Expedia Group Q2 revenue tops $2B driven by U.S. hotel and vacation rental bookings

Expedia Group saw its revenue increase more than 270% in the second quarter of this compared to the same period last year, from $566 million to more than $2.1 billion.

Gross bookings in the quarter jumped more substantially – from $2.7 billion in Q2 2020 to nearly $21 billion in this most recent quarter.

But, in a statement about the results, Expedia Group CEO Peter Kern expressed concern about growing uncertainty due to newer COVID variants. Earlier today the company announced its family of brands – including Expedia, Vrbo, Hotels.com and more – have joined a program supporting vaccine distribution.

For every eligible booking in one of Expedia Group’s apps, the company will donate $2 – minimally a total of $10 million and up to $12 million - to support UNICEF’s global COVID-19 response.

“The second quarter saw continued improvement in many global travel segments with North America in particular showing strength,” says Peter Kern, vice chairman and CEO of Expedia Group.

"Expedia Group benefited from strong vacation rental performance and improved conventional lodging, offset by continued softness in international travel, corporate travel, and relatively high consumer interest in smaller markets and lower-end accommodations. While that strength has continued into Q3, recent COVID variant news around the world continues to create uncertainty in the travel industry."

“Unfortunately, the road to full travel recovery remains bumpy until more of the world is vaccinated. For our part, we just launched our Give the World a Shot program in partnership with UNICEF to help support global COVID-19 vaccine distribution. We invite other companies to join this effort so we can all get the world back on its feet again.”

In a call with analysts, Kern says the company saw progressive improvement in April and May and a “significant step up in June” but now in July there has been “some backwards movement” to April levels.

Adjusted EBITDA in the second quarter was $201 million, up from a loss of $436 million in Q2 2020.

CFO Eric Hart says total revenue of $2.1 billion is still down approximately 33% compared to Q2 of 2019, but that “was a meaningful improvement from last quarter with revenue down approx. 52%. We saw continued strength from Vrbo and improving trends within our hotel business, while ADRs were up effectively across the board from last quarter."

As a percentage of total worldwide revenue in the second quarter of 2021, lodging accounted for 73%, advertising and media accounted for 8%, air accounted for 4% and all other revenues accounted for the remaining 15%.

Expedia Group’s Q2 adjusted selling and marketing expense was nearly $1.2 billion, up 320% from $278 million in the same period last year.

And adjusted selling and marketing expense increased as a percent of revenue, to 55% from 49% in Q2 2020

When asked about brand marketing strategies, Kern says, “We are investing in relative strength, so for example Vrbo has been an area of considerably increased investment during the past several quarters. [There are] Other opportunities regionally where we’ve put money, whether that’s in traditional brand spend or social or other things.

“While we are leaning into that and leaning into our biggest brands and strong markets like the U.S., we believe we can do a lot better in terms of brand messaging, getting cleaner on brand proposition and... getting brands to work together as a family of brands as opposed to as sort of traditional almost competitors. So we think there’s a lot of opportunity to not just spend into brand... but spend that money more efficiently against even stronger creative and more efficient ways to build brands... And yes we intend to also grow in new geos as we refine our capabilities there and pick markets where we are going to go on the offensive.”

Along with refining marketing strategies, Hart says the company it has been focused on simplifying its business to make it more agile and able to prioritize the best opportunities for future growth and profitability. Since the beginning of 2020, Expedia Group has either shut down or sold eight businesses, most recently selling Alice to ASG . And Hart says this week the company officially accepted the terms of American Express Global Business Travel’s offer to acquire Egencia , and he expects the transaction to close before the end of 2021.

When asked about priorities for new CTO Rathi Murthy, who joined the company from Verizon in May , Kern says she is helping Expedia Group move to “one unified technology team and one unified architecture.”

“It’s a broad process, it cuts across all the technology in our enterprise, and Rathi is hard at work driving that,” he says.

“As we get the back end right there’s also the customer-facing side, which is all about the UI and the UX. We want to be an app-first company, and we’re driving progress to be that. And we want to be design-focused... and it’s really about bringing excellence to all those disciplines.”