My key takeaways from this past week’s Expedia call are below:
Highlights from the recently announced sale of Expedia’s corporate travel platform, Egencia, to Amex GBT include (i) Expedia eventually owning approximately 14 percent of the combined businesses post-closing – which Expedia assumes will be worth $700 million and (ii) the deal comprising a long-term supply agreement between Expedia Partner Services (EPS) and Amex GBT, which according to Expedia CEO, Peter Kern, underscores EPS’ continuing efforts to position itself as a B2B business platform and allow Expedia to focus on its core B2C and B2B businesses.
Over the past quarter, Expedia has shifted its perspective on marketing – moving from an initial bias against large marketing commitments early in the quarter to now making major investments in an attempt to get out ahead of the anticipated wave of travel demand. Expedia, Orbitz and Vrbo are the initial beneficiaries of this new marketing commitment.
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The knock on Expedia Group over the years was that it was too U.S.-focused, but the online travel agency turned that into a strength during the first quarter at least temporarily.
Referring to Covid’s uneven global trajectory as a “study in contrast,” Expedia Group CEO Peter Kern told financial analysts Thursday that the company “benefited greatly in our vacation rental business and our domestic U.S. business, but other parts of the business still remain challenged.”
So while in the first quarter of 2019, before the pandemic ruptured the world, Expedia Group generated about 62 percent of its revenue from the U.S. But in the first quarter of 2021, because the U.S. was relatively open, and much of Europe and parts of Asia were locked down, Expedia Group generated more than 80 percent of its revenue domestically in the U.S.
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