Expedia Feels the Impact of Declining U.S.-Bound Tourism

While Expedia Group met its financial expectations for the first quarter of 2025, the travel giant faced notable headwinds in its U.S. market performance, particularly in inbound tourism. A sharp 30% drop in bookings from Canada highlighted growing challenges, as consumer confidence faltered and international demand for the U.S. weakened.

According to Ariane Gorin, CEO of Expedia, diminished traveler sentiment weighed heavily on domestic demand, which typically makes up two-thirds of the company’s business. Overall, global demand for travel to the U.S. fell by 7%, with European travelers increasingly opting for destinations in Latin America over the United States.

In response to these trends, Expedia lowered its full-year forecast, now expecting 2% to 4% growth in both gross bookings and revenue. Still, Gorin remained cautiously optimistic. “People always want to travel, regardless of the economic environment,” she said.

Meanwhile, Booking Holdings, Expedia’s top rival, reported stronger global performance, especially in routes such as Canada-Mexico, benefitting from its lower reliance on the U.S. market.

Mixed Financial Results and Strategic Shifts

In Q1, Expedia’s revenue rose 3% year-over-year to $2.99 billion, and gross bookings increased 4%, totaling $31.45 billion. The company’s B2B segment stood out with a 14% revenue jump, driven by demand from the Asia-Pacific region. In contrast, the B2C segment — home to brands like Vrbo and Hotels.com — dipped by 2%.

Despite a 6% rise in hotel nights booked, Expedia posted a net loss of $200 million, up 49% from the previous year.

These results follow a 2024 restructuring that included a 4% reduction in staff and 7% fewer contractors. The company aims to streamline operations, cut costs, and reinvest in strategic initiatives. CFO Scott Schenkel said the changes are designed to boost efficiency and protect margins in a volatile environment.