OTA stocks bounce back

After a dip driven by weak February traffic and economic concerns, OTA stocks rebounded as Q1 2025 earnings beat expectations across the board

Despite Expedia’s specific struggles - tied to its heavier U.S. dependence and slower global diversification - the broader OTA sector demonstrated resilient business models and strategic adaptability. Most firms beat EBITDA forecasts, reaffirmed or modestly adjusted guidance, and introduced long-term growth initiatives, calming investor concerns about soft U.S. travel demand and signaling confidence in global diversification and premium travel trends.

Key takeaways

• Earnings Surprise: All major OTAs beat Q1 EBITDA expectations. Most also exceeded revenue forecasts, reversing earlier stock declines driven by weak February traffic data and demand fears.
• Company highlights:
  • Airbnb: Maintains a cautiously optimistic outlook. While observing softness in U.S. bookings, it noted strong last-minute booking performance and a projected $1B+ revenue opportunity from new services.
  • Booking Holdings: Slightly widened its guidance range at the low end but remains broadly positive.
  • TripAdvisor: Held steady on full-year guidance; expected to benefit from the Liberty TripAdvisor transaction and continued growth of Viator.
  • Expedia: Reported a 1.5% decline in B2C revenue and lowered full-year bookings guidance by 200bps. However, its EBITDA exceeded expectations due to strong cost management.
• Geographic trends: Weakness in U.S. inbound travel was offset by strong intra-European and Canadian outbound travel, highlighting the importance of geographic diversification in OTA portfolios.

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