The pandemic has caused significant damage to travel giant Expedia, with travel restrictions imposed around the world, a 57% drop in revenue to $5.2 billion, and a 66% drop in total bookings to $36.7 billion in 2020.
The company posted losses in each quarter of 2020 after achieving three consecutive winning quarters in 2019, and its shares fell slightly after failing to reach analysts’ expectations for revenue (up to $920 million) and earnings (down to $2.64 per share) in the last holiday quarter, analysts had forecast revenue of $1.12 billion and earnings of -$1.97 per share.
The market value of Expedia reached $21 billion, but CEO Peter Kern indicated signs of hope after agreeing to start implementing vaccines, but the increasing cases of Covid-19 infections in addition to travel restrictions are still causing damage to the company’s business, as travel expenses in the United States decreased by 42% in 2020 to reach $ 679 billion, this sector has returned to growth after the general closure that was imposed in March last year, but it is still far from its normal levels as the pandemic continues.
The Expedia group includes major brands including: Vrbo, Orbitz, Hotwire, Trivago, Hotels.com, Egencia as well as the industry-leading website Expedia.com.
The company has responded to the economic and health crisis by raising about $3.2 billion in debt and common stock in April, and has also made additional cost cuts, including shutting down employees and reducing executives’ salaries, as the company’s share witnessed a collapse in March 2020, but it returned to its levels before the pandemic crisis, to be traded at about $149 per share.