Booking.com faces $530mn penalty from Spanish Authorities

In a significant regulatory action, Booking.com faces a substantial $530 million fine imposed by Spanish authorities, according to an announcement from Booking Holdings. The penalty, issued by the Spanish National Markets and Competition Commission (CNMC) during the fourth quarter, addresses allegations of competition law infringements by the prominent online travel agency and accommodations provider.

Booking Holdings CEO, Glenn Fogel, expressed strong disagreement with the CNMC’s preliminary findings and the magnitude of the proposed fine, highlighting it as vastly disproportionate to the accusations made. During a conference call with financial analysts, Fogel emphasized the company’s intention to challenge the decision should it be finalized, noting the potential for a lengthy appeals process. David Goulden, the company’s Chief Financial Officer, remarked on the unprecedented nature of the draft decision in Spain, indicating that it may necessitate adjustments to Booking.com’s business operations within the country.

This development occurs amid increased scrutiny from European Union regulators, with Booking.com also navigating the complexities of compliance with the Digital Markets Act (DMA). Fogel disclosed the company’s plans to formally request designation under the DMA, suggesting that the issues raised by the Spanish authority may intersect with broader regulatory concerns under the DMA framework.

Booking.com, recognized as the leading online travel agency in Spain and across Europe, now faces the challenge of aligning its business practices with evolving regulatory standards while contesting the substantial fine imposed by Spanish regulators. This case underscores the ongoing tension between large digital platforms and regulatory bodies striving to ensure competitive markets and fair business practices.

Booking Holdings reported yesterday its fourth quarter and full year 2023 financial results.

Fourth Quarter 2023
• Gross travel bookings, which refers to the total dollar value, generally inclusive of taxes and fees, of all travel services booked by our customers, net of cancellations, for the fourth quarter were $31.7 billion, an increase of 16% from the prior-year quarter.
• Room nights booked increased 9% from the prior-year quarter.
• Total revenues were $4.8 billion, an increase of 18% from the prior-year quarter.
• Net income was $222 million, a decrease of 82% from the prior-year quarter.
• Net income per diluted common share was $6.28, a decrease of 80% from the prior-year quarter.
• Non-GAAP net income was $1.1 billion, an increase of 18% from the prior-year quarter.
• Non-GAAP net income per diluted common share was $32.00, an increase of 29% from the prior-year quarter.
• Adjusted EBITDA was $1.5 billion, an increase of 18% from the prior-year quarter.

Full Year 2023
• Gross travel bookings for the full year 2023 were $150.6 billion, an increase of 24% from the prior year.
• Room nights booked increased 17% from the prior year.
• Total revenues were $21.4 billion, an increase of 25% from the prior year.
• Net income was $4.3 billion, an increase of 40% from the prior year.
• Net income per diluted common share was $117.40, an increase of 54% from the prior year.
• Non-GAAP net income was $5.6 billion, an increase of 39% from the prior year.
• Non-GAAP net income per diluted common share was $152.22, an increase of 52% from the prior year.
• Adjusted EBITDA was $7.1 billion, an increase of 34% from the prior year.

During the fourth quarter and full year 2023, the company accrued a loss of $276 million related to the Netherlands pension fund matter and a loss of $530 million related to a draft decision by the Spanish competition authority, both of which have been excluded from Non-GAAP net income and Adjusted EBITDA. For more information regarding these matters, see Note 16 to the Consolidated Financial Statements to be filed with the Annual Report on Form 10-K for the year ended December 31, 2023.

“We are pleased to report a strong close to 2023 with fourth quarter room nights growing 9% year-over-year or 11% when excluding business associated with Israel, which was significantly impacted by the war. For the full year, we reached a significant milestone with over 1 billion room nights booked on our platforms, and we achieved record levels of gross bookings, revenue, and operating income,” said Glenn Fogel, Chief Executive Officer of Booking Holdings. “We are confident in the long-term growth of leisure travel and in the opportunities ahead for our company as we continue our work to deliver a better offering and experience for our supply partners and our travelers.”

The article Booking.com faces $530mn penalty from Spanish Authorities first appeared in TravelDailyNews International.