Expedia Group raised its full-year outlook as well as its fourth-quarter projections in light of its third-quarter results exceeding expectations.
"The market was healthy in the quarter with an acceleration in the U.S. and continued strength in the rest of the world," CEO Ariane Gorin said on Expedia Group's recent earnings call. "We saw longer lengths of stay and longer booking windows, both signs of a stronger consumer."
Expedia grew hotel bookings by 12% and revenue by 9% in the third quarter. Both bookings and revenue were driven by the company's business-to-business activity, not business-to-consumer activity. B2B revenue grew 18% and B2B bookings had a 26% increase — the 17th consecutive quarter that B2B bookings saw a double-digit increase.
"In the third quarter, we grew booked room nights 11% and expanded our hotel share globally," Gorin said. "In the U.S., room nights were up high single digits, our fastest growth in over three years. Nights were up low double digits in India and high teens in the rest of the world, including over 20% in Asia."
Crediting recent initiatives like Expedia's flexible travel rewards program launched in October, Gorin said Hotels.com grew at its fastest pace in more than two years.
"That's really a function of the work we've done this year in relaunching the brand, adding product functionality and launching [the program], and it's really solidifying its value proposition as a hotel-only pure play," Gorin said.
She added that vacation-home booking platform VRBO grew room nights in the quarter and maintained or even grew market share in the U.S.
Expedia continued to invest in artificial intelligence across its internal and consumer-facing platforms.
"Since the beginning of the year, we've integrated AI into our products at key moments that matter — from AI filters to property Q&A, guest review summaries and our service agent, and these features are driving engagement and getting even more effective with time," Gorin said.
The company is also creating AI-powered tools for trip planning and searching and for advertising operations optimization. Gorin said AI is helping make ads more relevant and improving targeting and measurement.
"AI-driven search is transforming the way travelers discover and plan their trips," Gorin said. "We're moving fast and deliberately to ensure our brands show up wherever travelers are. We're making good progress on answer-engine optimization, even as traffic today remains small."
Scott Schenkel, chief financial officer of Expedia Group, was asked about how the government shutdown could affect the company's momentum through the end of the year. He said that while Expedia continues to observe how travel is affected by the shutdown, it's likely too late in the year to do much damage.
"As part of guidance, we always try and make sure that we are prepared for a dynamic environment and events like these," Schenkel said. "The market remains dynamic. And in the U.S., just to be clear, we haven't seen a change in trend yet. But we're watching very carefully, and this weekend will be a critical one as we head into that."
Looking ahead, Schenkel said Expedia Group is raising its fourth-quarter and full-year performance expectations. For the final quarter of 2025, the company projects bookings and revenue will grow by 6% to 8%. Adjusted earnings before interest, taxes, depreciation, and amortization is forecast to increase by about two points.
"For the full year, we expect gross bookings to be up approximately 7% and revenue up approximately 6% to 7% and EBITDA margins to be up approximately 2 points versus last year," Schenkel said.
As of press time, Expedia's stock was trading at $256.41 per share, up 38.3% year to date. The NASDAQ Composite was up 18.2% for the same period.