Booking Holdings Inc. (BKNG): Business Model Canvas [Dec-2025 Updated]

As a former head analyst, I see the travel giant's latest moves not as incremental tweaks, but as a fundamental re-engineering of its business, which is key for you to understand right now. Booking Holdings Inc. is clearly pivoting hard on its AI-driven Connected Trip strategy, which just helped them post a record Q3 2025 revenue of $9.01 billion and an EPS of $99.50, beating expectations. You need to see how this shift-moving more revenue to the higher-margin merchant model, which hit $6.13 billion in Q3-is supported by massive resources like $17.2 billion in cash and how it directly impacts their value proposition to travelers. Dive in below to see the nine building blocks that explain how they plan to hit that expected 12% full-year growth.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Key Partnerships

You're looking at the backbone of Booking Holdings Inc.'s (BKNG) scale, which is built on deep, strategic alliances across the travel ecosystem. These partnerships are what allow the company to process massive transaction volumes and push its Connected Trip vision forward.

Global Network of Accommodation Providers

The sheer scale of Booking.com's supply is a key resource, cemented by its relationships with property owners globally. As of the second quarter of 2025, Booking.com listed over 31 million total properties, which includes homes, apartments, and other unique places to stay across more than 220 countries. Specifically within alternative accommodations, the listings reached 8.4 million in Q2 2025, marking an 8% year-over-year increase. To be fair, the growth in alternative stays is significant; in Q2 2025, these alternative spots accounted for 3.8 million properties and represented 37% of the company's total room nights.

Here's a quick look at the scale of that supply partnership:

Strategic Flight Content Extension

Booking Holdings locked in its flight content strategy with a major commitment to Etraveli Group. In June 2025, the company announced a strategic eight-year extension of its commercial partnership with Etraveli Group, which first began in 2019. This renewal is designed to accelerate the global flights offering, which was live in 57 countries as of the announcement.

Event-Led Travel Integration

Tapping into the growing trend of fans traveling specifically for events, or gig-tripping, Booking.com formed a partnership with viagogo in December 2025. Under this agreement, fans purchasing tickets on viagogo (internationally) or StubHub North America can instantly add hotels, flights, rental cars, and attractions through Booking.com. Viagogo data from 2025 showed rising cross-border event travel, with Madrid, Amsterdam, and Rome being top international destinations for UK fans.

This move supports Booking Holdings' broader strategy, which saw gross flight bookings grow by 33% year-over-year in Q2 2025.

Generative AI Collaborations

Booking Holdings is actively embedding generative AI (gen AI) into its platforms, partly through external alliances to build out agentic travel capabilities. For instance, Booking.com was among the first wave of apps available in OpenAI's ChatGPT app store. CEO Glenn Fogel noted relationships with AI organizations, including working with OpenAI, Microsoft, and Amazon on agentic developments. Early signals from these integrations show improvements in search speed, better conversion, and lower cancellation rates.

Payment Processing and Financial Institutions

The shift toward the merchant model-where Booking Holdings processes the payment directly-is foundational to the Connected Trip vision and relies heavily on payment processors and financial institutions. This model offers travelers more flexibility, like paying in their home currency. The strategic importance of this is clear in the financials: merchant revenues jumped 29.3% year-over-year in Q2 2025, exceeding $4.4 billion for that quarter.

The company is definitely leaning into handling the money directly.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Key Activities

You're looking at the core engine driving Booking Holdings Inc.'s performance through late 2025. The key activities here aren't just about listing inventory; they are about engineering a new kind of travel transaction, which you can see clearly in the numbers.

Developing the end-to-end Connected Trip ecosystem.

Booking Holdings Inc. is actively building out this unified travel experience. This focus is showing up in transaction mix. In the second quarter of 2025, transactions that included multiple services-like flights and hotels-reached a low double-digit share of total transactions. That segment is growing fast, showing annual growth exceeding 30% as of Q2 2025. The CEO highlighted this momentum in the third quarter of 2025 earnings call.

AI-driven personalization and dynamic pricing optimization.

Artificial intelligence is now deeply embedded in the user journey. As of mid-2025, AI-driven tools, such as the Smart Filter and automated chatbots, influence 85% of bookings on the platform. This technology is also driving internal efficiencies, helping to reduce customer service costs. The company is also actively integrating cutting-edge AI, including a partnership with OpenAI, to enhance travel planning capabilities.

