Expedia (EXPE) 7 Nov 24 2024 Q3 Earnings call transcript

In a recent earnings call, Expedia Group reported strong financial results for the third quarter of 2024. The company's focus on driving growth and improving operational efficiency was evident in their performance, which exceeded expectations in gross bookings and earnings despite challenges from weather and currency headwinds.

Strong Execution and Capitalizing on Growth Opportunities

Expedia Group's CEO, Ariane Gorin, highlighted the company's strong execution across its business segments. The company's consumer business, which includes Brand Expedia and Vrbo, saw accelerated gross bookings for the second straight quarter. This growth was driven by the continued strength of Brand Expedia, the return to growth for Vrbo, and successful international expansion. The advertising and B2B businesses also outpaced industry growth, demonstrating Expedia's ability to capitalize on opportunities and rebuild momentum after tech replatforming.

Consumer Business Highlights

The consumer business segment, led by Brand Expedia and Vrbo, showcased significant improvements. Brand Expedia continued its strong performance, with room nights at mid-teens year-on-year. The company's focus on driving more direct traffic, improving product performance, and expanding internationally has resulted in a 3% year-on-year increase in gross bookings. The company's package product, which allows travelers to dynamically bundle flights, hotels, and cars with attractive savings, is a differentiator for Brand Expedia. This product, along with targeted promotional activity, contributed to a 25% increase in package bookings in the third quarter.

Vrbo's Turnaround and International Expansion

Vrbo, Expedia's vacation rental platform, delivered its first full quarter of bookings growth this year. Despite the negative impact of Hurricane Helene, Vrbo showed resilience with traffic and conversions both growing. The company's focus on product and supply improvements has accelerated app traffic growth and attracted a wider audience. Expedia's international expansion efforts have also shown promising results, with bookings growth for consumer brands outside the U.S. accelerating by 5 points in the third quarter.

B2B Growth and Strategic Partnerships

Expedia's B2B business also showed strong growth, with bookings up 19% year-on-year. The company's strategic partnerships, including renewals with Despegar and Traveloka, and a new partnership with Canadian Bank, CIBC, underscore Expedia's leadership in the B2B space. Additionally, the recent partnership with Microsoft Bing is expected to further enhance Expedia's capabilities and offerings.

Tech Platform and AI Capabilities

Expedia's investment in technology and AI capabilities has contributed to improved conversion and customer service. The company's use of generative AI to summarize reviews and provide detailed property and neighborhood information has made it easier for travelers to shop, while also reducing development time and resources. In customer service, Expedia's virtual agents allow travelers to self-serve, improving the traveler experience and lowering costs.

Looking Ahead

Expedia's focus on the fundamentals and strategic investments in technology and international expansion position the company well for future growth. The company's ability to capitalize on opportunities and navigate challenges, such as weather and currency headwinds, demonstrates its resilience and adaptability. As Expedia continues to execute its strategy and leverage its tech platform and AI capabilities, it is poised for continued success in the competitive travel industry.