In sharp contrast to some of the other public travel companies' earnings calls, Expedia Group raised its 2025 guidance after posting growth across performance metrics in the second quarter.
"Even as the U.S. travel market was tough in the first half of the year, we made tangible progress on our strategic priorities," said Expedia CEO Ariane Gorin.
In the second quarter, Expedia's booked room nights grew 7% compared to the second quarter of last year. Gross bookings also grew, increasing 5% year over year. Revenue is up 6% and operating income rose 8%, according to the company's earnings release.
For its full-year forecast, Expedia raised its gross bookings and revenue outlook by 1%, so the new projection is 3% to 5% growth for both metrics.
What's driving growth
Key business units are driving Expedia's growth — such as B2B, advertising and international performance — in Asia, Europe, the Middle East and Africa, Gorin said.
"We grew room nights mid-single digits in EMEA and mid-teens in the rest of the world, including nearly 20% in Asia," Gorin said.
She touted the success of Expedia's B2B and advertising business units.
"B2B bookings grew 17%, outpacing the market and delivering our 16th consecutive quarter of double-digit growth," she said. "Advertising revenue grew 19% with a record number of active partners and momentum across both sponsored listings and display ads."
Expedia Chief Financial Officer Scott Schenkel said the travel industry is facing headwinds due to the new U.S. tariff policies affecting consumer spending and travel behavior but added Expedia's business is powering through.
"The U.S. travel market experienced continued pressure on inbound travel with shorter booking windows and higher cancellations," he said. "Even with that backdrop, we believe our company grew faster than market in both air and hotel lines of business, while vacation rental room nights grew roughly in line with the market."
Expedia repurchased approximately 3.8 million shares of its stock for $627 million in the second quarter. Across the first two quarters, Expedia repurchased a total of 5.6 million shares for $957 million. At the end of the second quarter, Expedia has $2.3 billion remaining in its share repurchase program.
"Regarding capital allocation for the balance of 2025, we expect to continue repurchasing shares, roughly in line with levels over the last couple of years," Schenkel said.
Expedia is 'using AI everywhere'
On its recent earnings calls, Expedia executives have discussed ongoing and planned integrations of artificial intelligence, and its second-quarter earnings call was no different. Gorin credited AI tools for driving business for Expedia.
"We're continually improving the foundations of our user experience, like performance, scalability and configurability — basics that we know drive conversion and repeat [business]," Gorin said. "At the same time, we're using AI everywhere, leveraging our vast first-party data to create better, more personalized experiences."
Expedia continues to implement AI tools to improve efficiency and optimization internally, but Gorin said the company is also well aware of the rise in consumers using the technology to search, plan and even book travel.
"Traffic from GenAI searches are small but growing fast, and it's converting into bookings at higher rates than other traffic," she said. "We're working with all the large tech players — Google, OpenAI, Meta and Microsoft, to name a few — to make sure that our brands appear prominently and their value propositions are clearer. It's a fast-changing space and having the right integrations and partnerships enables us to stay ahead, all the while optimizing our own sites, apps tech and marketing for the future."