Average daily rates have being holding for hotels and Vrbo, its short-term rental platform, for each region, but a shift in demand mix is resulting in a slight year-over-year decline in overall lodging ADRs. At the same time, there has been some modest price pressure in prices for flights and car rentals. Even so, there’s not much evidence that travelers are trading down, Kern said. “We keep looking, but there’s definitely nothing obvious, and you’d have to squint it really hard and look by subregion to try to foray and cut it by price point and a lot of things to really see anything noticeable,” he said. Customers who use Expedia’s loyalty program currency and receive discounts for higher membership tiers are using their OneKeyCash for better room types, he said. “They're actually using the available capital they had in mind just for more rather than saving the money,” he said.

Expedia recently completed the final part of migrating Vrbo to its single front-end stack through the global launch of its new app in the U.S., Kern said. That was the last of the company’s major migrations associated with its multiyear transformation. “It has been a long, complex journey but well worth the effort as we are now in a position to accelerate into the future without the drag of transformation work that forced us to go backwards in order to go forward,” he said. “We are now in a position to dramatically increase our test and learn capacity and feature-release velocity while also providing a scalable and efficient base to operate upon.”

Expedia’s business-to-business platform is on track for a strong year, with third-quarter revenue growing 26% compared to last year, Kern said. The company is winning new deals and increasing its wallet share with existing partners. It’s also launching new products and features to keep up with its growth. In particular, demand from China continues to increase with third-quarter bookings from its partners in the country growing 150% year over year.

The company’s business-to-consumer business is picking up momentum as well, with year-over-year revenue growth of more than 400 basis points sequentially, he said. “This is what we've all been working so hard for, so it's very gratifying to see these results beginning to improve,” he said. In July, Expedia launched OneKey, its new unified loyalty program that incorporates all its major brands, website and Vrbo, Kern said. Members can earn and burn OneKeyCash across all parts of its platform, and many have already started. “As I've mentioned before, getting dividends from a program like this will take some time given the frequency with which most consumers travel,” he said. “That said, we are very happy with the early results and traction OneKey had with our members.” The company has migrated more than 82 million members to the program, he said. The addition of Vrbo to the program was followed by a 34% increase in new members over the past year.

In September, Expedia launched a series of new features aimed at solving travelers’ problems and enhancing their engagement, Kern said. The company simplified group travel planning by providing one place for those traveling together to collaborate on a group trip, he said. They can see each other’s selections and add saved options for flights, lodging, car rentals and other activities. “Products like these not only enhance the consumer experience but allow us to utilize a consumer's own network of friends and family to expand our reach,” he said. Expedia also launched tools to help users research a destination, he said. Consumers can see hotel prices, weather, the best times to visit, crowd levels and use generative AI-powered tools to figure out which neighborhood to stay in. The company is also using generative AI to scrape reviews to answer traveler questions about amenities and property details so they don’t have to sort through reviews to find their answers, Kern said.

Expedia reported lodging gross bookings reached $18.5 billion during the quarter, an 8% increase over 2022 and a record for any third quarter, according to the earnings report. Revenue grew 9% year over year to $3.9 billion, a record for any quarter. Its business-to-consumer revenue growth compared to 2022 increased by 400 basis points while its business-to-business revenue of $995 million was another record and a 26% year-over-year increase. The company reported net income of $425 million for the quarter, and adjusted net income of $778 million. It had record adjusted earnings before interest, taxes, depreciation and amortization of $1.2 billion, a 13% year-over-year increase with 110 basis points of margin expansion. Expedia repurchased about 17 million shares for a record $1.8 billion year to date. It also announced a new $5 billion share repurchase reauthorization.

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