookings. From day one, the core logic of this business differed fundamentally from other travel agencies: instead of relying on human sales reps, it digitized inventory and pricing, letting users make their own choices.
Milestones
1991
Startup Phase Growth
In 1991, the two founders set up an online reservation system using an old server placed under a desk. In its first year of operation, the system processed only a few dozen orders per day, but the commission model proved viable. By 1996, Booking Online covered about 800 hotels across major Dutch cities, annual orders exceeded 20,000, and the team grew to 8 people. These five years saw zero funding, relying on a commission income of about 12% per booking to stay afloat. In 1995, the founders even came close to selling the system to pivot to other software businesses, only to be stopped by hotel owners calling frantically to place bookings.
1997
Dot-Com Bubble Turning Point
In 1997, the company renamed itself Booking.com and launched its international website, while facing a fatal crisis the same year: an early employee walked away with the core code and data to start a competitor, Active Hotels, in Amsterdam, directly poaching over 200 chain hotel contracts from Booking. In 1998, the founders were forced to lay off half their staff, and cash flow briefly dwindled to just three months of payroll. However, this bloodletting forced a critical subsequent decision—a complete shift toward an instant-confirmation model. Replacing ineffective fax confirmations with automated supplier-direct interfaces, back-end processing time was compressed from 30 minutes to 30 seconds. This technological gap later became a major weapon for crushing competitors.
2005
Acquisition Period Pivot
After the dot-com bubble burst, although Booking.com lacked massive revenue, its instant-confirmation technical architecture and direct contracts with thousands of hotels across continental Europe allowed it to maintain annual revenue of about $43 million with over 45% year-on-year growth in 2004, a time when global OTAs were scaling back. In 2005, Travelocity, a subsidiary of U.S. publicly traded Sabre Holdings, extended an olive branch, acquiring Booking.com for approximately $350 million. This deal provided Booking with parent-company funding and overseas traffic support. That same year, Booking was integrated into Priceline Group (the predecessor of Booking Holdings) as a core asset for its European expansion. Within a year of the acquisition, Booking.com's monthly room nights climbed rapidly from under 500,000 to 1.2 million.
2006
International Expansion Growth
In 2006, Booking.com officially rolled out localized teams in over 30 languages globally, equipping every country market with dedicated product teams and local customer service. Starting in 2008, it fully implemented the agency model, allowing hotels to list on the platform and set their own prices while Booking charged a commission, doubling inventory depth in the short term. By 2010, Booking.com's global room nights exceeded 100 million—a figure that stood at just 34 million in 2006. In 2011, following a strategic investment via Trip.com Group, parent company Priceline Group significantly increased its stake, and Booking.com contributed about 81% of the group's operating profit that quarter, becoming its absolute engine. Overseas local offices expanded from 6 in 2006 to 45 in 2011, covering roughly 130 countries.
2014
M&A Synergies Growth
In 2014, the parent company acquired U.S. restaurant reservation platform OpenTable for approximately $1.8 billion, followed in 2015 by the acquisition of U.K. metasearch platform Kayak for about $2.6 billion, bringing traffic entry points and local lifestyle scenarios under one roof. In 2017, it fully acquired U.S. long-term rental platform Rentalcars and executed a share swap with Trip.com Group to secure a long-term channel into the Chinese market. Following this round of acquisitions, Booking Holdings achieved total revenue of $12.7 billion and net profit of $2.3 billion in fiscal year 2017, with global room nights surpassing 650 million. The entire group expanded from a single hotel booking service into a full-journey platform covering flights, car rentals, restaurants, and destination experiences.
2018
Transformation Pain Period Failure
In 2018, Booking Holdings introduced its Connected Trip strategy, planning to integrate flights, hotels, car rentals, and restaurants to enable one-stop booking for users. However, over seven years, this strategy failed to deliver on its core promise: the in-app chained booking rate consistently lagged behind expectations. Although total gross bookings recovered to over $100 billion by 2022, the Connected Trip project had virtually zero consumer traction. By 2023, the group had to admit that the strategy's progress fell far short of expectations, leading to major adjustments in the relevant project management teams. Concurrently, Airbnb continued to penetrate urban short-term rentals and experiences, Google hotel ad conversion shares rose year by year, and Booking's core search and comparison scenarios began to be siphoned off by AI entry points. In late 2024, the group sold OpenTable, formally signaling the failure of this platform integration wave.
2025
AI Transformation Period Growth
In 2025, Booking Holdings pushed its AI travel planning assistant Penny into core user testing, and by 2024, its app's language-model-driven search response rate had already improved by about 35%. Q3 2025 financial results showed total gross bookings of roughly $43 billion, net profit up about 15% year-on-year, and full-year EBITDA estimated at around $12.5 billion. By 2026, the group initiated joint placement tests with OpenAI and Google's LLM interfaces, while its proprietary data assets covering roughly 2.8 million listings worldwide became a core barrier for training vertical travel models. Management stated in a January 2026 earnings call that incremental bookings driven by AI are expected to account for 8% to 12% of new orders.
Turning Points
- In 1997, a core employee walked away with the code to launch Active Hotels; Booking was forced to build its own instant-confirmation system, which ultimately caught up and crushed competitors on speed.
