Expedia Group recently announced a change in leadership, with Ariane Gorin taking over as CEO from Peter Kern. The company adjusted its 2024 outlook due to slower-than-expected growth at Vrbo, its vacation rental platform. The full-year guidance was lowered to mid-to-high single-digit top-line growth, with profit margins expected to stay similar to last year. Kern highlighted issues with Vrbo’s recovery post a tech platform migration, as well as other challenges within the company that have impacted growth projections for the year.
Gorin has expressed her ambition as the incoming CEO to focus on accelerating growth and refining the long-term strategy for Expedia Group’s consumer business. She emphasized the need to drive traffic, increase conversion rates, and expand margins by improving attach rates, take rates, and marketing efficiency. Gorin acknowledged the transformations within the company in recent years, including technical migrations and changes in loyalty programs, and highlighted the need to address these challenges to achieve growth.
One of the main issues impacting Expedia Group’s growth has been the slow recovery of Vrbo post a tech platform migration. Gorin explained that the tech migration, which integrated the front-end tech stacks of major brands like Expedia, Hotels.com, and Vrbo onto one platform, is aimed at making the company more agile and innovative. However, fine-tuning the systems will take time, impacting Vrbo’s rebound and overall growth projections for the company.
Hotels.com has also faced challenges, with lower performance attributed to the tech migrations and changes in the loyalty program. Expedia Group shifted to a more nuanced loyalty program, impacting customer earn rates. Hotels.com, being the most international of the group’s brands, faced additional hurdles due to decreased spending on international marketing. Despite these challenges, Gorin remains confident in the company’s ability to leverage AI and machine learning to improve sales efficiency and provide personalized experiences for travelers.
Expedia Group saw growth in its loyalty programs, with new membership up 40% year-on-year following a relaunch of the One Key program. The company continues to focus on growth in North America, their slowest-growing region, while also looking to expand internationally. Gorin, with her experience in European markets, aims to help the company grow globally. The company reported revenue gains in the first quarter of 2024, with improvement across multiple segments driving growth.
Expedia Group had a net loss in the first quarter but saw an increase in adjusted EBITDA, a measure of profit. The company continues to manage its debt and free cash flow, with a focus on reinvesting savings from cost actions back into marketing. Expedia Group also saw an increase in booked room nights in the first quarter, despite having previously announced layoffs that would impact approximately 8% of its workforce. The company is looking to realign its strategies under new leadership to drive growth moving forward.
