Booking to appeal $530 million fine imposed by Spanish regulator
28-02-24
Booking Holdings CEO Glenn Fogel said the company "couldn't disagree more" with a draft decision by Spanish regulators that alleges Booking.com has violated Spanish competition laws and should be fined $530 million.
With a noticeable tone of frustration, Fogel defended the company's biggest brand, saying Booking.com provides a marketplace that allows hotels and partners to attract travelers "from around the world at a lower cost than many other marketing channels."
"We could not disagree more with this draft decision and the arbitrarily large fine they have proposed, which is completely disproportionate to the alleged conduct," Fogel said on a call with financial analysts to discuss the company's fourth-quarter and full-year 2023 financial results. "Should the draft decision become final, we plan to appeal."
Booking Holdings is already working with the European Commission regarding the enforceability of the Digital Markets Act, aimed at ensuring a high level of competition in digital commerce across Europe, and Fogel said, "We plan to submit our notification for designation under the DMA claim, and believe that the concerns raised by the Spanish authority overlap with the DMA. We will continue to work closely with these regulators to maintain consistent standards. More importantly, we will continue to ensure that we provide the best possible platform for our partners and customers."
Meanwhile, the fine-along with expenses related to a pension fund issue for the company's employees in the Netherlands-caused a loss of $276 million in 2023 and put fourth-quarter net income at $222 million, down 82% from the same period in 2022.
A separate regulatory issue-the European Commission's decision in September to block Booking Holdings' acquisition of Etraveli Group-did not come up on the call with analysts, although in November Fogel said the company would file an appeal. Etraveli provides the technology platform for Booking.com's flight sales.
Despite that dispute, airline ticket bookings were a growth driver for the company in 2023: up 57.6% to 36 million tickets booked, up from 23 million in 2022, and up 400% compared to 2019.
Room nights booked grew by 17% year-on-year, reaching a record of more than 1 billion in 2023, 21% more than the number booked in 2019, before the impact of the pandemic. Overnight stays were just one of the metrics that reached record levels for the company.
Gross travel bookings for the year totaled $150.6 billion, up 24% from 2022. Revenue was $21.4 billion, up from $17.1 billion in 2022 and 40% higher than 2019, pre-pandemic, at $15.1 billion. Operating income in 2023 was $5.8 billion, up 14% from 2022.
Marketing expenses for the year were $6.8 billion, up from $6 billion in 2022. Adjusted EBITDA in 2023 was $7.1 billion, up 24% from 2022.
Fourth quarter 2023 results were also positive overall. Gross travel bookings were $31.7 billion in the quarter, up 16% from Q4 2022. Hotel nights booked were up 9% and airline tickets sold were up nearly 46% year-over-year.
Total revenue in the fourth quarter was $4.8 billion and adjusted EBITDA was $1.5 billion, both up 18% from Q4 2022.
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