Expedia’s ‘green shoots’

Expedia

Peter Kern, Expedia’s incoming CEO, told analysts on the group’s first quarter earnings call that the group was seeing “green shoots”.

The OTA said that Vrbo, it’s alternative accommodation platform, had been “a bright spot”.

As of the end of April the group’s total cash balance was $6.5bn, after a $1.2bn preferred equity investment from Apollo and Silver Lake and raising $2.75bn in unsecured to senior notes.

Commenting further on Vrbo, Kern said:  “We have seen really markedly better performance and that clearly seems to be around people who have been stuck in their city dwellings and are looking forward to being able to get away to some place for a vacation with their families this summer. And we are pleased to see the demand.

“It’s clear that the Vrbo focus on the whole home experience is a real advantage over the competition right now. Vrbo is not big in cities. It’s not big in rooms in other homes and those kinds of things that is really a whole home experience and we have seen some really nice signals out of that vacation rental business.”

For the first quarter revenue was down 15% from $2.6bn to $2.2bn. Gross bookings for the quarter ending March 31 were down 39% year-over-year from $29.4bn to $17.9m.

Kern said: “Like some of the other companies in our space, you probably heard that late March into April was the trough of the business. That is true for us. We saw gross bookings, new lodging bookings down about 85% year-on-year, which of course was terrible. And cancellations were extremely high.

“Since then, I am pleased to say, but I would not get overly excited about it, that we have seen nice growth coming into May. And essentially, what we have seen is both growing out green shoots in the areas you would expect, places where movement has become possible, where people can now start to think about their summer holidays, et cetera. We see that very quickly when that happens and cancellations have settled down. They are still at elevated levels, but they have stabilised.”

Kern said: “Don’t get too focused on the quarterly numbers, I don’t think they are meaningful.”

Looking ahead, Kern said: “There’s no reason to assume it won’t be similar to historic events and that suppliers will look to platforms like ours to drive as much volume as they can to fill up their planes and hotels and everything else.”