Booking Holdings Inc. experienced a significant stock decline on February 23, 2024, with shares plummeting 10% in New York, marking the company's largest single-day drop since March 2020. The decline came after the travel giant provided a disappointing forecast for travel reservations and gross bookings, attributing the subdued outlook to factors such as the ongoing war in Israel and currency fluctuations.

During their earnings call on Thursday, Booking Holdings stated that the growth of room nights booked is expected to be 4% to 6% in the first quarter of the year. For the full year, the company anticipates gross bookings to increase "slightly faster than 7%", taking into account the negative impact of exchange rates and the war. This projection fell short of the average analyst estimate of 9.9%, further contributing to investor concerns.

The company's fourth-quarter room nights booked saw a growth of 9.2%, slightly below analysts' expectations of a 9.7% increase. Gross travel bookings for the same period amounted to $31.7 billion, surpassing projections of $31.3 billion.

Chief Executive Officer Glenn Fogel mentioned that the conflict in Israel significantly affected Booking's business in the region, impacting the growth outlook for the first quarter by a percentage point. The company also highlighted that changes in exchange rates are expected to exert a further negative impact on growth.

In a bid to reassure investors, Booking announced a quarterly dividend of $8.75 a share, payable on March 28 to shareholders of record on March 8. Despite the recent stock decline, the company had been on a positive trajectory, with shares rising 61% in the past 12 months, outstripping the performance of the S&P 500 Index.

These results come in the wake of a cautious outlook from industry competitor Expedia Group Inc., signaling challenges ahead in the travel sector following a robust period in early 2023. However, Booking Holdings remains optimistic about the future, with Fogel expressing confidence in the resiliency of global leisure travel demand as the summer season approaches.