Vrbo gives Expedia Group a boost in the fourth quarter

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Expedia headquarters [Credit: VDB Photos/Shutterstock.com]
Expedia Group saw total gross bookings plummet 67% in the fourth quarter, but it reported improvement at the end of the year. Photo Credit: VDB Photos/Shutterstock.com

Although Expedia Group saw total gross bookings plummet 67% in the fourth quarter of 2020, the company reported improvement at the very tail end of the year, with Expedia CEO Peter Kern continuing to credit Vrbo with driving much of the company's recovery progress.

"Booking trends in the fourth quarter pretty much mirrored the third quarter, but that did moderate towards the holiday season and the end of the quarter, and that improvement has seemed to continue into January," Kern told investors during Expedia's fourth-quarter earnings call on Thursday. "We did see that improvement, overall, driven by Vrbo, which continues to be a terrific use case with the whole-home market being very attractive."

Related report: Vacation rentals bouncing back more strongly than hotels

Looking to build off of Vrbo's momentum, Kern said that Expedia largely focused its fourth-quarter marketing efforts around the short-term vacation rental arm, with the goal of driving brand recognition. 

The company is also focusing on driving Vrbo's direct traffic, recently removing Vrbo listings from Google's vacation rental metasearch platform.

"Our focus is, as much as possible, on driving direct traffic, driving incremental profitability from all our performance marketing and, as we see opportunity, to remove unprofitable activities," Kern said.

While booking windows remain short on the hotel side, Expedia CFO Eric Hart, told investors that Vrbo's booking windows have started to lengthen, with the platform seeing a notable increase in reservations for the coming summer period. 

"We've seen Vrbo's [booking windows] elongate again and look much more like we would have expected to see in any other year," said Hart. "We know there's pent-up demand. And I think people have confidence that they're going to be able to travel, at least domestically. So they're starting to book those summer months now."

Expedia reported a fourth-quarter revenue decline of 67% to $920 million. The company recorded a net loss of $412 million for the quarter, versus a net income of $76 million in the fourth quarter of 2019.

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