Global performance marketing and customer acquisition.

Acquiring customers remains a major activity, though the spend profile is shifting. In the second quarter of 2025, the marketing expense line item increased by 10% year over year. To support growth, Booking Holdings Inc. increased spending on social media channels by 25% in Q2 2025 compared to the prior year. This investment supports the overall platform, which processed 323 million room nights in Q3 2025, an 8% increase year-over-year.

Managing the shift to the higher-margin merchant payment model.

This is arguably the most structural change happening in the business model, moving from an agency agent to a merchant-of-record. By late 2025, 72% of Booking Holdings Inc.'s transactions were running through its merchant-of-record model. This is a significant climb from 65% a year prior and 50% two years ago. The revenue split clearly shows this pivot in action. Here's how the revenue broke down in the third quarter of 2025:

The merchant revenue stream grew by 23.3% year-over-year in Q3 2025, while agency revenues actually decreased by 6.7% year over year. For the first quarter of 2025, merchant revenues were $2,918 million, a 22.2% increase, while agency revenues were $1,564 million, an 11.3% decrease.

Technology platform maintenance and security for high-volume transactions.

Keeping the platform secure and efficient requires significant internal investment, which is being funded partly by the ongoing Transformation Program. Booking Holdings Inc. raised its expected annual run-rate savings target from this program to a range of $500 million to $550 million compared to the 2024 expense base. Furthermore, the company is reinvesting heavily into innovation; for example, $170 million from the efficiency program is being reinvested into AI and fintech innovations. The platform handled $49.7 billion in gross bookings in Q3 2025. Finance: draft Q4 2025 cash flow forecast by next Tuesday.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Key Resources

Portfolio of leading global brands:

• Booking.com
• Priceline
• KAYAK
• Agoda
• OpenTable

Massive global supply:

• Over 8.4 million alternative accommodation listings (Q2 2025).
• Alternative accommodation room nights represented 37% of total room nights (Q2 2025).

Proprietary data, machine learning models, and AI technology, evidenced by momentum in GenAI features and the Connected Trip vision.

The scale of the business is reflected in the Q3 2025 top-line figures:

Strong liquidity:

• Cash and investments of $17.2 billion (Sept. 30, 2025).
• Total debt outstanding of $17 billion (Sept. 30, 2025).

Global workforce and deep travel industry expertise, supporting 323 million room nights booked in Q3 2025.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Value Propositions

You're looking at the core reasons why travelers choose Booking Holdings Inc. and why partners list with them, especially as of late 2025. It's about scale, integration, and rewarding loyalty. The numbers from the third quarter of 2025 really show this in action.

For Travelers: Seamless, personalized, end-to-end booking via the Connected Trip.

The value here is the move away from single-product bookings to a full journey orchestration. Booking Holdings Inc. is making it easier for you to stitch together different travel elements. This focus on the Connected Trip is showing real traction; in the second quarter of 2025, these multi-vertical transactions reached a low double-digit share of total Booking.com transactions, growing by over 30% year-over-year. This bundling is key to their strategy, especially as flight bookings soared by 44% in that same quarter. The goal is to be your single point of contact for the entire trip, not just the hotel.

For Travelers: Broadest choice across accommodation, flights, cars, and dining.

Honestly, the sheer volume of inventory is a massive draw. You aren't just looking at hotels; you're looking at a huge selection across the board. For alternative accommodations, which includes homes and apartments, Booking Holdings Inc. listed 8.4 million properties as of Q2 2025, up 8% year-over-year, making up 37% of total room nights in that quarter. This breadth is supported by strong performance in other verticals too, like rental car days hitting 23 million in Q3 2025.

For Partners: Access to a massive, global customer base for distribution.

For property owners and service providers, the value is direct access to a proven, high-volume audience. The platform processed 323 million room nights in Q3 2025 alone, representing $49.7B in gross bookings for that quarter. Furthermore, the shift to the merchant model means Booking Holdings Inc. is taking on more of the transaction risk and handling the payment, which now accounts for 72% of transactions on Booking.com as of late 2025, up sharply from 50% two years prior. This increased control is offered in exchange for partner participation.

For Travelers: Genius loyalty program offering discounted pricing and benefits.

