A360
Key Takeaways✦ Atlas AI
01
Geopolitical events impacted Expedia's bookings.
02
Middle East conflict caused widespread cancellations.
03
Mexico travel advisory reduced regional demand.
Atlas AI
Expedia shares fell 8% on Friday asourceser the online travel agency said the conflict in the Middle East and a U.S. travel advisory for Mexico reduced its quarterly bookings and room-night growth by about 200 basis points.
"While the Middle East itself represents less than 2% of our total bookings, we saw elevated traveler cancellations across Europe and Asia," CEO Ariane Gorin said.
Military strikes in the region led to airspace closures in several countries, disrupting major transit hubs such as Dubai and prompting airlines to suspend routes.
Demand for travel to Mexico also weakened asourceser the killing of a drug lord in February sparked violence and triggered a U.S. shelter-in-place advisory for Americans.
Analysts said the combined headwind was larger than expected, noting that Booking Holdings faced a similar impact despite having greater regional exposure. BTIG analyst Jake Fuller said Expedia’s mix was expected to provide more insulation from the disruption.
Despite the pressures, Expedia maintained its full-year guidance. Analysts attributed that to operational execution and the view that the disruptions are temporary.
Expedia shares were trading at 11.70 times forward profit estimates, compared with 15.03 for Booking and 26.91 for Airbnb.
