Expedia Group Inc. (EXPE.O) reported first-quarter revenue that missed analysts’ estimates, with growth in its Vrbo short-term rental business slowing for the second straight quarter. The shares fell more than 3 per cent in extended trading.
Sales came in at US$2.61 billion, up from US$2.51 billion a year earlier, the company said in a statement. Wall Street was looking for US$2.69 billion, according to data compiled by Bloomberg. Revenue from Vrbo grew 14 per cent. Last quarter, growth had slowed to 20 per cent, which was the lowest rate for 2018.
Bellevue, Washington-based Expedia has been struggling to chase rivals Airbnb Inc. and Booking Holdings Inc. in the fast-growing and lucrative market for short-term rentals with its HomeAway and Vrbo services. The company has been investing to increase the profile of these two businesses, but Expedia still lags behind the roughly 6 million global listings in alternative accommodation that Airbnb and Booking each have.
Expedia said on Thursday that Vrbo gross bookings totaled US$4.16 billion, up 5 per cent from a year earlier. That was roughly half the growth rate of the main online travel agency business.
The company has been investing to increase the profile of HomeAway and Vrbo, but Expedia still lags behind the roughly 6 million global listings in alternative accommodation that Airbnb and Booking each have.
Expedia shares have gained 14 per cent this year, compared with a 16 per cent increase in the S&P 500 Index. The stock closed at US$128.23 in New York Thursday.
The company reported a first quarter loss of 27 cents a share, excluding some items. That compared with an adjusted loss of 46 cents a share in the same period a year earlier. Online travel agents sometimes lose money in the first-quarter because fewer people go on vacation at the start of the year.
In an attempt to catch up with rivals, Expedia is shaking up its short-term rental unit, starting by changing the name of the division from HomeAway to Vrbo, which has more name recognition in the U.S. Over the next year, Expedia will plow more resources into Vrbo, launching new websites in fresh markets and re-branding existing sites, the company said Thursday.
“Vrbo changed the way people in the U.S. travel and has a large, loyal community,” Chief Executive Officer Mark Okerstrom said in a statement. “Through a phased roll-out, we will gather the data we need to determine how to best introduce Vrbo to the world.”
Last month, Expedia released a new Vrbo logo and pronunciation. The company now wants people to say “VER-bo,” instead of the letter-pronounced acronym for Vacation Rentals by Owner. Vrbo was founded in 1995 and bought by HomeAway in 2006. Both were then acquired by Expedia.
Expedia recently agreed to acquire Liberty Expedia Holdings Inc. in a US$2.6 billion all-stock deal that simplifies the travel company’s ownership structure.
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