Expedia Group reported double-digit gains across several of its metrics for the fourth quarter in its latest earnings report, rounding out an overall successful 2024 for the company.
During the quarter, Expedia saw a 12% increase in booked hotel room nights compared to the previous year, while total gross bookings and revenue grew 13% and 10% year over year, respectively, according to the company's earnings release. Overall, Expedia saw a 7% increase in 2024 gross bookings and revenue compared to 2023.
“Fourth-quarter results exceeded our expectations with room nights, gross bookings and revenue all growing double digits,” CEO Ariane Gorin said on the company's earnings call Thursday. “This topline strength reflects our continued, strong execution along with better-than-expected travel demand.”
She credited Expedia's business-to-business segment for driving revenue growth, with a 24% increase in B2B bookings in the fourth quarter. Expedia’s advertising business posted yet another strong quarter with 25% revenue growth.
Two of Expedia's other brands — Hotels.com and short-term rental platform VRBO — also grew, Gorin said. Both platforms underwent platform upgrades, leading to some challenging quarters last year. However, thanks to international market interest, Hotels.com had slight growth. Meanwhile, VRBO saw improved traffic and conversions.
“When I stepped in as CEO last year, we set an ambition to bring VRBO and Hotels.com back to growth, while extending our strengths in Expedia, B2B and advertising, and being disciplined in our cost,” she said. “While we have more work ahead, I'm proud of how our teams deliver against this call to action and built momentum over the course of the year.”
With all four quarters last year posting an increase in bookings, Gorin said she’s looking to building upon this momentum to enhance value for Expedia customers, improving efficiencies within the business and expanding margins — all of which Expedia plans on utilizing artificial intelligence to help.
She said Expedia has “only scratched the surface” when it comes to being aware of AI and implementing AI tools, and the company is looking at the technology in three ways. The first is using AI to improve Expedia’s products — both for customers and for its partners.
Another way Expedia is looking at AI is how it’s affecting consumer behavior. Travelers are more frequently turning to generative AI to search for information on booking.
“Travelers are going to start to search in different ways, and we need to make sure that our brands are showing up in those new places where people are using GenAI native search,” she said.
The last opportunity for artificial intelligence is for potential partner opportunities with startups and tech companies in the AI space, she said.
“To me, if I think about all three of those, we see opportunities across the board, and we want to make sure that we're really on the front foot,” she said. “And of course, in all of that, I'm not even talking about how are we are using AI for our internal uses.”
Gorin credited much of Expedia’s 2024 success to its partnerships.
“The partners we’re working with are growing in line or faster than the market, and we’re able to win share with them,” she said, speaking specifically about the Asia-Pacific region.
“In terms of B2B for this year, it’s really a formula of what can we do with our existing partners as they are growing? What new inventory can we put in with them? Where can we have our inventory surface more? It's also signing new partners, and we're going to be testing some new products in market,” Gorin said.
Expedia Chief Financial Officer Scott Schenkel, who was appointed to the role in December, set realistic expectations for the first quarter of the year. The company's forecast calls for flat to slightly better year-over-year changes across some metrics. Schenkel reminded everyone on the call that the first quarter is traditionally the slowest for Expedia.
“We expect our first-quarter gross bookings growth to be in the 4% to 6% range and revenue growth to be 3% to 5%,” he said. “This reflects approximately 2 points of foreign exchange headwind at current rates and the impact from lapping leap year and in revenue the Easter shift to April.”
As of press time, Expedia's stock was trading at $199.60 per share, up 29.4% year over year. The NASDAQ Composite was up 24.9% for the same period.