Expedia Group Holdings’ stock jumped 17.3% thanks to its latest earnings report based on a strong 2024 holiday season.
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Expedia Posts Strong Earnings Growth
Expedia had a better-than-expected close to 2024 with holiday sales figures, outperforming expectations significantly. Bookings were up 9% from the prior year for the fourth quarter but it was the Online Travel Agency (OTA’s) business-to-business performance that drove numbers considerably higher.
“Bookings for the consumer business accelerated for the third consecutive quarter to 9%, up 5 points sequentially.
Each of our core brands, Brand Expedia, Hotels.com, and Vrbo saw booking’s growth. Our B2B business had a stellar quarter, with booking’s growth increasing 5 points sequentially to 24%, and our advertising business posted yet another strong quarter with 25% revenue growth.” – Yahoo! Finance
What might be most telling about this sector growth is that while price increases did not hamper customer spending, businesses were spending more to reach those customers and market their hotels, homes, and travel products.
The stock closed up more than 17% on the earnings report.
How Does The 2025 Q1 Market Look?
For US airlines, the first quarter of 2025 is a mixed bag. Delta is bullish, expecting between 7-9% revenue growth on premium travel demand. However, even those that forecast revenue growth, like Southwest who is looking at 5-7% during the first quarter, expects costs to outpace growth. The same is true for JetBlue which is contracting as well. Frontier executives believe it will break even or grow slightly in Q1, however analysts have the carrier losing money in the quarter. American Airlines expects to lose money in the first quarter but make up for it during the full year of 2025.
Hotels are a little less optimistic with expected 1.6% Revpar growth in the first quarter but a little over 3.5% for the luxury segment.
The three major cruise lines (which own a collective of the dozen largest brands) Norwegian, Royal Caribbean, and Carnival Corp. had a more subdued optimism with just Carnival looking to breakeven for the first quarter, the other two expecting slight growth.
The consensus seems to be that the extended success the travel segment as enjoyed will continue but is slowing after a very strong end to the year. Still, it appears that Delta and Expedia are the best of the bunch with high expectations for continued success.
Conclusion
The travel sector has seen a substantial shift given the drop in business travel since the pandemic, but is still very strong if Expedia’s earnings are an indicator. While the sector might be slowing some, Expedia’s growth in the business-to-business segment suggests that while prices remain high competition is increasing. If there’s a slowing of the market it’s possible that some of this competition will change to focusing on price rather than promotion.
What do you think?
“Customers spending” equals “Customers gullible” .
“Extra add-on fees” equals “Slick cons” .
Just curious man… do you even travel? You seem to complain about costs for everything travel-related
I distrust “extra add-on fees” .