Expedia Group encouraged by Vrbo’s Q3 performance

Vrbo, Expedia Group’s alternative-accommodations provider, saw its first full quarter of bookings growth in the third quarter this year, CEO Ariane Gorin said during the company’s most recent financial earnings call on Thursday.

“Bookings were up modestly, with traffic and conversion both growing despite the negative impact of Hurricane Helene,” Gorin said.

Improving the company’s B2C performance has been one of Gorin’s goals this year. She stepped into the role as CEO of Expedia Group, No. 2 on Travel Weekly’s Power List, in May.

Expedia’s B2C business includes Expedia, Hotels.com and Vrbo. While the company has viewed the performance of Expedia favorably, the recovery of Vrbo and Hotels.com has lagged since they were migrated onto the same platform. That project had been a long-term one that was completed earlier this year.

Gorin attributed Vrbo’s improvement in the third quarter to several factors: improving its app, making it faster and adding features to streamline the user experience; adding nearly 1 million units that were previously only available on Expedia, designed for shorter stays in more urban areas and broadening the appeal of Vrbo; and improving the quality of existing supply on Vrbo with things like more flexible cancellation policies and discounts for longer stays.

Traffic to the app improved in the quarter, as well, she said.

Looking ahead

As for the fourth quarter of the year, Gorin said Hurricane Milton made October a challenging month, but “we believe that our focus on the basics — traffic, our product and our supply– will continue to drive positive momentum for Vrbo.”

Gorin also sees “an opportunity in the long term” in integrating more Vrbo inventory into its B2B offerings.

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“We do have a few partners who are using our vacation rental inventory,” she said. “As you can imagine, selling vacation rentals, there is some complexity that is different from hotels — requirements on communication between the traveler and the owner, for example. We’re testing it. We want to make sure that we’re going to be able to deliver a great travel experience to our B2B partners’ travelers and to our hosts and owners.

Of Hotels.com, Gorin said there are also long-term opportunities to integrate alternative accommodations. In the third quarter, Hotels.com’s performance was “stable, but it hasn’t returned to growth,” she said.

She attributed that to the impact of Expedia’s platform migration, changing to a single loyalty program (One Key) for all brands and international pullback. But with an increased emphasis on international business, she said, Hotels.com is benefitting.

A soft July

Overall, Gorin said, demand was softer in July with improvement in August and September. International demand was stronger than U.S. demand, with booked room nights in the U.S. growing in low single digits. That figure grew in low double digits in Europe, and the high teens in the rest of the world.

Prices for hotels and vacation rentals remained steady, while there were some pressures on pricing for air and car. Air ticket prices grew in September, Gorin said.

Expedia Group reported booked room night growth of 9% in the third quarter. Total gross bookings of $27.5 billion grew 7%.

In the third quarter, revenue was up 3%, to $4.1 billion. Adjusted net income was up 4%, to $809 million.