Expedia Group CEO and Vice Chairman Peter Kern will be stepping down from his role as CEO with the company this May.
During the online travel agency’s 2023 fourth-quarter and full-year earnings call Thursday, Kern announced that Ariane Gorin, president of Expedia for Business, will take over as CEO, and Kern will remain with the company as vice chairman.
Kern began his role as CEO in April 2020, leading the company through the COVID-19 pandemic.
“One might assume that COVID was the defining part of my tenure; in reality, we quickly saw an opportunity to use our COVID time to embark on one of the most audacious and ambitious transformations I think a company of our size has ever attempted,” he said. “Over the last four years, we built a tremendous team who in turn accomplished amazing things. I have to say that what started in an unlikely and difficult way, it turned out to be one of the most compelling and challenging opportunities of my career.”
Kern said he will “sprint through the finish line on the way out,” and will ensure a seamless transition to Gorin, who has served as president of Expedia for Business since 2021 and has been with Expedia Group since 2013.
“I just want to say that I’ve had the pleasure of working with Ariane closely for the last four years, and I believe she is a terrific choice to take the company forward and build on what we’ve created,” Kern said.
Performance in 2023
Expedia met its guidance in 2023, and Kern said he was “generally pleased” with the company’s performance.
“We did an awful lot in 2023, from the launch of One Key to the completion of Vrbo migration, from the plumbing of machine learning and AI into more and more of our customer experience, to the launch of ChatGPT-assisted trip planning,” he said.
Expedia launched OneKey in July 2023, a rewards program that incorporates all its major brands, Vrbo and Hotels.com. Kern said he’s been content with its results so far and called the platform Expedia's “secret weapon.”
“As far as OneKey goes … I’d say I’m satisfied,” he said. “It’s still early days. We’re seeing a lot of the indicators we want to see.”
Perhaps the biggest indicator is an increase in cross shopping between the OneKey companies. It’s not something that will be apparent immediately as many people only take a few trips a year and the platform launched less than a year ago, but there are good initial signs, he said.
Hotel gross bookings for Expedia’s lodging business were up 13% year over year in 2023. Vrbo, Expedia’s short-term rental platform, finished its front-end migration in the fourth quarter. The platform suffered expected conversion degradation and saw a cutback in marketing as an effect of the degradation, but Kern said the product is improving every day.
“[We are] really excited about our new brand work that is designed to punch our main competitors squarely in the nose, and we are leaning back into spin,” he said.
Looking Ahead
Kern said he expects travel demand to remain healthy but growth rates to decelerate across the world in 2024. Overall lodging average daily rate grew slightly in the fourth quarter of 2023, but was down year over year.
“Against this backdrop though, we are well-positioned to go back on offense, gain share against competition, and ultimately grow our top and bottom line meaningfully this year,” he said. “Our strategy will remain largely unchanged, but we can finally stop doing surgery on ourselves and instead execute without the numerous distractions we have faced in recent years.”
Expedia has five strategic priorities for 2024, Kern said:
- Focus on acquiring and retaining high return on investment travelers.
- Increase share of wallet with travelers and partners.
- Accelerate global market expansion.
- Cement its leadership in the business-to-business segment.
- Drive efficiency and effectiveness across its business.
By the Numbers
In its 2023 fourth-quarter and full-year earnings report, Expedia reported a record full-year lodging gross bookings revenue of $74 billion in 2023, up 11% over 2022. Full-year revenue was $12.8 billion and fourth-quarter revenue was $2.9 billion, both company records and 10% increases over 2022 levels.
Net income in the fourth quarter was $132 million, down 25% year over year. Adjusted net income, however, was $242 million, up 24% over 2022. Full-year net income was $797 million, up a record 127% over 2022. Adjusted net income for the year was $1.4 billion, up 32% year over year.
Expedia reported adjusted earnings before interest, taxes, depreciation and amortization of $532 million in the fourth quarter of 2023, up 19% over 2022 levels. Adjusted EBITDA for full-year 2023 was reported at $2.7 billion compared to $2.4 billion in 2022.