“In particular, demand in the US was softer than expected, which was a headwind given two-thirds of our business comes from the US,” Schenkel said on the call. He added that a near-30% decline in inbound bookings from Canada drove a 7% decline in overall inbound travel to the US.
Shares of Expedia fell 7.7% in extended trading after the results and forecasts were announced.
Expedia is particularly exposed to the economic uncertainty around US travel demand and broader consumer discretionary spending. In comparison, rivals such as Booking Holdings Inc. and Airbnb Inc. generate more of their revenue abroad.Booking and Airbnb topped estimates for the first quarter, but both issued weaker-than-expected second-quarter financial guidance, also blaming economic uncertainties for softer travel demand in the US.
In the first quarter, Expedia’s gross bookings across its platforms for hotel, flight, car rental and vacation home reservations totaled $31.5 billion, the firm said in a statement, missing the average analyst estimate of $31.8 billion.
Customers booked a total of 107.7 million nights through Expedia’s travel websites, which include Expedia.com, Hotels.com and the short-term rental marketplace Vrbo, also missing projections. Hotels.com in particular “slipped back into negative territory” due to the softer US demand and foreign-exchange headwinds, while the other two brands saw gains, Chief Executive Officer Ariane Gorin said on the call.
Profitability was a bright spot in the report. First-quarter adjusted earnings per share were 40 cents, topping the average estimate of 36 cents. Gorin cited “operational efficiencies” after job cuts and usage of artificial intelligence across teams.