The Genius program is designed to keep you coming back by offering immediate, tangible value, not just points for a future trip. Travelers at the higher Genius tiers-Level 2 and 3-now represent over 30% of active travelers and book a mid-50% share of Booking.com's total room nights. These members get instant discounts, like the 10% discount available at Level 1 on select stays and rental cars. The program's lifetime tiers mean once you earn a level, you keep the benefits for life, which definitely encourages repeat business.

For Partners: Technology tools for property management and revenue optimization.

Partners benefit from the technology that drives the platform's efficiency, which Booking Holdings Inc. is constantly refining. The company is focused on driving efficiencies through its Transformation Program, raising the expected annual run-rate savings to a range of $500 million to $550 million. This focus on operational discipline helps support the platform's profitability, with Q3 2025 Adjusted EBITDA margin reaching 47.0%. The technology also supports the merchant model, where approximately 70% of bookings facilitate payments, representing over $100 billion in business volume.

Here's a quick look at the scale of the business as of the latest reported quarter:

Finance: draft 13-week cash view by Friday.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Customer Relationships

You're looking at how Booking Holdings Inc. keeps its massive user base engaged and coming back, which is crucial when you're dealing with infrequent, high-consideration purchases like travel. The focus here is definitely on making the experience seamless and sticky, moving away from just being a search aggregator.

Automated self-service tools and AI-enhanced customer support

Booking Holdings Inc. is heavily deploying artificial intelligence to manage customer interactions at scale. They are using generative AI chatbots that can solve problems instantly for travelers, which helps keep operational expenses stable even as payment processing volumes climb. When a human agent does step in, these bots generate conversation summaries and next steps, handling work that previously took significant agent time. Management is also working with leading generative AI organizations on developing agentic capabilities, aiming to deliver an even more personalized connected trip experience.

• Gen AI tools are showing early results in boosting conversion levels.
• Gen AI tools are also credited with helping to lower cancellation rates.

Genius loyalty program to drive repeat bookings and direct traffic

The Genius loyalty program remains a cornerstone of the retention strategy, offering immediate, upfront value rather than complex future rewards. The program has three lifetime tiers, with Level 3 members getting benefits like 10-20% discounts on stays and priority support. The success of this is clear in the usage metrics; over the last four quarters leading up to Q2 2025, the mix of Booking.com room nights booked by travelers in the higher Genius tiers (Levels 2 and 3) was in the mid-50% range, and this mix continued to increase year-over-year. These highly engaged Genius travelers exhibit a meaningfully higher direct booking rate than other travelers.

Increased focus on direct B2C relationships (mid-60% direct mix in Q2 2025)

A major strategic push is strengthening the direct relationship with travelers, which reduces dependency on third-party channels and the cost associated with them. This is reflected in the direct booking mix. Over the last four quarters, the B2C direct mix was in the mid-sixty percent range, a solid increase from the low-sixty percent range one year prior. This shift is also evident in the payment model change; Booking Holdings Inc. is moving toward a merchant model where it processes payments directly. In Q2 2025, merchant gross bookings represented 69% of the total, up from 62% the year before. Furthermore, mobile app usage, a key driver of direct bookings, reached the mid-50% range for trailing twelve months in Q2 2025.

Here's a quick look at how these key relationship metrics stacked up in Q2 2025:

Personalized offers based on user data and machine learning

The company's 'Connected Trip' vision is showing strong momentum, which relies on using data and machine learning to create a more tailored journey. Connected trip transactions grew over 30% year-over-year in Q2 2025, now making up a low double-digit percentage of Booking.com's total transactions. This integrated approach allows Booking Holdings Inc. to move beyond just suggesting a room to proactively suggesting modifications to a trip based on predicted needs, like suggesting an indoor activity if rain is forecast for an outdoor booking.

Dedicated account management for large accommodation partners

While specific dedicated account management figures aren't public, the scale of the partner base shows the operational focus required. At the end of Q2 2025, Booking.com had approximately 8.4 million alternative accommodation listings, which was an 8% year-over-year increase. This growth in supply, outpacing overall room night growth, suggests a continuous effort to onboard and manage a larger, more diverse set of partners, likely involving dedicated support for the largest or most strategic properties to ensure the quality and inventory needed for the Connected Trip vision.

