Expedia Group’s Resilient Performance Amid Macroeconomic Headwinds

Overview

Expedia Group, a leading global travel technology company, has reported its financial results for the first quarter of 2025. Despite facing global macroeconomic and geopolitical pressures, the company has demonstrated resilience and continued growth in several key areas of its business.

Expedia Group’s mission is to power global travel for everyone, everywhere. The company operates an extensive portfolio of consumer travel brands, including Expedia.com, Hotels.com, Vrbo, and Travelocity, as well as a B2B segment that provides travel technology solutions to other businesses. The company also owns a majority stake in the hotel metasearch website trivago.

Financial Highlights

For the first quarter of 2025, Expedia Group reported total revenue of $2.988 billion, a 3% increase compared to the same period in 2024. This growth was primarily driven by a 14% increase in revenue from the B2B segment, as well as a 22% increase in advertising and media revenue from trivago.

Gross bookings, which represent the total retail value of transactions booked, increased by 4% year-over-year to $31.451 billion. This was largely due to a 6% increase in booked room nights for the company’s lodging business, despite a 1% decrease in average daily rates (ADRs).

Table: Expedia Group’s Key Financial Metrics

Metric	Q1 2025	Q1 2024	% Change
Total Revenue	$2.988 billion	$2.889 billion	+3%
Gross Bookings	$31.451 billion	$30.164 billion	+4%
Revenue Margin	9.5%	9.6%	-0.1 percentage points

Segment Performance

Expedia Group’s business is divided into three reportable segments: B2C, B2B, and trivago.

B2C Segment The B2C segment, which includes the company’s consumer-facing travel brands, generated revenue of $1.956 billion in the first quarter of 2025, a 2% decrease compared to the same period in 2024. This decline was primarily due to softer travel demand within and into the U.S. market.

B2B Segment The B2B segment, which provides travel technology solutions to other businesses, reported revenue of $947 million, a 14% increase year-over-year. This strong performance was driven by growth in the company’s lodging business and its stronger international exposure.

trivago Segment The trivago segment, which includes the company’s hotel metasearch business, generated $85 million in third-party revenue, a 22% increase compared to the first quarter of 2024. This growth was attributed to trivago’s strategic focus on brand rebuilding over the past two years.

Revenue by Service Type

Expedia Group’s revenue is generated from various service types, with the largest contribution coming from lodging, which accounted for 77% of total revenue in the first quarter of 2025.

Table: Expedia Group’s Revenue by Service Type

Service Type	Q1 2025	Q1 2024	% Change
Lodging	$2.289 billion	$2.228 billion	+3%
Air	$107 million	$115 million	-7%
Advertising and Media - EG	$174 million	$145 million	+20%
Advertising and Media - trivago	$85 million	$70 million	+22%
Other	$333 million	$331 million	+1%

Expenses and Profitability

Expedia Group’s cost of revenue remained relatively flat during the first quarter of 2025, at $357 million, compared to the same period in 2024. This was due to ongoing initiatives to drive transactional efficiencies, particularly in customer service.

Selling and marketing expenses, both direct and indirect, increased during the quarter, primarily driven by higher B2B partner commissions and increased marketing spend at the company’s B2C brands.

Technology and content expenses decreased by 6% year-over-year, mainly due to lower salary and personnel costs, as well as initiatives to optimize cloud spending.

General and administrative expenses remained relatively consistent compared to the first quarter of 2024.

The company reported an operating loss of $70 million in the first quarter of 2025, a 36% improvement from the $110 million operating loss in the same period of 2024. This was primarily due to lower restructuring charges and lower legal reserve, occupancy tax, and other charges in the current year period.

Adjusted EBITDA by Segment

Expedia Group uses Adjusted EBITDA as a key metric to evaluate the performance of its business segments. Adjusted EBITDA is a non-GAAP measure that excludes the impact of certain expenses, such as stock-based compensation, acquisition-related impacts, and restructuring charges.

Table: Expedia Group’s Adjusted EBITDA by Segment

Segment	Q1 2025	Q1 2024	% Change
B2C	$217 million	$215 million	0%
B2B	$216 million	$172 million	+26%
trivago	$(5) million	$(9) million	-47%
Unallocated Overhead Costs (Corporate)	$(132) million	$(123) million	+7%
Total Adjusted EBITDA	$296 million	$255 million	+16%

The B2B segment experienced a 26% improvement in Adjusted EBITDA, driven by strong revenue growth and margin expansion. The trivago segment’s Adjusted EBITDA loss decreased by 47% due to revenue increases. The B2C segment’s Adjusted EBITDA remained relatively flat, while the unallocated overhead costs at the corporate level increased by 7%.

Liquidity and Capital Resources

Expedia Group maintains a strong liquidity position, with $6.1 billion in cash and cash equivalents and short-term investments as of March 31, 2025. The company also has access to a $2.5 billion revolving credit facility, which was essentially untapped at the end of the quarter.

In February 2025, the company issued $1 billion of 5.4% senior unsecured notes due in 2035 and used the proceeds for general corporate purposes, including the early redemption of $1 billion in 6.25% senior notes due in 2025.

The company’s credit ratings from Moody’s, S&P, and Fitch remain investment-grade, with stable outlooks. Expedia Group was in compliance with the covenants and conditions of its debt agreements as of March 31, 2025.

Outlook and Challenges

Expedia Group’s financial performance in the first quarter of 2025 was impacted by weaker-than-expected travel demand in the U.S. market, which the company attributed to global macroeconomic and geopolitical pressures, including trade disruptions, currency fluctuations, and energy price volatility.

These trends have contributed to an increasingly complex business environment and uncertainty for the travel industry. If these pressures intensify or persist, they could further impact travel behaviors and overall demand, negatively affecting Expedia Group’s business. The company’s suppliers, business, and service partners could also be impacted, increasing the risk of credit losses and service disruptions.

Additionally, Expedia Group faces increased scrutiny and pressure from domestic and international tax authorities, which could result in higher tax payments and litigation costs, potentially impacting the company’s liquidity.

Despite these challenges, Expedia Group remains focused on leveraging its brand portfolio, supply, and platform technology to provide greater services and value to its travelers, suppliers, and business partners. The company is also working to cement its leadership in the B2B segment, as it benefits from the technology investments made for its B2C brands.

Conclusion

Expedia Group’s financial results for the first quarter of 2025 demonstrate the company’s resilience in the face of a complex and uncertain macroeconomic environment. While the company experienced softer travel demand in the U.S., it was able to drive growth in its B2B segment and its trivago business, as well as improve its overall profitability.

Looking ahead, Expedia Group will need to navigate the ongoing challenges posed by global economic and geopolitical pressures, as well as the increasing scrutiny from tax authorities. However, the company’s strong liquidity position, diversified business model, and focus on leveraging its technology and brand strengths position it well to weather these headwinds and continue delivering value to its customers and shareholders.