The company had migrated its Vrbo brand to the Expedia platform along with the rollout of its consolidated loyalty program covering all three brands, in a bid to allow customers to book across nameplates under one platform.
While Expedia hoped for a profit boost from the re-platforming of Vrbo, it said the brand was seeing a slower rebound, which weighed on overall bookings.
“We had pulled back on Vrbo marketing in the second half of last year… And while we have been ramping that spend and the product has been improving, we have seen a slower-than-expected recovery,” outgoing CEO Peter Kern said.
At least seven brokerages cut their price targets on Expedia, with Piper Sandler downgrading the stock to “neutral” from “overweight”.
“The near-term growth trajectory is uncertain as the company struggles to sustainably improve growth and materially raise traffic at two of its core brands (Vrbo and Hotels.com),” Wedbush analysts said in a note.
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