26 Jul 2019
Posted in Consumer
Expedia’s results beat expectations due to strong core performance and expansion strategy
Following the release of Expedia’s Q2 2019 results, Ralph Hollister, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers his view on the announcement:
“Expedia’s Q2 results have exceeded analyst expectations, as its revenues have risen by 9% to $3.5bn. This was greatly supported by the company’s core travel agency business, which yielded the largest increase in gross bookings with a rise of 11%.
“The success of this core business illustrates to other companies in the travel sector that although quick expansion is key to increase market share, assuring continuing quality of the core business that initiated the success must not be abandoned.
“Calculated expansion also contributed to Expedia’s impressive results. While gross bookings on vacation home rental platform Vrbo only grew 2% in the period, it saw revenues swell 17% to $347m. The Vrbo segment includes HomeAway, the Airbnb competitor that Expedia acquired in 2015 for $3.9bn.
“Home rentals are currently one of the most profitable parts of the online travel-booking industry. Both Expedia and Airbnb are behemoths in the travel industry and have managed to achieve success without being in serious competition with one another. This may change as Expedia sees Airbnb’s growth threatened by harsh regulations that cap its short-term rentals, along with a souring public image as it is blamed for inflating rental prices.
“Expedia’s focus on employee wellbeing will help to attract the highest standard of workers to the company, which will enhance user experience and product choice, as well as ensure long-term success for the booking agency. For example, the company is preparing to move into a brand-new 40-acre campus in Seattle that will feature a ‘biophilic design’, a concept that involves connecting people and nature to increase physical and mental well-being.”