Expedia signals May rebound as cancellations stabilize

Business

Online travel booking company Expedia Group Inc (EXPE.O) on Wednesday pointed to demand recovering in May as cancellation rates stabilize, overshadowing a bigger-than-expected quarterly loss and sending its shares up nearly 4%.

U.S. airlines have signaled slower ticket cancellations and an improvement in bookings on some routes, as countries ease lockdowns imposed to curb the spread of the coronavirus that had crippled the global travel industry.

“What we’ve seen is green shoots in the areas you would expect, places where movement has become possible, where people can now start to think about their summer holiday,” a company executive said on a post-earnings conference call.

Expedia said it was seeing strength in its vacation rental business, Vrbo, as people look to get away in the summer after being forced to stay at home.

Bookings for online travel agencies will fall about 60% in the third quarter, compared with a more than 80% plunge in the prior quarter, according to SunTrust analyst Naved Khan.

Expedia also said it secured $3.95 billion in funding, including $1.2 billion in preferred equity investments from Apollo Global Management (APO.N) and Silver Lake.

In the first quarter, gross bookings tumbled 39.2% to $17.89 billion.

Net loss attributable to Expedia was $1.30 billion, or $9.24 per share, in the quarter ended March 31, compared with $103 million, or 69 cents per share, a year earlier.

Excluding items, the company posted a loss of $1.83 per share, compared with the average analyst estimate of a loss of $1.23, according to IBES data from Refinitiv.

Revenue fell 15.3% to $2.21 billion.