Expedia shares sink 14% to hit 5-month low over poor Q1 show; revenue guidance trimmed on vacation rental weakness
Also Read: Expedia to cut about 1,500 jobs as travel demand moderates Vrbo was seeing a slower rebound than the company's expectations following a restructuring aimed at allowing customers to book across brands under one platform. The company, which also owns Hotels.com, projected full-year revenue growth in the mid-to-high-single digit percentage range, down from a prior forecast of double-digit growth, according to a report by Bloomberg.
The Seattle-based posted first-quarter gross bookings of $30.2 billion, missing analysts’ average estimate of $30.5 billion. The company cited a “slower than anticipated" recovery in its vacation rental business Vrbo.
That, combined with slower-than-expected growth in the rest of its consumer business, led the company to lower its full-year sales guidance with margins relatively in line versus last year, according to the report. Vrbo’s recovery has been slower than expected and has put pressure on gross bookings, Expedia Chief Executive Officer Peter Kern said on Thursday, adding in an earnings call with analysts that Vrbo has lost share to Airbnb Inc.
and Booking Holdings Inc., the parent company to brands like Kayak and Priceline. Kern also pointed to a years-long and resource-intensive back-end update that was completed around late last year, which served to unify Expedia’s two other main brands, Expedia.com and Hotels.com, onto a single technical platform.
The company has vowed to spend a record amount on marketing this year to narrow the gap in vacation rentals with Airbnb as it emerges from its costly technical update. However, the broader environment has seen headwinds as the lifting of pandemic-induced travel restrictions has led to more travelers seeking out urban adventures,
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