Expedia Is Open to AI Partnerships and M&A

What's Expedia Group's stance on partnership with AI answer engines?

CEO Ariane Gorin told analysts Thursday that in addition to further personalizing the customer experience on Expedia websites through AI features, the company is open to AI partnerships for its B2B business.

"Going forward, we'll continue to test and release AI-generated features to further personalize our traveler experience," Gorin said during the company's fourth quarter and full-year earnings call. "AI also opens new possibilities to drive traffic to our brands as consumers increasingly search in new GenAI-native experiences, and we're ensuring that we meet them where they are. And for our B2B business, the AI-native travel startups that will inevitably emerge present new partnership opportunities for us."

Several travel brands, including Booking.com, Priceline, OpenTable, Tripadvisor, Hipcamp and Uber recently partnered with OpenAI. Expedia brands weren't in the mix, and that issue didn't come up during the call.

As with online travel companies stance on working with Google Hotels or Google Vacation Rentals, some may forego partnering with the likes of OpenAi, Google's Gemini, or other emerging answer engines. So it wasn't a slam dunk that Expedia would be looking to do so.

Expedia Continues to Look at M&A

Expedia three main consumer brands, Expedia, Hotels.com and Vrbo, all experienced growth in 2024, as did its B2B and advertising businesses.

Gorin acknowledged that the company still has work to do to accelerate its Hotels.com and Vrbo vacation rental businesses.

Still, the company intends to look opportunistically at M&A.

Scott Schenkel, appearing in his first earnings call as Expedia Group's chief financial officer said: "Look, I'm coming in new here. But I think any time a company is at our scale and our technology base, we should be in the market and looking at M&A. And I think they've been and will continue to be."

Gorin said the company has a team focused on deals.

"Right now, we continue to be focused on running the brands that we have, growing the B2B business, the advertising business and continuing to have strong returns," Gorin said.

Expedia Hasn't Decided on Expanding Its Loyalty Program

When Expedia Group launched its One Key loyalty program in 2023 under previous CEO Peter Kern, the plan was to roll out the program internationally. One year later, however, Gorin paused One Key's expansion beyond the U.S. and UK.

She said yesterday that the company's teams are evaluating the impact of the loyalty program and next steps.

The teams know that One Key has been positive for Expedia and it's been a drag on bookings for Hotels.com," Gorin said.

Hotels.com had a simple loyalty program that was arguably more attractive for its customers than is One Key.

Gorin said the company is also assessing the impact of enabling guests to earn One Key cash on virtually all of Vrbo bookings.

"So we're going to take all of those learnings and then look by brand and geography what we need to do in loyalty, and we'll share more in the year to come," Gorin said.

Positive Results for Consumer Brands and B2B Segment

All three of Expedia Group's core consumer brands saw bookings growth in the fourth quarter, and as a whole gross bookings climbed 5 points to 9%.

Gorin said the company's B2B business had a "stellar" fourth quarter, with gross bookings up 24% year over year.

Expedia Group's advertising revenue jumped 24% for full-year 2024.

Net income in the fourth quarter increased 124% to $299 million. Revenue jumped 10% to nearly $3.2 billion.

Expedia Group's share price was up nearly 9% to $172 in after-hours trading Thursday evening.