Finance: draft 13-week cash view by Friday.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Channels

The distribution of Booking Holdings Inc. inventory and services relies on a multi-pronged channel strategy, heavily weighted toward direct digital engagement as of late 2025.

The mobile application presence is significant; the mobile app mix of total room nights reached the mid-50% range in Q1 2025, an increase from the low 50% range in 2024. Furthermore, the company noted that the significant majority of bookings received from its mobile apps come through the direct channel.

Direct traffic and loyalty engagement show strong lock-in. The business-to-consumer direct mix was in the mid-60% range on a trailing twelve-month basis as of Q1 2025. For the Genius loyalty program, the mix of Booking.com room nights booked by travelers in the higher Genius tiers (Levels 2 and 3) was in the mid 50% range over the last four quarters.

Performance marketing channels, which include search advertising on platforms like Google, are a major component of overall spend. Booking Holdings Inc.'s marketing expense as a percentage of gross bookings was reported at 3.8% in Q1 2025. For context on the scale of investment, the full-year 2024 marketing investment was $7.3 billion, which represented 31% of revenue.

The primary brand websites-Booking.com, Priceline, Agoda, and KAYAK-serve as the core destinations for traffic. Within the broader transaction ecosystem, Connected Transactions, which bundle multiple travel services, grew more than 35% year-over-year in Q1 2025 and now represent a high single-digit percentage of Booking.com's total transactions.

Regarding metasearch platforms, the strategic clarity around KAYAK suggests a shift, evidenced by a $457 million KAYAK impairment, which reflects the view that AI is commoditizing meta-search.

Here is a look at key channel-related metrics from the first half of 2025:

The direct channel strength is further supported by loyalty engagement:

• The significant majority of bookings from mobile apps come through the direct channel.
• Genius Level two and three travelers have a meaningfully higher direct booking rate than other travelers.

The core brands driving traffic through these channels include Booking.com, Priceline, Agoda, and KAYAK.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Customer Segments

You're looking at the core groups Booking Holdings Inc. (BKNG) serves as of late 2025. It's a diverse set of users and partners, which is why the company is so massive, holding 35% market share among Online Travel Agents.

Global Leisure Travelers (seeking accommodation, flights, and cars)

This group is the engine, driving the majority of the volume across the platform. You saw strong performance here in the third quarter of 2025. Room nights grew 8% year-over-year to a total of 323M nights in Q3 2025. Gross bookings for that same quarter hit $49.7B. Booking.com was the most highly trafficked travel and tourism website in 2025, attracting almost four times the online traffic compared to Tripadvisor. The company's 2024 total room nights reserved was 1,144 million.

The focus on the Connected Trip is clearly working to capture more of their spending. Here's a look at some key volume metrics from 2024 and Q3 2025:

Accommodation Partners (hotels, vacation rentals, B&Bs)

These partners rely on Booking Holdings Inc. (BKNG) to fill their inventory, and the mix is shifting. Alternative accommodations, which includes vacation rentals and B&Bs, are a key growth area. In Q1 2025, this segment represented 37% of total room nights. The listings for alternative accommodations grew to over 8.6 million by Q3 2025. This segment's room nights grew 12% year-over-year in Q1 2025, outpacing the total room night growth of 7%.

The shift in revenue mix also points to these partners. Merchant revenues, which are largely accommodation bookings where Booking Holdings Inc. (BKNG) acts as the principal, made up 68.1% of total revenue in Q3 2025, totaling $6.13 billion.

Travel Suppliers (airlines, car rental agencies, tour operators)

This segment includes the suppliers that feed into the Connected Trip vision. For car rentals, rental car days in Q3 2025 were 23M, showing a 2.2% increase over the prior year. For airlines, the company reserved 49 million airline tickets in the full year 2024. The company is clearly pushing for more integration here, as evidenced by the growth in flight bookings mentioned in their reports.

Restaurants and Diners (via the OpenTable platform)

OpenTable is a distinct customer base focused on dining experiences. This platform helps more than 60,000 restaurants worldwide fill 1.9 billion seats a year. Diners are engaging more with the platform; seated dining volume was up 8% year-over-year in 2025. Furthermore, usage of the 'Notify Me' tool rose 84% year-over-year in 2025, showing increased feature adoption.

You can see the engagement metrics for OpenTable users:

• Average Americans are expected to dine out 10 times/month in 2026, based on 2025 data.
• Millennials plan to dine out 14 times/month on average in 2026.
• Experiential dining saw an increase of 46% year-over-year in 2025.

