Expedia Focuses on Loyalty Programs as It Expects Soft Travel Demand in Q3

For Expedia Group CEO Ariane Gorin, there was a clear highlight for the company during the second quarter: Brand Expedia saw room night growth rise to nearly 20%.

“Brand Expedia has been a great highlight for us,” Gorin told analysts and investors during the company’s second-quarter earnings call on Thursday (Aug. 8). “It gives me confidence because it was the least disrupted of all of our brands. We’ve built up the brand value there. The value prop on Brand Expedia is really strong for travelers. We feel good about it. We’d like to see more growth with it internationally.”

While the company’s second-quarter metrics were generally positive, Gorin noted a recent softness in demand.

“In July, we have seen a more challenging macro environment and a softening in travel demand,” she said. “We are therefore adjusting our expectations for the rest of the year.”

Gross bookings for Expedia Group increased 6%, to $28.8 billion, during the second quarter. Lodging and hotel bookings rose 8% to $20.7 billion. Revenue grew 6% to $3.6 billion (including a 22% rise in B2B revenue). Room night growth increased 10%.

Expedia continues to enhance its consumer brands, including Expedia, Hotels.com and Vrbo, through its loyalty program, One Key, which is available in the U.S. and is set to launch in the U.K.

“Our second-quarter results came in at the high end of our expectations, with gross bookings and revenue growing 6%,” Gorin said. “We’re pleased with our momentum and the sequential improvement in our consumer brands.”

That softness in travel demand is expected to continue in the third quarter, Gorin noted.

“We’re focused on executing what’s in our control,” she said, “and that is the traffic growth of our three brands. And our loyalty members worldwide continue to benefit from our improved member discounts we launched last summer. We’re encouraged by our second-quarter results.”

Recent replatforming efforts involved in the recovery of the B2C segment, particularly Vrbo, revealed key insights for company officials.

“It’s unlocked a lot of capabilities for us,” Gorin said. “We have a new testing platform, and our testing velocity has really gone up, and our view of the customer is across all of our brands. What we’re digging into is where are there configurations or brand specific features we need to build on top.”

Gorin said she looks forward to enhancing the company’s advertising efforts for Expedia, Hotels.com and Vrbo, its three flagship consumer brands.

“We’re excited about our opportunities to grow advertising,” she said. “Shopping and booking moments during the booking process is where our advertising happens most. The opportunity is there to expand with partners who use our advertising tools. We’re also about to introduce some video into our ads. There’s a lot of opportunity there.”

Consumers have many options for making travel arrangements, whether that involves personal or business trips, or the use of loyalty points, Gorin noted.

“We see the opportunity to power the technology and inventory in any of those areas,” she said. “It forces our own B2C brands to be more competitive and up our game. We know the environment is becoming more volatile, but there is a lot of opportunity ahead.”