Booking Holdings (BKNG  ) reported second-quarter results that were slightly better than expected. Analysts were expecting a weak quarter due to the coronavirus shutting down the travel industry. Shares were also helped the State Department's announcement that it was lifting the global health travel advisory due to improving conditions.

Booking Holdings owns several online, travel properties including Booking.com, Agoda, Priceline, Kayak, and OpenTable. It's the leading, online travel website in North America and Europe. Most of the company's revenue comes from commissions with a smaller amount coming from advertising.

Inside the Numbers

Booking reported earnings per share of -$10.8 and revenue of $630 million which beat consensus expectations of -$11.8 per share and revenue of $560 billion. In terms of gross booking declined by 91% compared to the previous year to $2.31 billion vs $3 billion consensus. In the first quarter, Booking's gross travel bookings declined by 51%.

Hotel room bookings were down 87%, car rentals dropped 90%, and airline sales dropped 69.7%. On top of these downtrends, the price of these items has also significantly dropped which results in less of a commission for the company.

The company has been aggressively cutting costs, as it does its best to survive this downturn. Last week, it announced plans to lay off 4,250 employees, about 25% of its workforce. One silver lining is that Booking's CEO said that trends have improved since April albeit it a slow pace.

Stock Price Impact

Given these results and the uncertain state of the travel industry, it's remarkable that Booking is only down 15% year-to-date. Investors are willing to look past these short-term headwinds and focused on the company's strong position and ability to make it through this rough patch.

The company's recovery depends on variables like the virus' spread being contained and people's confidence to resume traveling. What the financial crisis and housing bust did to the banks and housing industry - is now happening to the travel industry.

However, what's more, certain is that Booking will remain the premier online destination for travel booking, once traveling starts returning to prior levels. During and after the financial crisis, the biggest and strongest banks were able to keep growing, while smaller ones were acquired or went bust. Investors are betting that history will repeat. Smaller travel websites like Expedia (EXPE  ) and TripAdvisor (TRIP  ) are down more with weaker recoveries.

On a longer timeframe, Booking's stock has been a massive winner and deserves to be in the same category as Amazon (AMZN  ), Google (GOOG  ), or Facebook (FB  ). All of these are Internet stocks that dominate their niche. Their businesses, revenues, and stock prices have grown with the Internet's growth.

20 years ago, most people booked trips through a travel agent. Now, most people book it themselves online. In 20 years, Booking's stock has increased by 2,800%, and revenues went from $410 million to $14.5 billion (in 2019).

History shows that people's behavior returns to normal following a crisis. For example, housing prices are in a new bull market despite so many getting burned during the Great Recession. Additionally, airline travel returned to normal levels a couple of years after September 11 terrorist attacks. Although it's hard to imagine now, traveling will likely return to prior levels within a couple of years.