Expedia turns to HomeAway as direct-booking campaigns dent earnings

Expedia’s Q4 earnings missed projections as its stranglehold on the online hotel bookings landscape may be in jeopardy over the effectiveness of hotel direct-booking campaigns, though Expedia CEO Mark Okerstrom is reluctant to admit as much. 

Expedia reported $10.05 billion in revenue for the 2017 fiscal year, missing analyst projections of $10.11 billion. Expedia’s bookings increased 14 percent, or $2.4 billion, reaching $19.8 billion, but the company missed its forecasted revenue goal of $2.36 billion, recording $2.32 billion.

 Expedia missed its quarterly projections once again, but this time it may have more to do with spending than the weather. 

Expedia missed its quarterly projections once again, but this time it may have more to do with spending than the weather. 

Directly Limiting

Hotel companies' push for direct bookings may have had its initial detractors, but a 2017 report from Kalibri Labs, which analyzed the early days of the campaign, showed room night growth from May through Dec. 2016 was up 7.8 percent across 12,000 surveyed hotels, while net revenue for these properties also rose 9.3 percent. 

This data are not the only relevant facts to consider when looking at the impact of direct bookings. During Expedia's Q4 call, Okerstrom said the company's sort order for online searches is pushing bookings toward independent hotels. This could be attributed to Expedia's customers preferring to book by price. If independent hotels are appearing higher on Expedia’s searches, then it stands to reason that the better rates for branded hotels will be found through branded booking channels.

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