What a difference a pandemic can make in the fortunes of the sometimes-challenged Expedia Group vacation rental brand, Vrbo.
It was only in February when Expedia Group officials discussed “six months of somewhat disarray” in adding 765,000 Vrbo listings to the Expedia lodging platform, or spoke of “fairly muted” Vrbo trends in the fourth quarter of 2019. The legacy of a painful rebranding that delivered a search engine gut punch, and a transition to a new payments platform weighed down Vrbo last year.
But in a financial update Monday, Expedia Group said Vrbo “has been the largest contributor to the improved booking trends,” which saw gross bookings at the group moderate to being down 45 percent year-over-year in June. That’s an improvement from being 85 percent lower than the year-earlier baseline in April.
Speaking for Skift Forum Europe on June 30, Cyril Ranque, the president of Expedia Group’s travel partners group, said Vrbo “has tremendous brand equity in the U.S. and is doing incredibly well now for obvious reasons. It’s our star in our portfolio currently.”
Vrbo consists primarily of whole homes in resort or vacation areas, as opposed to apartments in urban settings, and that has proven to be an attractive booking preference for travelers looking to drive to a non-congested destinations.
So what some might have viewed as a weakness, Vrbo’s lack of penetration in urban destinations, has been turned into a strength as the U.S. and other countries remain mired to varying degrees in the Covid-19 crisis.
“Vrbo’s gross bookings, excluding cancellations, increased significantly year-over-year in May and June due to its strong inventory position in whole-home alternative accommodations in drive-to destinations, which has been one of the first segments of travel to recover,” the Expedia Group financial update stated.
A key question is whether Vrbo can maintain its momentum or whether it is a Covid-19-related blip that will fade when the virus does.
EXPEDIA TO EXCEED ITS INITIAL COST-REDUCTION ESTIMATE
Expedia said Monday it expects to achieve more than $500 million in annual run rate reductions after stating before the Covid-19 crisis that its goal was $300-$500 million. Layoffs, of course, contributed to the cost savings, and to a lesser extent so did eliminating some multifamily apartment brands.
The company has said it is looking for additional cost savings in areas such as headcount, real estate, Cloud, procurement, licensing, software development, and additional efficiencies in marketing spend.
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