Expedia Surges on Strong Holiday Bookings, Positive Demand Outlook
Expedia Group Inc. (EXPE) witnessed a significant surge in share value, marking its most substantial gain in over a year. This upswing follows the company's announcement of better-than-anticipated gross bookings in the final quarter of 2024, indicative of robust travel demand during the holiday season.
Across its platforms, Expedia reported $24.4 billion in gross bookings for hotel, flight, car rental, and vacation home reservations. This figure surpassed the average analyst estimate of $23.3 billion. Additionally, Expedia's travel websites, including Expedia.com, Hotels.com, and Vrbo, recorded 86.4 million booked nights, exceeding analysts' expectations.
These positive results are promising for the broader travel industry in the United States, as Expedia generates approximately two-thirds of its revenue domestically, serving as a reliable indicator of travel demand and consumer spending.
Expedia has also declared a quarterly dividend of 40 cents per share, commencing in March 2025. "The reinstatement of our dividend reflects our optimism regarding our long-term prospects and dedication to shareholder returns," stated Ariane Gorin, Expedia's Chief Executive Officer.
In premarket trading on Friday, Expedia's stock experienced a significant rise. If sustained, this gain would mark the company's largest intraday increase since November 3, 2023.
These results come after encouraging reports from US carriers Delta Air Lines Inc. and United Airlines Holdings Inc., both of which noted robust demand for overseas travel during the winter months. However, Expedia cautioned that currency fluctuations could impact bookings in the current quarter.
Expedia anticipates gross booking growth of 4% to 6%, according to Scott Schenkel, the incoming Chief Financial Officer, who shared this information during an earnings call with analysts. This projection fell short of the average estimate of 6.8%. The midpoint of Expedia's 2025 gross booking growth guidance, also within the 4% to 6% range, was slightly below Bloomberg's estimates.
According to Gorin, while a stronger US dollar has influenced guidance, it also implies that Americans traveling overseas will encounter more attractive deals. "Our teams are constantly monitoring for opportunities that provide travelers with value," she added.
Expedia's online travel counterparts, Airbnb Inc. and Booking Holdings Inc., which generate the bulk of their revenue from international markets, are scheduled to release their financial results on February 13 and February 20, respectively.