Expedia raises full-year outlook on resilient travel demand

Expedia Group Inc. raised its full-year gross bookings and revenue outlook, signaling that strong travel trends are continuing into the holiday quarter. Revenue for the year is now expected to increase 6.5% at the midpoint, up from 3% to 5% previously, the company said Thursday in a statement. Analysts expected a 4.6% rise, according to Bloomberg-compiled estimates. It also sees gross bookings growing 7%, again ahead of estimates and Expedia’s previous guidance.

“It was a combination of the performance we had in the third quarter, and the momentum we’re seeing in October,” Chief Executive Officer Ariane Gorin said in an interview. Shares of Expedia rose as much as 18% in extended trading. The stock has been up 18% so far this year through Thursday’s close.

The results echo a rosy report last week from travel peer Booking Holdings Inc., which gave a better-than-expected outlook for the year. Airbnb Inc. posted its outlook for the holiday quarter ahead of expectations in its Thursday report and citied strong demand in October. Expedia’s has yet to see an impact from the US government shutdown just over a month in.

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“In the US, just to be clear, we haven’t seen a change in trend yet, but we’re watching very carefully and this weekend will be a critical one as we as we head into that,” Chief Financial Officer Scott Schenkel said on its earnings call.

Expedia, which also owns Hotels.com and Vrbo, broadly exceeded expectations for the third quarter. Adjusted earnings per share for the three months ended September 30 came to $7.57, better than the $6.94 Wall Street was expecting.

Gross bookings for the period rose 12% to $30.7 billion, beating the average analyst estimate of $29.2 billion. That was largely thanks to Expedia’s business-to-business sales, it said in the statement. The segment has accounted for a third of revenue over the past year, with the company planning to expand in the space by signing new partners and deepening its existing relationships.

Rooms booked, another closely watched metric, also came in ahead of expectations, totaling 108.2 million. Wall Street was expecting 103.9 million. Expedia said that demand rose in both its higher- and lower-end markets, signaling that both wealthy consumers and more budget-conscious customers still have an appetite for discretionary travel.

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Elsewhere in the travel industry, cruise liners have reported mixed results for the quarter, as Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. both missed on a key metric measuring revenue per available passenger on days they’re aboard a ship.

There is also some evidence that hotel chains are faltering. Hyatt Hotels Corp.’s revenue per available room saw its slowest growth rate in over a year. During an earnings call earlier Thursday, executives attributed lower booking volumes in the quarter to a decline in travel to four-star and below hotels.