EXPEDIA Group reported revenue in the first quarter that jumped 80 per cent, in line with analysts’ estimates, and signalled a strong summer travel season after 2 years of pent-up demand.

Revenue was US$2.25 billion in the first 3 months of the year, according to a statement from the Seattle-based company.

Expedia, which hosts reservations for traditional lodging like hotels and short-term rentals on its Vrbo platform, and provides access to pricing for airlines, hotels and car rental companies, reported gross bookings of US$24.4 billion, compared with analysts’ projections for US$24.5 billion. 

“As we have seen many times during Covid, this quarter was a tale of two stories,” said chief executive officer Peter Kern.

“There was early impact from Omicron left over from late last year, which faded as the turnaround in demand reached new highs since the start of Covid. While the war in Ukraine did slow some of the recovery in Europe, there too we see travel at new highs since the start of the pandemic.” 

Travel executives are betting that this summer will be one of the busiest yet as consumers excited to leave home will splurge on vacations -- potentially going further afield and venturing back into tourist hot spots.

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Some signs of strong demand are already emerging in the industry, with airlines such as United Airlines Holdings boosting capacity for transatlantic flights and Southwest Airlines saying they expect to be profitable for the remaining 3 quarters of the year, even with oil prices well over US$100 a barrel. 

“The pent up demand seems to be outweighing anything the market can throw at it and we’re feeling very good about a summer recovery that should be very robust,” Kern said on a call with analysts after the results.

The shares jumped about 4.2 per cent in extended trading after closing at US$174.81 in New York. They have declined about 3.3 per cent this year, compared with an 8.2 per cent decline for Airbnb and 8.6 per cent for Bookings Holdings.

The vision of one of the best summers on record was blurry in the beginning of the year — with the spread of the Omicron variant peaking in January and the start of the war in Ukraine a month later. Still, Kern said in a February interview that the highly contagious Covid-19 variant “burned bright and fast” and that the company has been able to adapt to new virus challenges.

Other travel executives have said that the war in Ukraine has not changed consumer behaviour outside of that region, a positive sign that tourism to Western Europe will remain strong this summer. Expedia gets 3 quarters of its revenue from the US and has limited exposure to Russia and Ukraine.  

The company has benefited from offering accommodations in hotels as well as alternative lodging through its Vrbo site, since people who can work from anywhere fled to remote short-term rentals during the pandemic. Now tourists are starting to return to traditional vacation hotspots like New York.

Expedia does not break out Vrbo’s performance, but Kern said demand remains above 2019 levels. Supply in top locations is already selling out, he added. Vrbo, which specialises in whole-home vacation rentals, is not planning to pivot into the urban market, where rival Airbnb is stronger.

“We’re sticking to our main product line here and what we know works,” he said.

Vacation homes are continuing to hold their ground as the most popular type of lodging after hotels, according to an April survey from Cowen analyst Kevin Kopelman. 

Expedia reported a loss of 47 US cents a share, excluding some costs, while analysts were predicting a loss of 43 cents. BLOOMBERG