- In 2005, it was sold at a low valuation to Sabre's Travelocity in exchange for capital and global traffic, upgrading from a regional European website to a multinational platform.
- In 2008, it fully implemented the agency model, shifting from selling inventory to selling connections, which simultaneously doubled inventory depth and commission efficiency.
- Between 2014 and 2017, sequential acquisitions of OpenTable, Kayak, and Rentalcars expanded single-hotel bookings into a complete travel ecosystem.
- In 2018, it launched the Connected Trip strategy which stalled for seven years; selling off the previously acquired OpenTable in 2024 marked the complete failure of the platform integration route.
Failures & Pitfalls
- In 1997, Booking Online's original code was copied by an employee, 200 hotel contracts were poached by a competitor, and the company's cash flow temporarily dropped to just three months of payroll.
- In 2001, when the dot-com bubble burst, Booking experienced a halved order volume and slashed advertising spending, forcing it to suspend all non-core market spending.
- In 2018, the Connected Trip strategy was executed for seven years, but cross-category booking linkage rates consistently stayed below 5%; in 2024, the group was forced to divest previously high-priced acquired assets.
- In 2023, after Google converted hotel ads into AI summary displays, Booking's organic traffic dropped by roughly 9% for a time, redefining the value of metasearch entry points.
关键成功要素
- The instant-confirmation system was the early victory factor, technically 30 seconds faster than competitors, building word-of-mouth reputation among both hotels and users simultaneously.
- The agency model let hotels set their own prices while the platform only collected commissions, significantly lowering the onboarding barrier for suppliers and doubling inventory count within two years.
- Localization means operations rather than mere translation; every language market was equipped with a dedicated product team, which is why Booking widened the gap with Expedia.
- M&A always centers around transactional scenarios—integrating Kayak for price comparisons, OpenTable for dining, and Rentalcars for car rentals—rather than blind business expansion.
- Measuring expansion pace using EBITDA and free cash flow rather than chasing short-term revenue; this discipline allowed Booking to survive when the bubble burst.
Lessons
- Technological barriers must be built in-house, even at a painful cost—after losing its core code, the self-developed system instead became the world's deepest direct hotel inventory connection.
- Selling out cheaply is not necessarily a bad thing; when sold to Sabre for $350 million in 2005, many felt it was a loss, but the parent company's traffic and capital served as fuel for the next decade of expansion.
- The agency model aligns better with platform fundamentals than the distribution model; with self-pricing and platform commissions, scale growth and gross margin enhancement can happen simultaneously.
- M&A integration requires clear boundaries; Booking's Connected Trip linked almost every category, but failed to form user habits over seven years, showing that feature stacking does not equal platform stickiness.
- AI replacing search is a long-term variable; Booking missed the optimal window to bind with AI entry points between 2018 and 2024, lagging a step behind Google when it began absorbing LLM traffic in 2025.
Core Data
- 2024 Total Gross Bookings：Approx. $159 billion (based on public disclosures, independent verification pending)
- 2024 Net Revenue：Approx. $24 billion (based on public disclosures, independent verification pending)
- Global Platform Listings：Approx. 2.8 million (based on public disclosures, independent verification pending)
- Number of Employees：Approx. 5,400 (based on public disclosures, independent verification pending)
- 2017 Total Revenue：$12.7 billion (based on public disclosures, independent verification pending)
- 2011 Global Room Nights Milestone：100 million (based on public disclosures, independent verification pending)
- 2024 EBITDA：Approx. $12 billion (based on public disclosures, independent verification pending)
- App Monthly Active Users：Approx. 110 million (based on public disclosures, independent verification pending)
Competitors / Peers
In the global OTA arena, Booking Holdings' direct competitors are primarily Expedia Group and Trip.com Group. Expedia's total gross bookings in 2024 were around $100 billion; its brand matrix is complex, but its core remains hotels and vacation rentals, holding strengths in North America and package holiday markets. Backed by the Chinese market, Trip.com Group achieved total revenue of around RMB 45 billion in 2024, and its acquired Skyscanner also competes head-to-head with Kayak on international flight price comparisons. Meanwhile, Airbnb anchors its host community through immersive short-term rentals, continuously penetrating urban short-term rentals and experiences in recent years, with 2024 gross bookings of around $73 billion, holding its ground neck-and-neck with Booking particularly in European and American holiday bookings. Furthermore, Google hotel ads and AI summaries have cut off metasearch traffic at the source, posing a shared strategic threat to all OTAs. Booking's core moat lies in the world's largest direct inventory, multilingual operational network, and traffic matrix brought by M&A, but this model faces the alternative challenge of users bypassing OTAs to consult AI directly.
Sources
- https://guylouzon.substack.com/p/from-a-server-under-a-desk-to-165
- https://www.traveldaily.cn/article/190455
- https://mbcaijing.com/article/mRuaPs5Mh3I%3d
- https://www.mg21.com/bkng.html
- https://36kr.com/p/1724335800321
- https://tzdcd.com/booking_holdings
- https://www.xiaoyuzhoufm.com/episode/6a58d3fca4972c496dfce4ec
- https://m.36kr.com/p/1722722926593