Despite new COVID variants posing an ever-present threat and an uncertain global economy, traveler deposits for Vrbo bookings fueled a second-quarter windfall for parent company Expedia Group, according to earnings on Thursday.
Traveler deposits for Vrbo bookings reached $2.8 billion as of June 30, up from $1.7 billion at the end of 2021, according to Expedia Group earnings data. Overall, Expedia Group showed a strong second-quarter performance and exceeded analysts’ expectations, with lodging gross bookings up 8 percent from the second quarter of 2019 to the highest in the company’s history.
Expedia Group’s revenue soared 51 percent year over year while rising a modest 1 percent from the second quarter of 2019 to $3.2 billion.
Nonetheless, the company saw a net loss of $185 million with an adjusted net income of $310 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $648 million, up 14 percent from the second quarter of 2019.
“We are very pleased with our financial performance this quarter,” Peter Kern, vice chairman and CEO of Expedia Group, said in a statement.
“Lodging bookings reached a record high and we posted our highest-ever second-quarter revenue and adjusted EBITDA,” Kern added. “These were even more noteworthy given the simplification efforts we undertook two years ago including the sale of our Egencia corporate travel business. Despite the disruptions during the summer travel season and an uncertain macroeconomic backdrop, travel demand has remained strong.”
Meanwhile, the broader company has continued to be affected by the ups-and-downs of the pandemic economic climate in recent years, which has come with disparate impacts on businesses throughout the travel and hospitality industries.
First came the earliest strains of the coronavirus in 2020 — and the shutdowns that were intended to slow its spread. Then months and years of recovery began, as not every consumer felt safe to travel amid the spread of the virus.
With the mass vaccine rollout of 2021, some began to feel more comfortable traveling, and booking rooms. But new waves of Delta and Omicron strains each threw a wrench in the recovery.
Despite these challenges, Vrbo, which like competitor Airbnb allows homeowners to rent out properties on a short-term basis, had been steadily gaining steam before booming at the beginning of 2022.
The company had previously reported its restricted cash — which mostly consists of traveler deposits for Vrbo bookings — jumped to $2.6 billion in the first three months of 2022. That’s up from $1.7 billion in the final three months of 2021, and $1.6 billion the quarter before that.
In the first quarter of 2022, Expedia Group as a whole remained well below the level of business it had become accustomed to before the pandemic. Total gross bookings were $24 billion, 17 percent lower than in the first quarter of 2019.
Still, that represented significant progress on the road to recovery. Bookings were up 58 percent in the first three months of the year, compared to the first quarter of 2021.
On an earnings call, Kern said Expedia as a whole experienced “some choppiness” in bookings during July as a result of service disruptions in North America and Europe. However, he said those bookings largely normalized by the second half of the month and have returned to 2019 levels.
“There’s been a lot of noise and a lot of cancellations and we think that’s responsible for a lot of it,” Kern said. “We feel like it was more temporary than anything.”