Business Travelers (via dedicated corporate booking tools)

While leisure is dominant, the B2B segment is a noted area of strength. In Q3 2025, US room night growth saw high single-digit acceleration led by continued momentum in the B2B segment. The trend toward blending work and personal travel is present, with 46% of buyers reporting employees interested in 'bleisure' trips. On the supplier/corporate side, 59% of corporate travel buyers reported employees attending more conferences as of Q4 2024, a trend expected to continue into 2025.

The outlook for this segment is positive; 67% of industry participants expected business travel to grow in 2025.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Cost Structure

You're looking at the expenses that drive the engine at Booking Holdings Inc. as of late 2025. It's a mix of high-volume variable costs and strategic fixed investments.

Variable marketing expense, which was 26.0% of revenue in Q3 2025.

Technology development and infrastructure costs are substantial, driven by the push for AI integration and platform stability. In Q3 2025, the company noted higher cloud computing costs. For the full year 2025, a strategic investment program of $170 million was planned, focusing on areas like data personalization and AI-powered tools.

Payment processing fees are a growing component due to the strategic shift toward the merchant model. In Q3 2025, merchant revenues, which involve Booking Holdings facilitating the payment, grew 23.3% year-over-year. This model shift means the merchant gross bookings represented about 68.1% of total revenues in Q3 2025, up from 56% in Q3 2024. This increased merchant mix resulted in higher payment expenses within Sales and Other expenses.

Personnel and general administrative expenses are being actively managed through efficiency programs. Adjusted fixed operating expenses in Q3 2025 increased 10% year-over-year. The Transformation Program is structured to realize savings from workforce reductions, estimated to be about one-third of the total savings goal.

The Transformation Program is a major cost management initiative. The ultimate annual run-rate savings target was raised to a range of $500 to $550 million, up from the initial $400-$450 million goal versus the 2024 expense base. For the full year 2025, the company expected to realize about $150 million in cost savings from this program. In the third quarter of 2025 alone, approximately $70 million in in-quarter savings were cited.

Here's a quick look at the key cost and savings metrics as of late 2025:

The company is seeing leverage in marketing expenses, with marketing expense as a percentage of gross bookings showing leverage in Q3 2025. Also, the goal is to grow fixed expenses slower than revenue in 2025.

• Merchant Gross Bookings over last four quarters: over $123 billion.
• Merchant Gross Bookings Share of Total Gross Bookings: about 68%.
• Expected savings from workforce reductions: approximately one-third of total program savings.

Finance: draft 13-week cash view by Friday.

Booking Holdings Inc. (BKNG) - Canvas Business Model: Revenue Streams

You're looking at the core ways Booking Holdings Inc. brings in money as of late 2025. It's really about how they process the transaction-whether they act as the merchant or just the agent-and that difference matters a lot for margins.

The company reported a record total revenue of $9.01 billion in the third quarter of 2025, which was a 12.7% increase year-over-year. For the full year 2025, Booking Holdings expects revenue growth of approximately 12%.

The revenue streams are clearly segmented, showing a major strategic pivot toward the merchant model, which is essentially becoming the payments infrastructure for travel transactions.

Here's a look at the key revenue components from the third quarter of 2025:

The shift to the merchant model is the big story here. By the end of Q3 2025, a massive 72% of Booking Holdings' transactions were running through its merchant-of-record model. This structural change is what's driving margin leverage, so to be fair, the market is starting to price this more like a fintech operation than a purely cyclical travel agent.

Transaction fees from flight and car rental bookings are a part of this, though they can sometimes temper the revenue percentage relative to gross bookings. For instance, in Q3 2025, the overall revenues as a percentage of gross bookings were down about 30 basis points year-over-year, partly due to a higher mix of flight bookings.

Consider the volume metrics that feed into these transaction-based revenues:

• Room nights sold in Q3 2025 reached 323 million, an 8% increase year-over-year.
• Car rental days booked in Q3 2025 were 23 million.
• The company sold 17 million airline tickets in the third quarter of 2025.

This mix shows that while accommodations are the largest volume driver, the growth in ancillary services like flights and cars impacts the overall revenue recognition profile. Finance: draft 13-week cash view by Friday.