Hotel room nights climb 7% as international demand and partner bookings drive gains
Aug 12, 2025
Expedia Group raised its full-year 2025 guidance after a strong second quarter driven by B2B growth, advertising revenue, and international bookings. Despite softer U.S. demand, the company outperformed expectations, expanded its partnership with Southwest Airlines, and continued to invest heavily in AI to improve customer experience and conversion rates. Shares jumped more than 15% in after-hours trading.
Key takeaways
- Upgraded 2025 guidance: Gross bookings and revenue now expected to grow 3–5% (up from 2–4%); EBITDA margin expansion target increased to 100 basis points from 75–100.
- Strong Q2 performance: B2B revenue up 17%, advertising up 19%, and room nights up 7% year-over-year to 105.5 million.
- Southwest Airlines partnership success: Expedia bookings account for 5% of Southwest’s passenger volumes since launch in February, bringing new customers to both companies.
- International momentum: Bookings outside the U.S. grew by high single digits, with Brand Expedia up 13%; strong growth in the UK, Northern Europe, and Asia (B2B Asia up 30%).
- U.S. softness offset: Weaker domestic demand was balanced by international growth and resilient high-end consumers.
- AI-driven improvements: AI filters boosted search relevance and conversions; personalized insurance offers drove record attach rates; AI-enhanced customer service achieved record Net Promoter Scores.
- Balanced portfolio: Mix of consumer brands (Expedia, Hotels.com, Vrbo) and global B2B partnerships provides diversification and resilience.
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