Skift Take

After shutting down or selling eight businesses — some of which were relatively inconsequential — since the beginning of 2020, Expedia Group doesn't expect any more such asset dispositions as part of its drive to make the company simpler and more focused. But selling brands may turn out to be the easiest part of the exercise.

There are so many asterisks in online travel competition these days because of Covid dynamics, and Expedia Group CEO Peter Kern realizes that only when international travel recovers will the winners and losers sort themselves out.

During Expedia Group’s second quarter earnings call with financial analysts Thursday, officials described picking up market share in short-term rentals, for example, in core markets such as North America.

“And if you look at a market like EMEA (Europe, Middle East and Africa), which came back strong over the summer and came back principally in domestic that obviously favors some of the other players,” Kern said, presumably referring to Booking Holdings, among others. “And our business in places like EMEA and APAC (Asia-Pacific), as I mentioned, are more international focused.”

He said “more than anything” market share changes these days are a function of domestic or international strength. For example, Expedia Group has done well during the Covid era in Australia and New Zealand, where it has strong domestic brands, including Wotif and Stayz.

But Asia-Pacific has lagged, especially compared with Expedia’s strength in its core North America markets, because its Asia-Pacific businesses are largely dependent on international travel, which is “not zero,” Kern said, but extremely diminished.

Frustration About Varying Covid Policies

Kern expressed optimism about the Biden administration’s announcement that it may require vaccinations for international visits to the U.S. as a way to revive international travel. But he added that countries’ widely varying Covid-travel policies are “frustrating and confusing and complicated.”

“But we’re clearly not done seeing pockets of issues with COVID and reactions from local or national governments to that issue,” Kern said. “So I think that’s why I say there’s a variety of unknowns out there, and we’re just playing it out and trying not to end up upside down over-marketing to a market that ends up with a problem.”

During the second quarter, Expedia Group’s revenue jumped 273 percent to $2.1 billion while its net loss fell 60 percent to $301 million.

No More Brand Selloffs

Chief Financial Officer Eric Hart noted that Expedia Group since the beginning of 2020 has shuttered or sold eight businesses. Some of them, including Alice and SilverRail, have no impact on Expedia’s financials.

Kern said there won’t be any more such asset dispositions, and the company is now focused on having its plethora of brands work better together and not so much as competitors, as was the tendency in the past.

One of those brand sales was Expedia’s sale of its business travel unit, Egencia, to American Express Global Business Travel. Hart said Expedia this week formally accepted the offer, which was announced in May. The deal, which is expected to close in 2021, gives Expedia Group a 14 percent stake in American Express Global Business Travel valued at $750 million.

Permanent Changes in Traveler Buying Patterns?

Like the seesawing market share gains and losses during the pandemic, it’s tough to tell which consumer behaviors will be enduring.

Expedia officials said they’ve seen a traveler preference for the pay-at-the-hotel business model versus the pre-pay model because travelers want flexibility during the Covid era.

Kern said Expedia’s aim is to give consumer’s a choice of which way to purchase travel, and not to drive them toward one model or the other.

“There has been a relative bias during Covid for pay later, as you say, perhaps just a greater sense of security around the idea,” Kern said. “But there’s nothing that I think suggests that that’s necessarily a permanent thing.”

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Tags: asset sales, coronavirus, covid, earnings, egencia, expedia group, international travel, m&a, mergers and acquisitions, peter kern, vaccines

Photo Credit: Pictured is the Big Ben in London, UK. Many of Expedia Group's businesses are oriented toward international travelers. Misa Nishimura / Getty