Online travel agency, Expedia Group Inc., has recently reported its first-quarter revenue that differs from analysts' original estimates. The group reported that its Vrbo short-term rental business is slowing for the second quarter in a row and that shares fell more than 3 percent in extended trading.
Sales came in at $2.61 billion, up from $2.51 billion a year earlier, the company said in a statement. Wall Street was looking for $2.69 billion, according to data compiled by Bloomberg. Revenue growth from Vrbo slowed to 14 percent. Last quarter it came in at 20 percent, which was the lowest rate for 2018.
Bellevue, Washington-based Expedia has been struggling to chase rivals Airbnb Inc. and Booking Holdings Inc. in the fast-growing and lucrative market for short-term rentals with its HomeAway and Vrbo services. The company has been investing to increase the profile of these two businesses, but Expedia still lags behind the roughly 6 million global listings in alternative accommodation that Airbnb and Booking each have.
Expedia said that Vrbo gross bookings totaled $4.16 billion, up 5 percent from a year earlier. That was roughly half the growth rate of the main online travel agency business. The company ended the first quarter with more than 1.1 million properties on its core lodging platform, including about 460,000 integrated listings on Vrbo.
In an attempt to catch up with rivals, Expedia is shaking up its short-term rental unit, starting by changing the name of the division from HomeAway to Vrbo, which has more name recognition in the U.S. Over the next year, Expedia will plow more resources into Vrbo, launching new websites in fresh markets and re-branding existing sites, the company said Thursday.
“Through a phased roll-out, we will gather the data we need to determine how to best introduce Vrbo to the world,” Chief Executive Officer Mark Okerstrom said in a statement.
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