Airbnb, Expedia flag demand hit as Middle East conflict drags on
By Aishwarya Jain, Anshuman Tripathy and Doyinsola Oladipo
Impact of Middle East Conflict on Travel Companies
Travel Demand and Company Performance
May 7 (Reuters) - Airbnb and Expedia on Thursday joined a growing list of travel companies warning that the Middle East conflict is weighing on demand, as hostilities in the region enter their third month.
Both companies reported stronger-than-expected first-quarter revenue, but their quarterly forecasts show that escalating geopolitical uncertainty is disrupting travel routes and triggering cancellations.
Stock Market Reactions
Shares of Expedia fell 8% in extended trading after it forecast current-quarter gross bookings below Wall Street estimates, while Airbnb, which expects bookings growth to slow in the same period, was down about 1.5%.
Travel Disruptions in the Region
Travel demand in the region has fallen sharply after the U.S. and Israel attacked Iran in late February, with the escalating conflict leading to airspace closures across major tourism hubs including Dubai and prompting airlines to suspend routes.
Although some carriers have since resumed operations and peace negotiations are ongoing, international travelers remain cautious amid persistent fears of renewed conflict.
Company-Specific Impacts
Airbnb's Response to the Conflict
Airbnb said it saw elevated cancellations across Europe, the Middle East and Africa, as well as Asia-Pacific, joining peers such as Booking Holdings and Marriott in flagging disruptions from the war.
The conflict weighed on first-quarter nights booked in EMEA and is expected to remain a headwind into the second half, the company added.
Expedia's Perspective
Expedia similarly pointed to cancellations in Europe and Asia, and said that the Middle East accounts for about 2% of its business.
"The cancellations have subsided as we go into April, but certainly that was an impact," CEO Ariane Gorin told Reuters in an interview.
Financial Results and Forecasts
By the Numbers
BY THE NUMBERS
Airbnb's Financial Outlook
Airbnb expects the conflict to lower growth in its second-quarter nights and seats booked, a metric that counts both rooms and services booked on its platform, by roughly 1 percentage point.
However, it raised its 2026 revenue growth forecast to the "low- to mid-teens", compared with "at least low double-digits" earlier, banking on strong travel demand and higher pricing for vacation rentals in North America and Latin America. Analysts on average expect revenue to grow 12% during the year.
Travel demand in the U.S., which represents about 30% of Airbnb's room nights, is beginning to show signs of a rebound after a K-shaped market weighed on demand for budget and midscale offerings even as the premium and luxury segments held up well.
Expedia's Financial Performance
Meanwhile, Seattle-based Expedia expects second-quarter gross bookings of $32.5 billion to $33.1 billion, the midpoint of which is slightly below analysts' average estimate of $33 billion, according to data compiled by LSEG.
In the first quarter, however, Expedia's gross bookings rose nearly 13% from a year earlier, driven by strong demand for international travel. Revenue growth was faster outside the U.S. than in the country, CEO Gorin said.
(Reporting by Aishwarya Jain in Bengaluru and Doyinsola Oladipo in New York; Editing by Jonathan Ananda)
