Expedia Group B2B revenue jumps 18% in Q3, far outpacing B2C

Expedia Group’s B2B business — which powers travel distribution for more than 60,000 partners including Walmart Plus Travel, Chase Travel, United Airlines and Mastercard as well as corporate and offline travel agencies — was the main driver of revenue growth for the company in the third quarter this year.

Total revenue was $4.1 billion in the quarter, up 3% year over year, but revenue for the B2B business was up 18% in the period, hitting $1.2 billion, and B2B gross bookings increased 19% in the quarter compared to last year.

In 2023 Expedia Group’s B2B business accounted for 100 million room nights, and CEO Ariane Gorin expressed optimism about future growth potential in a call with analysts to discuss the Q3 results.

“The B2B business has a massive market,” she said. “The last set of quarters it’s grown at a very elevated rate. Some of that was Asia that was really coming back. … We believe in this business, we believe it will continue to be healthy, double-digit rates.”

New B2B partners for Expedia Group include Canadian Imperial Bank of Commerce and Microsoft, which has linked its loyalty program with Expedia for bookings on Bing Travel.

Expedia Group's consumer business

While gross booking growth year over year was much less for its B2C business – coming in at 3% - Gorin said the consumer business has been improving every quarter this year.

“We accelerated gross bookings in our consumer business for the second straight quarter driven by continued strength in brand Expedia, Vrbo returning to growth and good results in international points of sale,” Gorin said.

She also talked about a focus on integrations between brand Expedia and Vrbo – the company has moved about one million units that had been listed on Expedia to Vrbo, giving the vacation rental platform more inventory in urban areas and suited for shorter stays to appeal to a wider audience.

“We’re meaningfully improving the Vrbo app performance, making the app faster and adding new features to streamline shopping. … we have improved the quality of our existing supply with more discounts for long stays and more flexible cancellation policies,” Gorin said.

“We believe our focus on the basics — traffic, our product and our supply — will continue to drive positive momentum for Vrbo.”

When asked if the company will make vacation rental inventory available to its B2B partners, Gorin said that is already happening on a small scale, and is an opportunity but not a priority right now.

“As you can imagine, selling vacation rentals there is some complexity that is different than hotels,” she said.

“Communications between travelers and owner, for example. ... We are testing it. We want to be able to deliver a great traveler experience to our B2B partners and to our hosts and owners. So I do see that as an opportunity in the long term.”

Gorin also provided an update on the company’s work with artificial intelligence and how it is helping travelers, such as by answering questions about properties and summarizing reviews.

“We’re continuing to leverage AI to allow travelers to self-serve, which both lowers costs and improve the traveler experience,” she said.

“For instance our virtual agents now handle nearly half of all traveler inquires through self-service. Additionally our agent co-pilot feature, which summarizes voice and chat interactions, significantly reduces after-call work for our call center agents.”

Other financial figures

Expedia Group’s adjusted EBITDA in Q3 was $1.25 billion, up 3% year over year. Direct sales and marketing expenses in the quarter were $1.9 billion, up 11%, which the company said was due primarily to higher commissions to partners from growth in the B2B business. 

Looking ahead, Expedia Group said the strong results in Q3 has caused it to raised its full year guidance.

“We now expect gross bookings growth to be approximately 5% versus last year, up one point relative to our prior outlook,” said Julie Whalen, chief financial officer. 

“And we now expect our EBITDA and EBIT margins to be slightly up versus last year, an improvement from our prior outlook of flat levels. And our revenue guidance remains at approximately 6% growth versus last year.”

Along with the earnings results, Expedia Group announced Thursday that Whalen will step down from her role early next year. Whalen has agreed to remain with the company through February 17 and her successor is expected to be named before then. She has also resigned as a member of the company’s board of directors, effective immediately.

“I want to thank Julie for all she has done for Expedia Group as a board member and as CFO over the last five years. We are grateful for her contributions,” Gorin said.