Expedia Group Inc. cut its full-year outlook for bookings and revenues after weak domestic and inbound travel demand in the U.S. earlier this year.
Total bookings and revenues are expected to grow 2% to 4% in 2025, Chief Financial Officer Scott Schenkel said on a revenue call. The company expects to grow 4% to 6% in February. It also sent out first-quarter results and second-quarter outlook, which missed Wall Street estimates.
“In particular, demand in the U.S. is softer than expected, and it’s a headwind given that two-thirds of our business comes from the U.S.,” Schenkel said on the phone. He added that inbound bookings from Canada fell nearly 30%, bringing the total inbound travel to the U.S. down 7%.
Expedia’s stock fell 7.3% in expansion trading after the results and forecasts were announced.
Expedia is particularly vulnerable to economic uncertainty about U.S. travel demand and wider consumer discretionary spending. By contrast, competitors such as Booking Holdings Inc. and Airbnb Inc. generate more revenue abroad.
Booking and Airbnb’s estimates both exceeded estimates in the first quarter, but both released financial guidance that exceeded expectations for the second quarter, which also blamed the U.S. economic uncertainty in the softer travel demand in the U.S.
In the first quarter, Expedia made total bookings on its hotel, flight, car rental and vacation home booking platforms, totaling $31.5 billion, the company said in a statement.
Customers booked 107.7 million nights through Expedia’s travel website, including Expedia.com, Hotels.com and short-term rental market VRBO, which also lacked forecasts. CEO Ariane Gorin said on the phone that it was “stricken into negative territory” due to U.S. demand and foreign exchange headwinds, while the other two brands made profits.
Profitability is the highlight of the report. Adjusted earnings per share for the first quarter was 40 cents, which is the average estimate of 36 cents. Gorin cited “operational efficiency” after layoffs and the use of cross-team AI.
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