**Expedia Lowers Full-Year Forecast Amid Weaker Travel Demand**
Expedia Group Inc. has revised its full-year projections for gross bookings and revenue, citing lower-than-anticipated domestic and inbound travel demand in the U.S. at the beginning of the year. During an earnings call, Chief Financial Officer Scott Schenkel announced that gross bookings and revenue are now expected to increase by 2% to 4% in 2025, a downgrade from the previous forecast of 4% to 6% made in February. The company also reported first-quarter results and a second-quarter outlook that fell short of Wall Street expectations.
Schenkel noted that demand in the U.S. was particularly weaker than expected, which posed challenges since two-thirds of Expedia’s business originates from the U.S. He highlighted a nearly 30% drop in inbound bookings from Canada, contributing to a 7% overall decline in inbound travel to the U.S. Following the announcement of these results and forecasts, Expedia’s shares dropped by 7.3% in after-hours trading.
The company faces significant exposure to economic uncertainties surrounding U.S. travel demand and broader consumer discretionary spending. In contrast, competitors like Booking Holdings Inc. and Airbnb Inc. derive a larger portion of their revenue from international markets. While both Booking and Airbnb exceeded first-quarter estimates, they also provided weaker-than-expected guidance for the second quarter, attributing the decline in travel demand to economic uncertainties.
In the first quarter, Expedia reported gross bookings of $31.5 billion across its platforms, which include hotel, flight, car rental, and vacation home reservations. This figure fell short of the average analyst estimate of $31.8 billion. Customers booked a total of 107.7 million nights through Expedia’s travel websites, including Expedia.com, Hotels.com, and the short-term rental marketplace Vrbo, also missing projections. Hotels.com specifically experienced a downturn due to softer U.S. demand and foreign-exchange challenges, while the other two brands saw growth, according to Chief Executive Officer Ariane Gorin.
On a positive note, profitability improved, with first-quarter adjusted earnings per share reaching 40 cents, surpassing the average estimate of 36 cents. Gorin attributed this success to “operational efficiencies” achieved through job cuts and the integration of artificial intelligence across teams.
As Expedia navigates these challenges, the outlook for the travel industry remains uncertain, with potential implications for future growth and profitability.
**FAQ**
**What factors contributed to Expedia’s lowered forecast?**
Expedia’s forecast was lowered due to weaker-than-expected domestic and inbound travel demand in the U.S., particularly a significant decline in bookings from Canada, which impacted overall travel to the U.S.
