While the omicron variant was another disruption of the travel industry’s recovery, the overall effect it had was less severe than seen with past COVID-19 case surges, Expedia Group Vice Chairman and CEO Peter Kern said.

During his company’s fourth quarter earnings call, Kern said in a way, the disruption caused by the variant was encouraging, because many of the issues it caused were those of inconveniences. There were border shutdowns, and flights were canceled because flight crews got sick, but there was less consumer fear over traveling, he said.

“What we believe will come from this, presuming the next waves continue in ever lightening way, is that the world has essentially gotten accustomed to the pandemic,” he said. “It will enter perhaps an endemic stage, and governments and [the] industry, et cetera, will adapt much more easily as the next waves come, and in turn, this will continue to disrupt travel less and less.”

Consumers have remained willing to travel throughout the pandemic, Kern said. As more flight crews return to work and border issues are relieved, Expedia is seeing a solid return to travel.

“We are pleased to see that bookings have strongly rebounded since opening anywhere that omicron has tapped out, and certainly we're seeing that broadly across our biggest markets,” he said.

There was a notable omicron-caused pullback in December that lasted into January, but numbers have improved in recent weeks, Chief Financial Officer Eric Hart said. Total gross bookings for all product net cancels were down 25% in the fourth quarter compared to the fourth quarter of 2019.

Given the volatility of the recovery caused by omicron, the company’s monthly lodging bookings net of cancels include hotels and its vacation rental platform, Vrbo, he said. Compared to 2019 figures, October bookings were down 4%, November’s was down 5% and December was down 27%. While January was down 11%, trends improved throughout the month with recent weeks trending above 2019 levels.

Geographically, bookings have improved most in the U.S. followed by Europe and the Middle East while the Asia-Pacific and Latin America regions have lagged, he said.

In projecting summer booking pace, Vrbo continues to perform well overall, Kern said. There’s strength against both 2019 and 2021.

“Hotel, on the other side, is recovering,” he said. “It's not quite at the levels that we would have seen in the past. We suspect if the recovery continues that there'll be a catch-up somewhere along the line.”

In terms of future bookings, it’s difficult to tell whether people would postpone a trip or rebook if they have to cancel, Hart said.

“When people can travel, they are going to travel, and they're going to travel quite consistently throughout the year if they're able to do so, maybe more than they have in the past.”

Calling it the heart and soul of what Expedia has been focusing on, Kern said the company has been working on moving things to a singular platform to drive innovation for travelers and move travel to the next iteration of online app-based travel business.

Executives have talked about moving multiple stacks into one, and that means building a set of micro services with APIs that can be externalized and more easily used internally to drive great outcomes for travelers, he said. That means all kinds of travelers, including Expedia's business-to-consumer travelers and business-to-business travelers at the same time.

Any improvements the company makes on its checkout process or to its app will benefit all types of travelers using the system, he said.

“It will be able to drive real impact instead of the siloed way we used to have to work our way through it,” he said.

Vrbo benefited from leisure travel and the longer vacations people took so they could isolate with family during the pandemic, Kern said. It’s tricky to predict, but the locations that have yet to recover favor the company’s strongest areas, he said.

“I think we’ve got some good runway ahead in where the puck is going,” he said.

Expedia has never focused its strategy on adding supply to major cities, but it does have a presence in some big international destinations, he said.

“We think there's opportunity there, and we will continue to follow the demand trends,” he said. “As I've mentioned, we've been focused on not just sort of buying supply across the universe in everything and really being much more targeted and where the demand is and where we can get return for the homeowner, so we'll continue to do that.”

The company hasn’t focused Vrbo to be a replacement for hotels in cities, he said. The company has many great hotel partners in all major cities around the world, and they are coming back strong.

“We think that’s where the business is going to be for now,” he said. “Of course, we want to continue to expand Vrbo where it makes sense and that we’ll certainly look at cities where it makes sense.”

Expedia's total revenue for the quarter was $2.3 billion, down 17% compared to the fourth quarter of 2019, according to the company’s earnings release. Total gross bookings amounted to $17.5 billion, a 25% decrease compared to 2019, the company’s lowest quarterly drop in the year.

During the quarter, the company closed on its sale of its business travel platform, Egencia, to American Express Global Business Travel, contributing $29 million in revenue.

Net income was $276 million, and adjusted net income was $167 million. Adjusted earnings before interest, taxes, depreciation and amortization was $479 million, the highest fourth quarter in the company’s history.

As of press time, Expedia's stock was trading at $200.41 a share, up 8.3% year to date compared to a 10.7% drop for the Nasdaq Composite during the same period.

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