BOOKING Holdings fell after the company said travel demand had been diminished by the Israel-Hamas war, even while forecasting growth and reporting third-quarter earnings that beat expectations.

“Globally, we saw a slowdown starting the second week of October, due to cancellations, drop in new bookings after the start of the war in the Middle East,” chief financial officer David Goulden said on a call with investors on Thursday (Nov 2).

The company has greater exposure in Europe and the Middle East than rivals such as Expedia Group. The vast majority of Booking’s total revenue – 89 per cent – is from non-US travel, according to data compiled by Bloomberg, with the Middle East, including Turkey and Egypt, at about 4 per cent of global room nights. Israel alone represented about 1 per cent prior to the war, Goulden said.

Shares fell as much as 7.5 per cent in post-market trading on Thursday in New York before paring losses to trade 4 per cent. They had gained 41 per cent this year till Thursday’s close.

Citi analysts led by Ron Josey said that shares may have been pressured “on higher expectations into the quarter”.

The outlook cast a pall on an otherwise upbeat earnings report. Third-quarter revenue totalled US$7.34 billion, surpassing estimates of US$7.26 billion. Gross bookings, room nights booked, rental car days and airline tickets sold – all key metrics for the travel giant – also beat estimates, which the company attributed to strong summer travel.

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Booking also expects a 9 per cent increase in room night growth in the fourth quarter from a year earlier, slightly ahead of estimates. Gross bookings for the year are expected to rise by more than 20 per cent, Goulden said, while noting that the guidance “assumes no further expansion of the war in the Middle East”.

“We are encouraged by the resilience of leisure travel demand,” chief executive officer Glenn Fogel said.

On Wednesday, home rental platform Airbnb delivered a third-quarter beat while also providing a worse-than-expected fourth-quarter outlook, citing softer demand and volatility from macroeconomic factors and geopolitical tensions. Shares of Airbnb were down 3.3 per cent at the close on Thursday. BLOOMBERG