Online Travel Firms Show Post-Pandemic Boom Still Has Steam

In North America, where there were signs over the summer of slowing demand, Airbnb said bookings growth managed to improve during the third quarter after a slower start. Domestic travel continues to account for the vast majority of reservations in the region, it said, with non-urban destinations and larger group travel growing faster than ever.

Not every metric exceeded expectations: Airbnb’s net income for the third quarter was $1.37 billion, less than the $1.39 billion analysts expected. It attributed the miss to the recognition of certain non-cash tax expenses. It also warned that revenue growth in the first quarter of 2025 will suffer from an unflattering year-over-year comparison since 2024 was a leap year and Easter came earlier.

Airbnb also refined its 2024 Ebitda margin outlook to about 35.5% from the prior guidance of at least 35%, falling behind some analysts’ hopes for a higher number. The “door has been left open” for possible lower guidance on 2025 Ebitda margin on new services investment, said TD Cowen analyst Kevin Kopelman.

“The bulls would argue the investments are all for future growth as Airbnb looks to transform to a travel company bigger than just lodging,” wrote Conor Cunningham, a travel analyst at Melius Research. “The long-term use case sounds compelling, but Airbnb is now a classic story of near-term headwinds with long-term benefits, without really knowing, with leverage in margins turn.”

Meanwhile, Expedia’s third-quarter gross bookings were $27.5 billion, topping Wall Street’s estimates of $26.7 billion. Customers booked a total of 97.4 million nights on Expedia’s travel websites, which include Expedia.com, Hotels.com and the short-term rental marketplace Vrbo, also landing above analysts’ projections.

Expedia generates roughly two-thirds of its revenue in the US, making it a strong gauge of US discretionary spending and offering investors a clearer picture of the nation’s travel demand. Its rivals Airbnb and Booking rely on international markets for the majority of their sales. The three months ending September is typically the most lucrative quarter for the company because it’s when Americans take summer vacations and begin planning winter getaways.

Just months ago, Expedia Chief Executive Officer Ariane Gorin had warned travel demand would soften. The company had cut its full-year guidance twice before Thursday’s earnings report.

On Thursday’s earnings call, Gorin said demand was soft in July but picked back up as the quarter progressed, led by demand that was stronger abroad than in the US.

“We’ve moved back into faster-growing international markets, investing surgically, and are seeing promising results,” she said.

(Updates with Friday share moves in the fourth paragraph and analyst comments starting in the 12th paragraph.)

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