Expedia Falls Amid Renewed Concern About Spread of Virus
(Bloomberg) -- Expedia Group Inc. fell in extended trading after executives suggested a “bumpy” future ahead, a sign that rising Covid-19 cases caused by the delta variant have damped confidence in the travel industry.
While the company saw “continued improvement in many global travel segments,” Chief Executive Officer Peter Kern offered a cautionary note for the near future.
“Unfortunately, the road to full travel recovery remains bumpy until more of the world is vaccinated.” Kern said in a statement Thursday with the company’s quarterly results. Shares declined about 6% after closing at $161.69 in New York. The stock has gained 22% this year.
Expedia said second-quarter sales more than tripled to $2.11 billion and gross bookings increased to $20.8 billion. Both topped analysts’ estimates. The company reported an adjusted loss of $169 million, or $1.13 a share, in the period ended June 30, from $577 million, or $4.09 a share, a year earlier. Analysts, on average, estimated a loss of 65 cents a share.
The spread of the delta variant reduced travel in July compared with June, spurred a rise in cancellation rates and “there remains a bunch of unknowns across the globe,” Kern said in a conference call after the results were released.
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. 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.
Kern said he was confident the industry would rebound because “there is so much pent up demand,” but it’s difficult to assess how much would occur in the current quarter.
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. Kern said a “real difference is coming in the Vrbo side of the business.” While the company doesn’t disclose Vrbo metrics, the CEO said it “benefited from strong vacation rental performance” in the quarter.
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