Core Thesis - Booking Holdings Inc. is undergoing a structural transformation from a cyclical travel company to a high-margin payments platform, which is expected to enhance its profitability and market valuation [2][6]. Financial Performance - As of November 28th, Booking Holdings Inc.'s share price was $4,914.69, with trailing and forward P/E ratios of 31.99 and 18.76 respectively [1]. - EBITDA margins have reached 47%, indicating that facilitating payments is generating incremental revenue faster than incremental costs [3]. Business Model Transformation - The company has shifted to a merchant-of-record model, with 72% of transactions processed through this model, up from 50% two years ago, allowing Booking to control the entire payment flow [3]. - This shift is leading to increased float income, working-capital leverage, and scalability, characteristics more typical of fintech companies [3]. Strategic Initiatives - The merchant model enhances the Connected Trip bundling and Genius loyalty programs, which improve customer retention and lifetime value [4][5]. - The $457 million impairment related to KAYAK is viewed as a strategic decision rather than a sign of weakness, as AI is commoditizing meta-search, while Booking's value lies in its ability to orchestrate multi-vertical travel transactions [4]. Market Positioning - Booking is positioning itself as the transaction and settlement layer for global travel, leveraging network effects, data scale, and regulatory complexity [6]. - If the merchant mix surpasses 75% and Connected Trip adoption continues to accelerate, the market may re-rate Booking as a global payments platform rather than just a travel company [6]. Historical Context - A previous bullish thesis highlighted the travel rebound and Booking's global platform strength, with the stock price appreciating approximately 7.46% since that coverage [7].

Core Insights - The interview features Glenn Fogel, CEO of Booking Holdings, discussing the company's evolution, business model, and future direction, emphasizing its role as a leading aggregator in the travel industry [1][2][3] Group 1: Company Background and Evolution - Booking Holdings was formed through the acquisition of Booking.com in 2005, which was a strategic move to expand internationally and adopt a different business model compared to Priceline's original "name-your-own-price" approach [33][43] - The company initially struggled with cash flow due to the agency model, where hotels were paid after guests checked in, contrasting with the merchant model used by competitors like Expedia [40][41][42] - Booking's growth was facilitated by its ability to aggregate a large inventory of hotels, providing consumers with more choices and better visibility [44][53] Group 2: Business Model and Market Dynamics - The agency model allowed Booking to scale quickly by requiring minimal upfront commitments from hotels, which was crucial in a fragmented European market [45][53] - The company has adapted its payment systems to accommodate various payment methods, enhancing customer experience and hotel partnerships [50][51] - Booking's competitive advantage lies in its ability to provide value to both consumers and hotel partners, ensuring a fair transaction that benefits both sides [69][70] Group 3: Relationship with Google and Marketing Strategy - Booking Holdings has historically been one of the largest spenders on Google ads, adapting its strategy in response to changes in Google's search algorithms [61][64] - The company emphasizes the importance of ROI in its marketing expenditures, ensuring that hotel partners understand the value generated through their collaboration [71][72] Group 4: Industry Challenges and Opportunities - The emergence of Airbnb is viewed as an opportunity rather than a crisis, with Booking successfully capturing a significant share of the alternative accommodations market [82][83] - The company continues to innovate and improve its offerings, focusing on enhancing customer experience and expanding its service portfolio [90][91]