Expedia Group’s first-quarter results, released on Thursday (May 2), indicate a healthy yet more stabilized global travel market, albeit with slightly subdued gross bookings.
On a call with analysts and investors, outgoing CEO Peter Kern noted that while “North America remains the slowest growing geography relative to major international markets,” the gap is narrowing post-pandemic recovery.
In terms of key metrics, total gross bookings reached $30.2 billion, a 3% increase from 2023, primarily driven by lodging bookings, which grew 4% year over year (YoY). Overall, revenue grew 8% YoY to hit $2.9 billion, led by business-to-business (B2B), Brand Expedia, and the group’s advertising businesses.
Expedia’s B2B vertical, which supports various travel and non-travel companies, continues to thrive. Notably, a key partnership emerged with Walmart last year, offering exclusive travel discounts to Walmart+ members.
“Our B2B business serves a lot of different types of partners, [from airlines, banks, online retailers and offline travel agencies],” remarked incoming CEO Ariane Gorin, formerly president of Expedia for Business.
“As we think about our investments in technology, in our supply, in our teams and in our partner relationships, we’ve got really great assets to continue being leaders in B2B.”
However, the recovery of the B2C segment, particularly Vrbo, has been slower than expected after recent replatforming efforts, impacting gross bookings.
Nonetheless, management remains optimistic about overall segment improvement throughout the year, “with the best early indicator being the conversion gains we’ve seen,” Kern noted, adding that the company will “continue to invest in Vrbo and our international growth markets to reignite those flywheels to set us up for continued growth in the years to come.”
Another area showing promise is the rewards space, where One Key, Expedia’s comprehensive loyalty program unifying Expedia, Hotels.com and Vrbo, is gaining traction. The program offers tiered member discounts, with silver and gold members receiving enhanced benefits, all backed by supplier-funded discounts.
“Those are when our hotels, for example, want to get access to more valuable members who travel more, who spend more. [That’s] one of the benefits of One Key,” Gorin explained.
Regarding digital initiatives, the company is increasingly testing the advantages of artificial intelligence (AI) implementation across all brands, although management acknowledged that using these technologies remains a learning curve.
“For example, a recommendation algorithm gets smarter faster because of our scale, but it has to be trained on the differences between a traveler shopping on Vrbo compared to one on Expedia. And tests that work on one brand may behave differently on another,” Gorin noted.
Additionally, the group continues to refine its tech platform as part of efforts to streamline IT infrastructure. This initiative has entailed replacing 17 customer relationship management (CRM) systems with a unified platform linking all brands and merging 13 machine learning (ML) platforms and four experimentation platforms into a single integrated system.
“Most importantly, all our brands are now on a single front-end stack with a unified test-to-learn platform that gives us the ability to rapidly launch tests and features across brands, platforms and geos,” Kern pointed out earlier this year.
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