MW Expedia sees Americans flying less - and Canadians have cut way back on U.S. visits

By Tomi Kilgore

Travel-services site's stock tanks after a revenue miss and downbeat bookings outlook, amid weaker-than-expected U.S. travel demand

Shares of Expedia Group Inc. were headed sharply lower in early Friday trading after the travel-services company's disappointing earnings report and outlook for bookings, as travel demand in the U.S. continued to weaken.

It wasn't just that Americans are flying less at home. Expedia said it saw a big drop in people flying into the U.S.

Net book value for inbound flights is down about 7%, "and specific corridors like Canada are down nearly 30%," said Chief Financial Officer Scott Schenkel, according to an AlphaSense transcript of the earnings call.

While he noted that the drop in inbound travel reduced overall growth by less than 1 percentage point, "it gives you a dynamic of what we're seeing underneath the covers."

The stock (EXPE) dropped 9.8% in premarket trading, toward the worst one-day performance in a year.

The company, with brands including Vrbo, Hotels.com and Orbitz, said gross bookings for the first quarter rose 4.3% from a year ago to $31.45 billion, but that was below the average analyst estimate compiled by FactSet of $31.76 billion.

Revenue for the quarter increased 3.4% to $2.99 billion, also missing expectations of $3.01 billion, as lodging revenue rose nearly 3% but air revenue dropped 7%.

Given that after travel demand softened further in April, the company said it expects gross bookings for the current second quarter to be up 2% to 4% from last year, while the FactSet consensus at the end of April was for $30.26 billion in bookings, which implied growth of 5%.

Expedia also cut its full-year booking growth guidance range to 2% to 4% from 4% to 6%.

"It was not a pretty print by any standard," wrote Benchmark analyst Daniel Kurnos in a note to clients about the earnings report.

Because of the uncertain domestic travel outlook, Kurnos believes Expedia will use 2025 as a "review" year, with an eye toward more profitable growth in 2026.

"While management can only control what they can control, we suspect the return to focus on profitable growth is not the messaging investors want to hear, even if it is probably the right move," Kurnos wrote.

Expedia also reported a first-quarter net loss that widened 48.1% to $200 million. Excluding nonrecurring items, such as losses on investments, adjusted earnings per share rose to 40 cents from 21 cents and beat the FactSet EPS consensus of 35 cents.

Expedia's stock has shed 9.3% in 2025 through Thursday, while the S&P 500 index SPX has eased 3.7%.

-Tomi Kilgore

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May 09, 2025 09:13 ET (13:13 GMT)

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