This Online Travel Powerhouse Should Crush Airbnb Over the Next Several Years
Key Points
Booking is riding strong travel industry tailwinds, with Technavio projecting 11.1% CAGR for the industry through 2028.
Airbnb has delivered better returns over the past year despite Booking having better fundamentals and growth rates.
Booking's guidance, combined with long-term annualized revenue growth, suggests healthy market share gains over the next decade.
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The travel industry has been on a roll the past couple of years and is projected to maintain an 11.1% CAGR through 2028, according to Technavio.
While Airbnb (NASDAQ: ABNB) may be getting most of the attention right now from investors looking to tap into travel and tourism growth, other lodging providers can perform well, too, at a cheaper valuation. In fact, Booking Holdings (NASDAQ: BKNG) appears to be the better pick for investors who want exposure to the travel industry. Here's why.
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Booking Holdings: Low valuation meets solid growth
Booking has a lower valuation than Airbnb, with a forward price-to-earnings (P/E) ratio of 17.8 compared to Airbnb's 27.6. The travel booking platform also has a lower PEG ratio, which compares the P/E ratio to expected annual earnings growth, at 0.79. Companies with a PEG ratio below 1.0 are often considered undervalued.
Valuation isn't the only edge Booking Holdings investors get with this company. It's still growing at a solid pace while boosting profits. The company reported 13% revenue growth in full-year 2025, which included 16% year-over-year growth in Q4. The elevated Q4 growth rate represents solid acceleration going into 2026.
Booking.com is the primary revenue driver for the company, but it also owns Priceline, Agoda, and other online travel agency platforms. These companies help customers find competitive deals on lodging, airplane tickets, and other parts of the travel experience.
Airbnb only delivered 10% revenue growth in full-year 2025, yet the stock is up roughly 23% over the past year. Booking stock is down about 4% over the same stretch despite posting stronger fundamentals. This mismatch may indicate a buying opportunity for Booking. Furthermore, both companies had nearly identical net profit margins for the entire year, with Airbnb only edging out Booking by a single percentage point.
Guidance points to more market share
Booking's promising 2025 results came with guidance that suggests more of the same. Q1 2026 revenue is projected to be up by 14% to 16% year over year, with full-year revenue growth expected to be in the low double digits. Adjusted EBITDA growth is expected to be higher than revenue growth, indicating healthier margins this year.
The company's optimistic outlook aligns with 2025's successes. These developments haven't been fully priced in, based on the share price returns over the past year.
Booking's performance isn't even a one-year fluke. It has 16.4% annualized revenue growth over the past three years, and guidance suggests it has real potential to continue to move in that direction over the next decade.
Should you buy stock in Booking Holdings right now?
Before you buy stock in Booking Holdings, consider this:
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb and Booking Holdings. The Motley Fool has a disclosure policy.
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