Shares of Booking Holdings (NASDAQ: BKNG) were sliding 2% heading into midday trading Thursday, as the broader market was in a holding pattern with the Dow Jones Industrial Average essentially flat with a 4.8 point gain at 11:39 a.m. ET.
Shares of the online travel site have lost over a fifth of their value this year — and 10% just this month — as fears of a recession grow due to inflation running at 40-year highs and gas prices at record levels.
Although there is a growing consensus on an economic downturn in the near future, Wall Street still thinks Booking will be able to navigate the headwinds because of its extensive geographic diversity.
JMP Securities analyst Nicholas Jones told investors in a research note yesterday that its industry-leading position should allow Booking to gain further share and benefit from growing demand. The International Air Transport Association sees the U.S. airline industry being the strongest and forecasts a return to profitability this year, while Deloitte says air passenger volumes are rising and hotel occupancy rates are climbing as visitors head out on vacation again for the summer.
Most of Booking’s business comes from Europe and the Asia Pacific market, and those regions have been much slower to emerge from the COVID-19 pandemic due to harsher, longer-lasting restrictions and lockdowns.
Although Europe is now recovering, inflation and staff shortages are two risks that could imperil further growth.