Expedia Group Inc. reported second-quarter revenue that missed analysts’ estimates, signaling a potential slowdown in travel demand as the busy summer season gets into full swing. The shares tumbled 11% in premarket trading.
(Bloomberg) — Expedia Group Inc. reported second-quarter revenue that missed analysts’ estimates, signaling a potential slowdown in travel demand as the busy summer season gets into full swing. The shares tumbled 11% in premarket trading.
Revenue increased 6% to $3.36 billion, slightly below analysts’ average estimate of $3.37 billion. Gross bookings across Expedia’s platforms, which include flight reservations, hotel stays, car rentals, activities and vacation rentals, grew 5% to $27.3 billion, according to a statement Thursday. That was less than analysts’ projections for $28.9 billion.
Expedia is the first among the big online travel companies to offer insight into the state of travel at the height of the busiest period of the year. International travel has surged this year, as Americans take advantage of a stronger dollar, while domestic trips in the US have generally slowed.
Delta Air Lines Inc. and United Airlines Holdings Inc. recently raised their annual profit forecasts on continued strength in international bookings and a record number of passengers are expected industrywide this summer. But after facing the highest inflation rates in decades, consumers have been reducing various discretionary purchases and recently appear to have added flying to the list.
Bookings Holdings Inc., Expedia’s search rival that has a bigger international exposure, and Airbnb Inc., which competes with Expedia’s Vrbo short-term vacation rental platform, are due to report results Thursday after markets close.
Seattle-based Expedia rolled out a long-awaited loyalty program last month, allowing travelers to use and earn rewards across the platform, for example, by building up points on vacation-rental platform Vrbo and spending them to book a flight on Expedia.com or a room on Hotels.com. The technological streamlining behind the scenes could cause Expedia to temporarily lose some marketshare to Airbnb, though Chief Executive Officer Peter Kern has said the platform would help drive efficiencies later this year.
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