Travel Industry Faces Pressure, but Booking Holdings (BKNG) Looks Too Cheap to Ignore

The travel industry is under pressure as geopolitical tensions have disrupted key flight routes alongside unsettling global markets. Yet I think Booking Holdings (BKNG) remains a long-term winner in travel and an attractive opportunity today, particularly at its current price levels. The market is pricing in a permanent collapse of global movement, but the fundamentals of the travel industry and exceptional growth prospects ahead suggest this dip is nothing more than a high-conviction entry point for the patient investor. For these reasons, I am bullish on BKNG stock.

The Hub Crisis and the Resilience of Global Demand

The current Middle East bottleneck isn’t trivial. With Dubai and Doha largely out of action as transit hubs, premium travel has taken a real hit. For years, both cities have been central to the high-value flow of traffic between Europe and Asia, helping sustain some of the most profitable long-haul routes. Currently, a significant chunk of premium European-to-Asian bookings, the high-margin, long-haul business that powers Booking’s bottom line, is stalled. Notably, airlines have been forced into expensive rerouting or outright cancellations, and Wall Street’s knee-jerk reaction has been to sell the primary facilitators of those trips.

Some investors seem to believe that travel demand vanishes during disruptions. That’s not true. Instead, it just finds another path. When one route closes off, traffic shifts elsewhere. That already seems to be happening this year, with more travelers choosing the Western Hemisphere and North Asian cities like Tokyo and Seoul. While the Gulf carriers are temporarily grounded, the desire for international experience is still strong. I believe investors are mistaking a logistical hurdle for a demand-side collapse, which is exactly the kind of sentiment gap that creates promising buying opportunities.

Also, we have to look at how Booking actually operates. Unlike an airline with fixed assets and massive fuel overheads, BKNG is an asset-light technology platform. When a traveler finds their Doha connection canceled, they most certainly don’t give up and just go home. Instead, they hop back on the app to find a direct flight via Istanbul or a new itinerary through Singapore. Booking wins regardless of the route taken.

I would bet the platform shows record-high traffic as travelers in Q1 scramble to re-navigate their itineraries, effectively capturing “re-booking” revenue that the market has yet to fully quantify. Booking’s airline ticket sales already have fantastic momentum, after all.

A World that Refuses to Stay Put

In the meantime, despite the headlines from the Gulf, the broader themes for this year remain robust. Global business travel spending is expected to hit a huge $1.69 trillion this year, driven by a corporate travel rebound that many thought would never return after the remote-work revolution. Corporate travel budgets may expand by about 5% this year as firms realize that even tools such as Zoom Video Communications (ZM) fall short over time; “Zoom fatigue” is real, and a handshake in London or a site visit in Tokyo is worth ten video calls.

Booking with its “Connected Trip” initiative, now fully integrated with agentic artificial intelligence (AI), is capturing more of this spend than ever before.

There is also the World Cup angle. With the 2026 FIFA World Cup getting closer, travel to the U.S., Canada, and Mexico is expected to rise sharply this summer. Booking.com is already seeing stronger early bookings for June and July in several host cities. That shift in travel demand matters, and it is something the broader Middle East narrative does not really capture.

Looking ahead to the rest of 2026 and into 2027, the industry is fundamentally healthier than it has been in a decade. The “revenge travel” era has matured into a “prioritized travel” era, where consumers view their annual trips as a non-negotiable expense rather than a luxury. In fact, Q1 shows that even with higher airfares, hotel occupancy rates in non-conflict zones are at all-time highs. This tells me that the traveler is resilient, the infrastructure is adaptable, and the tech stack that Booking has built is more essential to the global economy than ever.

Valuation Realities in a Fear-Driven Market

With market skepticism overshadowing any potential for optimism, BKNG has taken a bruising recently. The “hub paralysis” narrative indeed took hold. However, here’s the opportunity. The sell-off has created a disconnect that feels absurd. At today’s prices, BKNG is trading at just under 16x expected 2026 earnings per share (EPS) of around $267.84. For a company that consistently generates massive free cash flow and dominates the global online travel agency (OTA) landscape, that’s cheap.

In my experience, it is uncommon to find a high-margin market leader trading at such a significant discount to its growth trajectory. The math for the bull case is straightforward. Booking is projected to grow its EPS at a compound annual rate of about 17% between 2026 and 2028. When a company is growing earnings at 17% while trading at a 15.8x forward multiple, it implies a PEG ratio below one.

In any other instance, investors would be tripping over themselves to buy that kind of growth at that price. The market’s current obsession with short-term geopolitical risk is obscuring the fact that BKNG is a cash-flow machine that consistently outperforms its peers in direct traffic and marketing efficiency.

Of course, the “bears” will point to the risks because beyond the Middle East crisis is the ongoing pressure from AI-driven “agents” that could erode traditional search margins. Yet if we are honest, this is a company that survived the COVID-19 pandemic, arguably the most ruinous industry event imaginable. When global travel effectively came to a halt, Booking streamlined its operations and emerged with a higher market share. Today, it continues to grow at double-digit rates, proving that its resilience is baked into the DNA of the business and people’s hunger for travel.

Is Booking Stock a Buy, Sell, or Hold?

Despite the stock’s recent decline, Booking still has a Strong Buy consensus rating on Wall Street, based on 21 Buys and five Holds. Notably, no analyst rates the stock a Sell. In addition, BKNG’s average price target of $5,727.78 implies roughly 37% upside potential over the next 12 months.

Final Thoughts

The market seems overly focused on short-term volatility and is missing the bigger picture. Global travel remains a powerful long-term trend, and Booking Holdings is still one of the best-positioned companies to benefit from it. Travel disruptions will ease, major EU Asia routes should recover, and when that happens, the current valuation may look more like a panic discount than a fair view of the business. I’m staying the course, since the fundamentals are just too good to walk away from now.