Expedia Reports Loss Amid Concern About Spread of Virus

A traveler wearing a protective mask and face shield walks into Terminal 2 at Los Angeles International Airport (LAX) in Los Angeles, California, U.S., on Thursday, Aug. 13, 2020. Airline passenger numbers in the U.S. totaled 559,420 on Aug. 11, compared with 2.31 million the same weekday a year earlier, according to the Transportation Security Administration. Photographer: Bing Guan/Bloomberg , Bloomberg

Monica Greig, Bloomberg News

Aug 5, 2021

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(Bloomberg) -- Expedia Group Inc. reported a bigger loss than anticipated and suggested a “bumpy” future ahead, a sign that rising Covid-19 cases caused by the delta variant have damped confidence in the travel industry. Shares declined as much as 8% in extended trading.

The second-quarter adjusted loss was $169 million, or $1.13 a share, from $577 million, or $4.09 a share, a year earlier, the Seattle-based online travel agent said Thursday in a statement. Analysts, on average, estimated a loss of 65 cents a share.

Sales more than tripled to $2.11 billion and gross bookings increased to $20.8 billion. Both topped analysts’ estimates.

While Expedia saw “continued improvement in many global travel segments,” Chief Executive Officer Peter Kern offered a cautionary note for the future.

“Recent Covid variant news around the world continues to create uncertainty in the travel industry,” Kern said in the statement. “Unfortunately, the road to full travel recovery remains bumpy until more of the world is vaccinated.”

Expedia has a hand in many sectors of the travel industry that continue to be hit by the uncertainty of the ongoing pandemic, including flights, hotel bookings and car rentals. While U.S. domestic travel has largely re-emerged, international travel remains stifled and the surging delta variant has raised further doubts about the near future. In contrast to Kern’s warning, Booking Holdings Inc., the largest online travel agency, said Wednesday that the pace of travel in Europe showed the largest increase in the second quarter and the trend was expected to continue during the current period.

Expedia’s rival to Airbnb Inc., Vrbo, helped the company weather the pandemic as travelers, particularly in the U.S., sought regional vacations and remote work getaways. While the company doesn’t disclose Vrbo metrics, Kern said Expedia “benefited from strong vacation rental performance” in the quarter.

Shares declined to a low of $148.33 in extended trading after closing at $161.69 in New York. The stock has gained 22% this year.

(Updates with comments from CEO on vacation rentals in the seventh paragraph.)

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