Investors with skin in the travel industry game are hurting this year. The best performing of the three cruise line stocks is trading 68% below its January highs. The top airline stock has shed more than half of its peak value. A car rental bellwether just filed for bankruptcy protection over the weekend. 

Online travel specialists aren't tethered to a single brand or even industry niche, but those models are naturally taking it on the chin. Expedia (NASDAQ: EXPE) -- the world's second-largest online travel portal with $11.7 billion in trailing-12-month revenue -- entered the holiday weekend trading 46% below its previous high. Smaller players have been faring even worse since the COVID-19 pandemic slammed the brakes on most travel plans. Travel reviews leader TripAdivsor (NASDAQ: TRIP) and hotel aggregator Trivago (NASDAQ: TRVG) are down 61% and 66%, respectively, from their peak levels. 

Industry leader Booking Holdings (NASDAQ:BKNG) seems to be defying gravity here. The stock has already clawed back through most of its pandemic-related sell-off. Booking heads into the abridged trading week just 22% below its January highs. With its near-term prospects severely challenged, it doesn't make sense for Booking to be bucking the trend.

 

A woman working on a phone and laptop with a globe in the background.

Image source: Getty Images.

Checking in doesn't check out

We know that things are bad at Booking Holdings. Revenue declined 19% in the first quarter, and that was with travel happening largely as usual through a good chunk of the first three months of the year. It bears pointing out that Booking Holdings is a global player. Priceline, Kayak, and OpenTable lean mostly on stateside travelers, but its namesake Booking.com hub is a bigger force in Europe and Agoda is a juggernaut in Asia. Some overseas travel markets cooled before the U.S. during the quarter, but it all points to a grim near-term prognosis. 

Gross travel bookings during the quarter actually plummeted 51% in the first quarter, and there's no reason to think that things will get better anytime soon. What makes one particular online travel portal so special? What makes it so resilient when just about every travel-related stock in the investing universe has shed roughly half of its value, if not more? Booking Holdings isn't coated with Teflon. It's coated in jet fuel and hotel bed sheets, with a Hertz bankruptcy filing in the rental's glove compartment. Yes, Priceline also operates RentalCars.com.

Analysts are concerned. They see revenue at Booking Holdings declining 29% in 2020. Earnings are expected to be cut by more than half. This isn't a knock on Booking Holdings. It can't single-handedly convince people to travel for leisure anytime soon -- even if a global recession wasn't percolating. It can't sway businesses to embrace corporate travel with the same aplomb now that we all know what can be done remotely. There will also be a shakeout among travel providers, and that will limit what Booking Holdings or any portal can offer. 

This isn't just Booking Holdings taking a big step back. Analysts see Expedia, Trivago, and TripAdvisor taking a 25% to 34% hit on the top line this year. However, those stocks got buzzcuts. Booking Holdings still has a full mullet. 

It's probably worth noting that Booking Holdings wasn't doing so great even before the pandemic smackdown. You have to go back more than a year to find the last time that Booking.com posted double-digit revenue growth, and that was with an expanding global economy. How is it going to fare in this contracting global economy?

If you believe that travel will bounce back with the same fervor as before, then why buy Booking Holdings when Expedia would have to nearly double -- or TripAdvisor and Trivago would have to more than triple -- to get back to earlier highs? If you really like to gamble, the cruise line and airline stocks are there for your speculating pleasure. Booking Holdings is the class act of this realm, but it's priced as if the hit to the travel market is merely a flesh wound. The situation warrants more than a 22% discount.