Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Booking Holdings Fell 21% in March

By Royston Yang – Apr 3, 2020 at 6:41AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Vacation bookings are not going to recover back to pre-COVID-19 levels anytime soon.

What happened

Shares of Booking Holdings (BKNG 3.96%) fell 20.7% in March, according to data provided by S&P Global Market Intelligence.

This brings its year-to-date tumble to around 35% for the online travel agency.

A woman holding a cellphone while typing on a laptop. A passport and photos appear in the foreground, and a globe in the background.

Image source: Getty Images.

So what

With the explosion of cases of COVID-19 around the world, many countries are closing their borders and instituting travel bans. Airlines have been forced to ground almost their entire fleets, while hotels have seen a rash of cancellations and plunging reservations for upcoming months.

These measures have prompted Booking to withdraw its first-quarter fiscal year 2020 guidance, as the situation is rapidly evolving. The company will provide an update during its first-quarter briefing once it has quantified and assessed the impact from the COVID-19 outbreak.

To add to Booking's problems, the unemployment rate is also soaring in the U.S., with 6.648 million unemployment claims in the week ended March 28. In the week before that, there were 3.3 million claims. The last three weeks of March alone have seen a 3,000% increase in first-time claims for unemployment benefits over early March.

With nearly 10 million Americans losing their jobs in the last two weeks, this will surely crimp consumers' propensity and ability to spend. Many people are not going to be able to afford a vacation anytime soon, which will add further pressure on Booking's financial numbers.

Now what

With most of the developed world essentially shutting down to contain the spread of the virus, online travel agencies such as Booking will feel the pain.

CEO Glenn Fogel believes that this will ultimately be a temporary disruption and that travel demand will be back to normal after the virus is contained. However, judging by the high number of unemployed people and the severe damage to many economies around the world, it may be rather optimistic of him to believe that things will get back to normal anytime soon.

Royston Yang has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Booking Holdings. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Booking Holdings Stock Quote
Booking Holdings
BKNG
$1,745.50 (3.96%) $66.57

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
331%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.