For two months, the consensus trade on travel stocks was that the Iran war shock had been largely priced in.
Booking Holdings Inc. (NASDAQ:BKNG) just reminded the market it has not.
Shares of the world’s largest online travel agency tumbled more than 6% in pre-market trading after a 2026 guidance cut exposed how a four-month war is reshaping global booking flows.
The Norwalk-based parent of Booking.com, Priceline, Agoda, KAYAK and OpenTable reported first-quarter results late Tuesday that beat Wall Street estimates on every line, then cut the midpoint of its full-year 2026 outlook on the same call.
The reason: the Strait of Hormuz blockade is doing more damage to global travel flows than the headline numbers suggest.
The stock traded at $166.00 in Wednesday’s pre-market, down 6.49% from Monday’s $173.38 close. Year-to-date losses now exceed 20%.
Why Is Booking Holdings Falling Despite Strong Earnings?
The first-quarter 2026 print, on its own, was a beat.
Booking delivered 338 million room nights, gross bookings of $53.8 billion (+15% year-over-year), revenue of $5.5 billion (+16%) and adjusted EBITDA of approximately $1.3 billion (+19%).
Adjusted EPS of $1.14 grew 14%. All four metrics topped Street consensus estimates.
The problem sits underneath. “We estimate that the Middle East conflict impacted our room night and gross bookings growth by approximately 2 percentage points,” CEO Glenn Fogel said.
“Excluding this impact, we believe our room nights would have been up by approximately 8%,” he added.
March is where the damage shows.
Room night growth collapsed to 1% that month, with management estimating a six-percentage-point hit from the conflict — half from reduced new bookings, half from elevated cancellations.
“We saw an increase in cancellation rates and lower travel demand resulting in March room night growth of 1%,” said CFO Ewout Steenbergen.
The 2026 Outlook Just Got Smaller, And So Did Margin Expansion
For the second quarter of 2026, Booking now expects room night growth of just 2% to 4%, with gross bookings, revenue and adjusted EBITDA all guided to grow 4% to 6%.
Management is modeling continued direct and indirect Hormuz fallout through the end of June, followed by a recovery in the second half.
“We expect the impact of the situation in the Middle East will be higher in the second quarter than it was in the first
quarter as the conflict spans the full quarter, though this is partially offset by our expectation that March had the
highest concentration of cancellations which drove the first quarter marketing deleverage,” Steenbergen said.
For the full year, Booking lowered the midpoint of its guidance ranges.
Adjusted EBITDA margin expansion is now expected to land between zero and 25 basis points — half of the roughly 50 basis points the market had been modeling.
“Given the uncertain macro backdrop, we have begun executing targeted cost management actions, including strictly managing discretionary spend and re-calibrating business-as-usual hiring,” Steenbergen said.
Goldman Sachs Names The Two Risks That Will Define The Stock
Goldman Sachs analyst Eric Sheridan expects investor debates to remain centered around the broader macroeconomic picture in the near term — specifically the reversal of Middle East trends and the durability of global consumer demand.
Longer term, the worry is different. Many investors, Goldman wrote, “remain concerned about the impact that AI could have on marketplace businesses like the OTAs.”
The bank pushed back, citing Booking’s internal AI execution, external partnerships and management track record as the way the wall of worry gets climbed.
Goldman reiterated its Neutral rating and trimmed its 12-month price target from $226 to $223.
What Does This Mean For Investors?
The Booking print sets up a clean read-across for the broader online travel agency complex.
Expedia Group Inc. (NASDAQ:EXPE), Airbnb Inc. (NASDAQ:ABNB) and Tripadvisor Inc. (NASDAQ:TRIP) all carry varying degrees of exposure to the Europe-Asia transit corridor that Booking flagged as the indirect channel of damage.
The signal investors should focus on is not the size of the cut but its shape.
Booking kept the high end of its full-year ranges intact for gross bookings and adjusted EPS, while pulling down the midpoint.
That means the bull case for travel still exists — it just requires the Hormuz situation to clear by the end of June, exactly as management is modeling.
Photo: PixelBiss / Shutterstock.com
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