Wednesday, August 17, 2022

Expedia Groups posts highest ever Q2 revenue and profits

Expedia Group’s second quarter financial report includes several records for the global travel company – with the highest ever revenue and adjusted EBITDA for Q2, as well as the highest lodging bookings in the company’s history. Revenue in the quarter was $3.2 billion, up 51 per cent year-over-year and up 1 per cent compared to Q2 2019.

Adjusted EBITDA came in at $648 million, up 14 per cent versus the second quarter of 2019, and lodging gross bookings were up 8 per cent compared to the second quarter of 2019.

“Despite the disruptions during the summer travel season and an uncertain macroeconomic backdrop, travel demand has remained strong,” says Peter Kern, vice chairman and CEO of Expedia Group.

“We continue to focus our energy on improving our technology for our travelers and partners and attracting more valuable customers through direct relationships. These actions, along with prior actions to drive efficiency, put us in a better position to withstand any further macroeconomic headwinds should they arise.”

Expedia Group’s gross bookings in the second quarter came in at $26.1 billion, up 26 per cent year-over-year.

Lodging accounted for 75 per cent of total revenue, bringing in $2.4 billion, up 57 per cent year-over-year. The remaining revenue came from advertising and media (7 per cent), air (3 per cent) and other revenue (15 per cent).

Selling and marketing expense in the second quarter increased 46 per cent compared to Q2 2021, which the company says was primarily due to an increase in “spend across all main marketing channels as well as an increase in B2B partner commissions.

Over the last 18 months for Expedia.com and Hotels.com, loyalty members accounted for about three times as many gross bookings per customer and over twice the gross profit and twice the repeat business per customer compared to non-loyalty members.

Regarding the mobile app, Kern says travelers using the app drove more than two and half times the gross bookings and gross profit per customer versus non-app users.

“And when we combine the two – loyalty members who also book through the app – you get the highest production of any customers,” he says.

“Given these core drivers our entire company is focused on getting the right customers in the funnel and then turning them in to loyalty members and app users.”

Loyalty members is up 33 per cent compared to the second quarter of 2019 and new app downloads grew 58 per cent in Q2 this year compared to the same period in 2019.

Kern says the continue development of a single tech platform, combined with ongoing improvements to its mobile app experience, will pay off in the long term.

“We know that at any given moment a large portion of the traveling public is up for grabs, searching around the best travel options,” he says.

“The industry literally serves billions of searches and customers every year and rarely has engendered true loyalty. Traffic has never been an issue in travel, it’s always been an issue of retention. We need to once and for all change that dynamic by providing a product and services worthy of customer loyalty. And ultimately we intend to spend much less of our time and money chasing them over and over again in the wild.”

In May, Expedia Group unveiled a new strategy, including a new technology platform called Expedia Group Open World and a system that rewards hotels for providing a better guest experience.

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