Global OTA group posts 14% reduction in gross bookings for the first quarter of 2021
Situation in India is a warning about the recovery, says Expedia chief Peter Kern
The situation in India, which is experiencing a devastating second COVID-19 wave, reflects the fragile nature of any travel rebound, Expedia Group chief Peter Kern warned.
Kern was commenting on first quester trading to March 31, which saw the global OTA record a 14% decrease in gross bookings.
However, the picture is mixed with domestic and holiday rentals seeing strong growth while international travel continues to face challenges.
Kern, Expedia Group vice chairman and chief executive, said: “Travel remains a study in contrasts – with strong vacation rental growth and demand for domestic travel continuing to drive us forward, while demand for international and business travel and conventional lodging remain challenged.
“Beach and outdoor destinations have shown robust rebounds while major cities remain muted, and some regions have been growing while others remain locked down. As the vaccine rollout continues, we expect to see a now familiar story play out; domestic and leisure demand lead the recovery.
“However, as the dire situation in India reminds us, in some markets, things may get worse before they get better. For our part, we continue to invest in bolstering our technology platform and in marketing where we can best get ahead of the demand curve.
“Because the market has clearly shown that when people feel safe to travel, demand comes roaring back.”
In its quarterly earning update Expedia said trends for accommodation, air and other travel products improved sequentially from the fourth quarter, with “lodging bookings” experiencing year-over-year growth in the first quarter.
For the first quarter of 2021, total revenue decreased 44%. Expedia Group’s retail division revenue declined 35% in the quarter and B2B revenue declined 62%.
The slower decline in retail reflected improvement in leisure travel trends, particularly in North America, while B2B continues to be impacted by the slower recovery for corporate travel demand.
As a percentage of total worldwide revenue in the first quarter of 2021, lodging accounted for 72%, advertising and media accounted for 7%, air accounted for 4% and all other revenues accounted for 17%.
Lodging revenue decreased 41% in the first quarter of 2021 on a 47% decrease in room nights stayed, partly offset by a 10% increase in revenue per room night.
Revenue per room night benefited from an increase in the percentage of alternative accommodation stayed room nights, which have a higher revenue per room night.
Air revenue decreased 55% in the first quarter of 2021 reflecting a 50% decline in tickets sold and a 10% decline in revenue per ticket.
Expedia said the decline in revenue per ticket was primarily related to a shift in product mix.
Advertising and media revenue decreased 57% in the first quarter of 2021 due to declines at trivago and Expedia Group Media Solutions. Other revenue decreased 42% in the first quarter of 2021.
Given the positive ongoing trends within the business and confidence in the current liquidity position, Expedia Group will pay off 50% of the preferred stock issued in 2020 during the second quarter of 2021.