It's show time for Expedia Group. After three years of getting its house in order completed, now it has to perform.
Expedia Group has been consumed with, and weighed down by, launching a new loyalty program and transitioning its three core brands — Expedia, Hotels.com and Vrbo — to a common tech platform. But now those tasks are behind it.
“Instead of spending most of the year doing surgery on our own business, we will be focused on growth, innovation and efficiency,” CEO Peter Kern said during Expedia’s third-quarter earnings call Thursday.
Kern said he expects Vrbo to increase its market share in vacation rentals because of the loyalty program, which for the first time enables Expedia customers to earn and burn Expedia cash on vacation rental bookings, and the tech migration.
For example, he said, Expedia.com offers stays in multi-unit apartment buildings that weren’t available on Vrbo, but the tech migration will enable Vrbo customers to book those, as well.
The Maui wildfires adversely impacted Vrbo’s results, as did the tech migration, but Expedia Group’s consumer business saw revenue increase 400 basis points sequentially in the third quarter based on the company’s strength in hotels, said Chief Financial Officer Julie Whalen.
Expedia’s business-to-business segment, which powers travel for airlines, banks and retail businesses, is already the largest in the online travel industry. That segment saw revenue increase 26% in the third quarter to $995 million. It signed on Walmart as a partner during the quarter.
Whalen said the company is confident enough “to reiterate our full year guidance of double-digit top line growth with margin expansion.”
Expedia’s Strong Numbers
Expedia Group posted strong third-quarter results in both its business-to-business and business-to consumer segments as it announced record revenue and profitability on an adjusted basis.
The company reported $425 million in third-quarter net income, which was a 12% decline from a year earlier. However, the company notched adjusted net income of $778 million, which it said was its highest for any quarter.
Revenue rose 9% to $3.9 billion, also a quarterly record.
Expedia’s Room Nights Lagged
Room nights grew an unimpressive 9% to 89.3 million, although Kern said the Vrbo tech migration, as well as the tragedy in Maui, dampened Vrbo’s performance. In contrast, Airbnb’s nights and experiences booked climbed 14% in the third quarter, and Booking Holdings’ jumped 15%.
“With the last of our major migrations behind us, we are now well positioned to further accelerate our business and drive stronger shareholder returns,” Kern said in a statement. “To that end, we have completed a record $1.8 billion in share repurchases year-to-date and have a new $5 billion share repurchase authorization from our board.”
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Photo credit: Expedia Group CEO Peter Kern at Skift Global Forum on September 21, 2022 in Manhattan. Skift