UBS previews 1Q26 online travel: in-region travel may increase, BKNG remains the top pick
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UBS previews 1Q26 online travel: in-region travel may increase, BKNG remains the top pick
The report argues that the impact of the Middle East conflict on travel confidence in 2Q26 and 3Q26 matters more than 1Q26 results themselves; Booking Holdings faces more visible pressure, but valuation and buyback support keep it as the sector top pick.
- UBS expects geopolitical conflict, flight cancellations, jet fuel shortages in Europe, and the unavailability of Middle Eastern airports may lead more travelers in 2026 to choose travel within their region or continent.
- BKNG maintains a Buy rating and its status as the sector top pick, with the target price raised to $260; the report believes near-term gross bookings and revenue are under pressure, but roughly 15x GAAP P/E and potentially accelerated buybacks already reflect many concerns.
- ABNB maintains a Neutral rating, with the target price raised to $153; product innovation, Reserve Now, Pay Later, and the World Cup may provide support, but product investment in 2026 will weigh on margin expansion.
- EXPE maintains a Neutral rating, with the target price unchanged at $266; its gross bookings have returned to pre-pandemic levels, but more evidence is still needed for faster growth, margin expansion, and a narrowing valuation gap.
- UBS Evidence Lab data show that in 1Q26, consumer spending on BKNG grew about 6% across five European countries, while ABNB and EXPE were about -6% and -5%, respectively; SensorTower shows BKNG continuing to gain share in North America and Latin America.
Report interpretation
Overview
This report is UBS's 1Q26 earnings preview for online travel companies, covering Airbnb, Booking Holdings, Expedia, Tripadvisor, and Trivago. The core focus is not concern over results already realized in 1Q26, but an assessment of the potential impact of the Middle East conflict on consumer confidence, travel routes, and regional travel activity in 2Q26 and 3Q26. UBS incorporates these headwinds into its 2026 forecasts and assumes activity gradually normalizes in 2027.
Core views
UBS believes the online travel sector may see a stronger tendency toward in-region travel, as European flight cancellations, fuel shortages, and the unavailability of Middle Eastern hub airports could affect travel corridors such as Europe to APAC. Booking Holdings has the highest near-term downside revision risk because of its greater exposure to Europe and the Middle East, but its European franchise, Connected Trip strategy, direct traffic, and buyback capacity still support the medium- to long-term investment case, so it remains the top pick. Airbnb's product innovation and new services may reduce transaction friction, but heavier investment will limit margin upside in 2026. Expedia's bull case depends on reaccelerating growth, improving margins, and convergence of the valuation discount. Both Tripadvisor and Trivago lack sufficient near-term catalysts.
Analysis framework
The report combines company guidance, UBS forecasting models, AirDNA lodging demand data, UBS Evidence Lab European consumer transaction data, SensorTower mobile app MAU share data, and multiple analysis after rolling valuation forward to 2Q27E-1Q28E to update expectations for each company for 1Q26 and 2026-2027.
Methodology notes
European consumer transaction data
The data cover France, Italy, Germany, Spain, and the UK, measuring platform spending growth by consumer location and serving as a directional indicator of demand health; however, they differ from regional growth disclosed by companies based on supply location, and there is also a mismatch between card swipe timing and booking timing.
Airbnb nights, seats booked, and GBV proxy indicators
UBS uses AirDNA data to track Airbnb Nights and Seats Booked and Gross Booking Value, and builds relationships through regression against historical disclosed values to infer 1Q26 growth trends.
mobile app monthly active user share
SensorTower data are used to compare changes in mobile user share for Airbnb, Booking, Expedia, and Tripadvisor across North America, EMEA, APAC, and LatAm, helping assess share shifts among platforms.
Booking growth framework
UBS views BKNG's 8-8-15 growth formula as a baseline rather than a long-term aspiration, meaning the company can sustain structural growth in gross bookings, revenue, and EPS, while offsetting short-term demand headwinds through buybacks, marketing efficiency, and Connected Trip.
valuation parameter roll-forward
UBS rolls the valuation window from 1Q27E-4Q27E to 2Q27E-1Q28E, and applies multiples such as 15x EV/Adjusted EBITDA for ABNB, 21x P/E for BKNG, and 8x EV/Adjusted EBITDA for EXPE.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- BKNG.USsector top pick, maintained Buy
- Strengths
- Deep-rooted presence in the European market, Connected Trip expansion, direct traffic and marketing leverage, potential accelerated buybacks, and positive growth in European transaction data.
- Weaknesses
- Higher exposure to Europe- and Middle East-related travel corridors makes near-term gross bookings and revenue more vulnerable to downward revisions.
- Comparison
- Relative to ABNB and EXPE, BKNG is the strongest in European consumer transaction data and is gaining MAU share in North America and Latin America.
- Risks
- Prolonged geopolitical conflict, flight cancellations, fuel shortages, disruption to Europe-to-APAC routes, and weakening consumer confidence.
- ABNB.USNeutral, with product innovation providing support but investment weighing on margins
- Strengths
- Reserve Now, Pay Later reduces booking friction, Airbnb Services and Welcome Pickups expand service scenarios, and growth is faster in expansion markets such as Brazil.
- Weaknesses
- 2026 looks more like a year of product investment, and rising costs may weigh on margin expansion; European transaction data are down YoY.
- Comparison
- Compared with BKNG, ABNB has less exposure to Middle East impacts, but its European consumer transaction and North America MAU share performance are weaker.
- Risks
- A weaker U.S. consumer backdrop, short-term rental regulatory pressure, declines in markets such as France and Spain, and slower-than-expected returns on product investment.
- EXPE.USNeutral, awaiting clearer evidence of growth and margin improvement
- Strengths
- Gross bookings have recovered to pre-pandemic levels, and North America MAU share improved sequentially.
