- Expedia Group Inc. shares hit their lowest level since November after the company posted disappointing first-quarter bookings and lowered its full-year revenue growth guidance.
- The online travel giant blamed a slower-than-expected recovery in its vacation rental business.
- Expedia shares have declined as much as 14 per cent to $116.50 in New York so far on Friday, May 3.
Expedia shares plummet after disappointing Q1 bookings and lowered full-year revenue growth guidance, with the company blaming a slower-than-expected recovery in its vacation rental business.
Expedia Q1 numbers – Key Metrics
The Seattle-based company posted first-quarter gross bookings of $30.2 billion, missing analysts’ average estimate of $30.5 billion. The company cited a “slower than anticipated” recovery in its vacation rental business Vrbo. That, combined with slower-than-expected growth in the rest of its consumer business, led the company to lower its full-year sales guidance with margins relatively in line versus last year.
Vrbo’s Slow Recovery
Vrbo’s recovery has been slower than expected and has put pressure on gross bookings, Expedia Chief Executive Officer Peter Kern said on Thursday. Vrbo has lost share to Airbnb Inc. and Booking Holdings Inc., the parent company to brands like Kayak and Priceline. Kern also pointed to a years-long and resource-intensive back-end update that was completed around late last year, which served to unify Expedia’s two other main brands, Expedia.com and Hotels.com, onto a single technical platform.
Outlook
The company has vowed to spend a record amount on marketing this year to narrow the gap in vacation rentals with Airbnb as it emerges from its costly technical update. However, the broader environment has seen headwinds as the lifting of pandemic-induced travel restrictions has led to more travelers seeking out urban adventures, as opposed to the sort of rural destinations and resorts where most Vrbos are located.
Conclusion
The recovery of the global travel market has also been uneven. Growth in the US has stagnated while demand in Europe and Asia Pacific markets has been more enduring. This has hurt Expedia more than peers such as Booking as most of its business is based in the US, while Booking is more exposed to Europe.
