Expedia forecasts downbeat bookings on Middle East war impact
By Anshuman Tripathy
Expedia’s Financial Outlook and Market Impact
May 7 (Reuters) - Online travel platform Expedia forecast current-quarter gross bookings below Wall Street estimates on Thursday as the Middle East conflict impacted demand, sending its shares down 6% in after-hours trading.
Industry-Wide Demand Recovery Concerns
An uncertain rest of the year threatens demand recovery in the travel industry as trade volatility and prolonged conflict could further increase costs for customers.
CEO Commentary on Regional Impacts
"In March, we did see the impact of the conflict in the Middle East," CEO Ariane Gorin told Reuters in an interview.
"While the Middle East is only about 2% of our business, we saw cancellations across Europe and Asia."
Gross Bookings and Room Nights Effect
Gorin said there was a two-point impact on the company's gross bookings and room nights arising from the Middle East conflict and travel advisories in Mexico.
Broader Industry Effects
Peer Booking Holdings and hotel operators such as Marriott and Hilton have also flagged a hit to profitability due to the war, which erupted in late February.
Financial Performance and Forecasts
Second-Quarter Gross Bookings Guidance
Seattle-based Expedia expects second-quarter gross bookings to be in the range 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.
"The cancellations have subsided as we go into April, but certainly that was an impact," Gorin said.
Advertising and Media Business Growth
The company's advertising and media business rose 15% during the first quarter, aided by Trivago, which recorded a 47% growth in revenue.
Quarterly Results Overview
Quarterly gross bookings rose nearly 13% from a year earlier, driven by strong demand for international travel. Gorin said that revenue growth was faster outside the U.S. than in the country.
Profit and Revenue Highlights
The Vrbo-parent reported an adjusted profit of $1.96 per share for the first quarter, beating analysts' estimates of $1.38 apiece.
Revenue for the quarter ended March 31 rose about 15% to $3.43 billion. Analysts on average expected $3.35 billion.
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Jonathan Ananda)