Expedia Sees 15% Gain in Active Loyalty Members but Booking Growth Slows


Expedia’s second-quarter results showed gains in loyalty membership, a surge in B2B contributions as travel is becoming more affordable amid a pullback in pricing.

But it was a slowdown in bookings growth that sent investors to the exits on Thursday (Aug. 3), as shares plummeted 15% in intraday trading.

Total gross bookings were up 5% to $27.3 billion, but represented a slowdown from growth rates logged in previous periods when, for example, first quarter bookings surged 20% over the same period in 2022.

Revenue was up 6% to $3.4 billion.

CEO Peter Kern said on the call that “industry trends have remained broadly consistent with the first quarter.” Travel activity in North America and Europe have remained stable, he said, with “stronger growth” in APAC and in Latin America.

“Travelers worldwide continue to favor shorter stays in urban locations versus longer trips and sun and ski destinations,” said Kern. And he noted that some of the expenses tied to travel — airfares, rental car rates among them — are seeing some declines, which is making travel more affordable.

Loyalty Programs Gain Adherents

In the meantime, said the CEO, Expedia is focused on acquiring loyalty members and app users, and management said active loyalty members were up 15% year on year in the core brands (the tally was not disclosed on the call or in the earnings presentation) — with the Expedia brand in the U.S. seeing a boost in customer count since 2019 by 135%.

And as has been reported, the company last month announced a  single loyalty program called One Key unifies the travel brands Expedia, Hotels.com and VRBO into one rewards program, with a combined 168 million members.

Kern also pointed to AI as a key technological underpinning to help improve trip discovery and booking.

Elsewhere, the company’s B2B business saw revenues grow by 32% year on year to $861 million.

CFO Jule Whalen said on the call that bookings growth was driven by lodging gross bookings, which were up 7%, in turn buoyed by the hotel business (and B2B). These growth metrics were offset a bit by rates decline in car rental and insurance contributions, as rates decrease amid higher available supply.

During the question and answer session with analysts, CEO Kern noted that “what we’re seeing is what I’d call a relative normalization of seasonal trends and booking trends,” and the most recent quarter lapped last year’s “huge” growth rates logged as economies reopened. Looking ahead, he said there will be potential in getting VRBO customers enmeshed in the new loyalty programs “and involved in our whole universe of products” while Expedia and hotels.com members can, in turn, use their points on VRBO.