Expedia’s 2020 revenue sinks 57% as pandemic continues to roil travel industry

2020 was not pretty for Expedia Group’s business.

The pandemic hit the Seattle travel giant hard last year with travel restrictions placed across the globe. Revenue dropped 57% to $5.2 billion and gross bookings fell 66% to $36.7 billion in 2020, Expedia reported today as part of its fourth quarter earnings rundown. The company posted a loss in each quarter of 2020 after three consecutive profitable quarters in 2019.

Expedia shares were down slightly after its holiday quarter missed expectations for revenue ($920 million) and profit (-$2.64 per share). Analysts expected revenue of $1.12 billion and earnings per share of -$1.97.

Expedia CEO Peter Kern noted “signs of hope” with vaccine approvals, but rising COVID-19 cases and other travel shutdowns still hurt the company’s business.

“As a result, Q4 did not show any real sequential progress other than some signs of modest improvement around the holidays that carried into the early part of 2021,” he said in a statement.

U.S. travel spending dropped 42% in 2020 to $679 billion, according to Tourism Economics. The industry bounced back after the March lockdowns last year, but still remains well below regular levels with the ongoing pandemic.

Expedia Group, based in Seattle, includes travel brands such as Vrbo, Orbitz, Hotwire, Trivago, Hotels.com, and Egencia in addition to the flagship Expedia.com. Kern, a longtime Expedia Group board member, has been CEO since April.

Expedia responded to the economic and health crisis by raising $3.2 billion in debt and equity in April. It also made additional cutbacks including employee furloughs and executive salary reductions, and named longtime board member Kern as its new CEO. Kern had been overseeing the company’s operations with Chairman Barry Diller since the ouster of former CEO Mark Okerstrom and CFO Alan Pickerill in December 2019.

In addition to the COVID-19 crisis, Expedia also continues to deal with Google’s dual role as a rival in online travel, and a key source of customers through search traffic and paid advertising.

One bright spot for Expedia is its vacation rental platform Vrbo, which now has a higher revenue per room night than the rest of the company’s lodging business.

Vrbo saw blowback online for not following the lead of competitor Airbnb, which blocked and canceled reservations in the Washington, D.C., area during inauguration week last month following the violent storming of the U.S. Capitol on Jan. 6. Vrbo ended up blocking new bookings in and around the nation’s capital that week.

Airbnb went public in December and its stock has been climbing. Airbnb is now valued at nearly $130 billion, compared to Expedia’s market capitalization of $21 billion.

Expedia stock sunk in March 2020 but has rebounded back to pre-pandemic levels, trading at around $149/share on Thursday.