One plus one can equal three sometimes when it comes to spinoffs, especially during the current era where there appears to be an IPO and valuation bubble. Expedia Group seems to be resisting an impulse to spin off Vrbo, let alone Egencia, for now, but the pressure could be substantial.
Online Travel This Week
Sitting on the sidelines, you can't blame rival online travel executives for salivating about Airbnb's current $107 billion valuation.
It could therefore be tempting for Expedia Group senior executive Barry Diller to spin off the company's Vrbo vacation rental business to create additional shareholder value, as Wells Fargo analyst Brian Fitzgerald advocated last week.
After all, Diller has been an avid spinoff practitioner, having spun out Expedia from IAC in 2005, and likewise liberating Tripadvisor from Expedia's clutches in a similar manner in 2011.
Expedia Group CEO Peter Kern told me a couple of times during interviews prior to the Airbnb IPO that he was keen to find out what Airbnb's valuation might be. But an Expedia spokesman told me Monday that the company has no intention of letting go of Vrbo.
Fitzgerald's theory is that the Airbnb IPO gave impetus to hefty valuations that Expedia could capitalize on if it spun out Vrbo. While Vrbo's pre-Covid 2019 revenue was $1.3 billion — about one-third of Airbnb's — it narrowed the gap in site traffic