Expedia beat its forecast on a $1 billion sale. Hotels gave the discount.
Expedia's September sale passed $1 billion in bookings and pulled demand into the third quarter, while growth in the rate per room slowed to 2% and Expedia guided fourth-quarter bookings to 3–5%
by Markus Busch
Driving the news. Expedia Group's gross bookings grew 11% in the third quarter, to $34.0 billion, and revenue 12%, both above the top of its own forecast, according to the results it filed on November 4. Room nights rose 7%, to 115.7 million.
On the call, chief executive Ariane Gorin named one of the reasons. The September sale was Expedia's "third consecutive sales event to exceed $1 billion in bookings, demonstrating the power of our two-sided marketplace." Finance chief Derek Andersen said Expedia had moved the sale a few weeks earlier than last year, so more of it landed in the third quarter.
The fourth quarter gets less. Expedia expects bookings to grow 3.3% to 5.2%.
How the discount gets in. The other side of that marketplace is the hotel. Expedia's sales run as campaigns that a hotel joins in Partner Central, and a campaign, in Expedia's own documentation, comes with "a preset minimum discount and travel/booking dates." For its September sale in 2023, Expedia asked for at least 10% off plus a further 10% for members. Its Black Friday page asks for 20% plus 10% for members, and offers "prioritized visibility" in return.
Expedia hasn't published this year's terms. The structure is the same every time: the hotel sets the deeper rate, Expedia sells it as its sale.
More nights, slower rates. The average rate Expedia booked rose 2% in the third quarter, to $215. In the first quarter it rose 7%, in the second 5%. Andersen told analysts he expects rate growth to keep moderating. So the nights grew faster than the price of each one.
The resellers ran promotions too. Bookings in Expedia's B2B business, the side that sells your rooms through banks, airlines and other companies' apps, grew 19%, against 7% on Expedia's own sites. Expedia's presentation credits part of that to "elevated marketing activity at some of the largest partners." Those partners' promotions started a year ago, so in the fourth quarter Expedia laps them, and B2B growth slows.
The catch. Expedia gave no hotel figure for the sale. The $1 billion is total bookings, not hotel rooms alone. The discount terms we can document are from earlier years. Part of the slower rate growth may be mix: room nights outside the US and Europe grew by mid-teens, against low single digits in Europe. And every number here is Expedia's own.
What it means for hotels. Black Friday is the next campaign, and on Expedia's own page it asks for a deeper discount than September did. Before you join it, open your September sale bookings and sort them by stay date. Look at whether they filled dates you would have struggled to sell, or dates that were already filling at full rate. Then check your direct bookings for the same dates. If those fell while the sale bookings came in, the discount moved your guest from your website to Expedia's, at your expense.
Read also: Expedia's different bet
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