“Our outlook reflects the successful performance we experienced in the third quarter, coupled with the momentum we are observing in October,” Chief Executive Officer Ariane Gorin remarked in an interview. Expedia shares surged by as much as 18% in after-hours trading and have risen 18% year-to-date through Thursday’s close.
This report aligns with a positive announcement last week from travel competitor Booking Holdings Inc., which provided a more favorable outlook for the year. Airbnb Inc. also exceeded expectations for its holiday quarter forecast in its Thursday update, citing heightened demand in October. Expedia has not yet felt the effects of the US government shutdown, which began just over a month ago.
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“In the US, I want to clarifiy that we haven’t noticed any shift in trend yet, but we are closely monitoring the situation. This weekend will be significant as we approach that,” Chief Financial Officer Scott Schenkel commented during the earnings call.
Expedia, which also owns Hotels.com and Vrbo, significantly surpassed expectations for the third quarter. The adjusted earnings per share for the three months ending September 30 reached $7.57, higher than the projected $6.94 from Wall Street.
Gross bookings for this period increased by 12%, totaling $30.7 billion, which is above the average analyst forecast of $29.2 billion. This growth was largely driven by Expedia’s business-to-business sales, as noted in the statement. This segment has represented one-third of revenue over the past year, with plans for expansion through new partnerships and strengthened existing relationships.
The metric of rooms booked also exceeded predictions, reaching a total of 108.2 million, compared to Wall Street’s expectation of 103.9 million. Demand for travel has risen in both high-end and budget markets, showing that both affluent travelers and those on tighter budgets are still interested in discretionary travel.
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On another note, the travel industry has received mixed feedback: cruise lines like Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. reported shortfalls on a crucial metric related to revenue per available passenger during cruise days.
Moreover, some indications suggest that hotel chains are experiencing challenges. Hyatt Hotels Corp. reported the slowest growth rate in revenue per available room in over a year, with executives attributing a dip in booking volumes this quarter to a decline in travel to four-star and lower hotels.
(Edited by : Jerome Anthony)
