This week’s Update takes a deep dive into all things Expedia, and includes several stories regarding Expedia’s recent disastrous quarterly earnings release, an actual copy of the release as well as a copy of a complaint recently filed in Washington state against Expedia that raises some interesting questions for Expedia and other travel intermediaries. Enjoy.
Expedia’s Recent Quarterly Earnings Release Reflects Current Travel Industry Misery
(“Abysmal April pulls Expedia Group down to record lows in second quarter,” Jul 31, 2020 via PhocusWire)
Where to start…Here are my key takeaways from Expedia’s second-quarter earnings report:
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- “Worst quarter the travel industry has seen in modern history.” Peter Kern, Expedia CEO
- 82 percent decline year over year in overall revenue ($3.2 billion to $566 million), with lodging revenue declining 78 percent
- 90 percent decline year over year in gross bookings
- 91 percent decline year over year in media and advertising revenues (Trivago and Expedia Group Media Solutions)
- Company-wide selling and marketing expenses in the second quarter dropped from $1.6 billion to $296 million
- April was the low point (cancellations exceeding bookings), but May and June have seen modest increases in bookings (and cancellations have stabilized).
- Drive-to destinations are the first to return
- Vrbo has become Expedia Group’s pandemic bright spot with daily rates continuing to increase (yes, increase) and the overwhelming majority (experts speculate as high as 83 percent) of bookings coming through organic (less expensive) sources. Dare we say that Vrbo is engaged in its own form of direct booking program…
- Although Expedia’s $275 million industry recovery program has been rolled out to partners in 80 countries, no information was given on the number of partners that have actually enrolled in the program and/or how much of the $275 million has actually been distributed.
Class Action Complaint Alleges Violations of State Consumer Protection Act for Expedia’s Refusal to Secure Traveler Refunds
Recently, a passenger on a canceled July 2020 flight to Italy on TAP Air Portugal filed a class action complaint against Expedia asserting, among other things, that (a) the passenger had booked his flight with Expedia, not the airline, (b) the passenger’s primary relationship was with Expedia, not with the airline, and (c) Expedia’s refusal to ensure that the passenger received a refund for the canceled flight (as opposed to the voucher that was offered) constituted unfair and deceptive conduct in violation of Washington state’s Consumer Protection Act. Although there are enumerable issues with the complaint and its many assertions, it will be interesting to see how quickly Expedia can dismiss the complaint and whether similar class action claims will be made against other agents, tour operators and/or intermediaries over suppliers’ failures to provide refunds. Time to check those booking terms and conditions…
Other news:
| Expedia Bookings Down 90 Percent From 2019 as Virus Hammers Travel | |||||||
| Expedia Revenue Sinks 82 Percent Amid ‘Worst Quarter the Travel Industry Has Seen in Modern History’ Jul 30, 2020 via GeekWire | |||||||
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PrincipalGreg is Chair of the firm's national Hospitality, Travel & Tourism practice, which is directed at the variety of matters faced by hospitality and travel industry members, including purchase and sales agreements, management ...
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About the Editor
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.