- Weaknesses
- European consumer transaction data declined YoY, and user share remains under pressure in multiple regions.
- Comparison
- Compared with BKNG, it lacks advantages in European share and transaction data; compared with ABNB, it lacks a more compelling product innovation narrative.
- Risks
- Growth below expectations, insufficient margin expansion, and failure of the valuation gap to converge.
- TRIPNeutral with a cautious bias
- Strengths
- After an activist investor joined the board, the likelihood of an asset or portfolio sale has increased.
- Weaknesses
- Core business traffic remains under pressure, putting pressure on the growth trajectory.
- Comparison
- In SensorTower regional MAU share, Tripadvisor ranks low in North America, EMEA, APAC, and LatAm and is generally losing share.
- Risks
- Continued declines in core traffic, inability to realize asset sales, and pressure from competing platforms.
- TRVGNeutral, with limited catalysts
- Strengths
- Holisto integration may provide some business support.
- Weaknesses
- Near-term catalysts are insufficient, and UBS still prefers to stay on the sidelines.
- Comparison
- Compared with BKNG and ABNB, TRVG lacks clear drivers for share gains, product momentum, or valuation re-rating.
- Risks
- Integration outcomes below expectations, weak travel advertising demand, and intensifying competition.
Key data
- BKNG rating and target priceBuy, PT $260The target price was raised from $259 to $260 and already reflects the April 2 25-for-1 stock split adjustment; BKNG remains the sector top pick.
- ABNB rating and target priceNeutral, PT $153The target price was raised from $149 to $153, with the valuation multiple unchanged at 15x EV/Adjusted EBITDA.
- EXPE rating and target priceNeutral, PT $266The target price remains unchanged, with a valuation multiple of 8x EV/Adjusted EBITDA.
- TRIP rating and target priceNeutral, PT $13.7The target price was cut from $16 to $13.7; pressure on core traffic remains, but the likelihood of an asset or portfolio sale has increased.
- TRVG rating and target priceNeutral, PT $3.4The target price was cut from $3.6 to $3.4; Holisto integration may help, but near-term catalysts are limited.
- ABNB 1Q26E core forecastGBV $27.4bn, revenue $2.6bn, adjusted EBITDA $475mnThis corresponds to roughly 12% YoY GBV growth, about 9% YoY revenue growth, and an adjusted EBITDA margin of about 18%.
- BKNG 1Q26E core forecastGross Bookings $52.7bn, Room Nights 341mn, revenue $5.5bn, adjusted EBITDA $1.2bnGross bookings are expected to grow about 13% YoY, with room nights up about 7% YoY.
- European consumer transaction dataBKNG +6%; ABNB -6%; EXPE -5%Covering France, Italy, Germany, Spain, and the UK, the data show BKNG performing best on a relative basis.
- ABNB AirDNA regression inferenceNights and Seats Booked 151.5mn, +5.9% YoY; implied GBV $28.8bn, +17.6% YoYHistorical correlation between AirDNA and disclosed values has been relatively high, though in recent quarters AirDNA forecasts have come in below actual reported figures.
- SensorTower North America MAU shareAirbnb 33.0%; Booking 27.0%; Expedia 38.8%; Tripadvisor 1.1%In 1Q26, Booking increased 278.3 bps YoY, Expedia increased 276.1 bps QoQ, while Airbnb declined both YoY and QoQ.
- SensorTower EMEA MAU shareAirbnb 32.0%; Booking 55.1%; Expedia 5.4%; Tripadvisor 7.5%Booking remains clearly ahead, while Airbnb improved share both YoY and QoQ.
- ABNB valuation scenariosUpside $179; Base $153; Downside $110The base case assumes a 2.25-year GBV CAGR of 11%, take rate of 13%, adjusted EBITDA margin of 35%, and a 15x multiple.
Impact & implications
The report's investment implication is that in the short term, the market should focus on the second-order effects of the Middle East conflict on travel corridors and consumer confidence, rather than only looking at actual 1Q26 results. If the substitution effect toward in-region travel strengthens, platforms with greater European exposure may face more revenue downgrades, but platforms with high direct traffic, buyback capacity, and expanding product ecosystems are more likely to absorb the pressure. Under the UBS framework, BKNG offers the best risk-reward due to its valuation pullback, buyback optionality, and resilience in European transaction data.
Risks
- The Middle East conflict continues to affect consumer confidence and cross-region travel demand.
- European flight cancellations, jet fuel shortages, and the unavailability of Middle Eastern airports may disrupt travel corridors such as Europe to APAC.
- Travelers may shift toward travel within their region or continent, widening differences in regional exposure across platforms.
- Short-term rental regulation in markets such as Spain continues to weigh on Airbnb-related demand.
- Concerns about AI disintermediation may continue to pressure valuations of online travel platforms.
- Airbnb's product investment and rising costs may weaken margin expansion in 2026.
- Pressure on Tripadvisor's core traffic and the lack of catalysts for Trivago may persist.
What to watch
- BKNG's April 28 earnings and management commentary on 2Q26 and 3Q26 booking trends.
- ABNB's May 7 earnings, May Summer Release, and user adoption of Reserve Now, Pay Later.
- The actual impact of the Middle East conflict on European outbound travel, EU-APAC travel corridors, and flight supply.
- Whether consumer transaction data from the five European countries continue to show BKNG outperforming ABNB and EXPE.
- Whether SensorTower regional MAU share confirms platform share shifts in North America, EMEA, APAC, and LatAm.
- Follow-up AirDNA readings on ABNB nights and seats booked in core and expansion markets, especially the U.S., Brazil, Italy, and Spain.
- BKNG's buyback pace, Connected Trip disclosures, and progress in OpenTable-related expansion.