Expedia Says Half of Recent Vrbo Customers Were New

Skift grip

It seems that the non-stop commercials on television and on YouTube have achieved something. But Vrbo risks falling victim to its own successful marketing. Adding more vacation rental inventory to some locations is difficult.

Sean O’Neill

Yes Expedia Group Vrbo secretly wish it was another brand, Airbnb would it be. Vrbo has played second fiddle to its short-term rental rival, the word-of-mouth sensation. But Vrbo racked up some first-quarter marketing achievements worth bragging about — and it could catch the eye of rivals Airbnb and Booking.com.

“We see a lot of new customers coming to the product [Vrbo]“, Peter Kern, vice president and CEO of Expedia Group, during an earnings call Monday. “I think in the first quarter, about 50% of them were new customers.”

Vrbo generated bookings “above 2019 levels” during the quarter. One driver was a group marketing push – think brand marketing, like TV ads during cable TV news, and “performance marketing,” like buying ads to appear in Google paid search results.

“Our teams have done a great job promoting Vrbo and app downloads,” Kern said. “Vrbo, according to our third-party data from a company called detection towerwas the most downloaded application in North America in the first quarter of the year. »

Expedia Group spent only 6% less on direct sales and marketing in the first quarter than in the same period in 2019. Kern hinted that the group proportionally pushed its Vrbo brand more than most or all of its brands. during the quarter. If true, the group’s marketing spend on Vrbo may have been higher than two years ago.

The blitz won’t last forever, however.

“Our focus will change over the course of the year,” Kern said. “We will also push our other brands.”

Shortage of vacation rentals?

Vrbo’s sales are doing so well that the brand is running out of full vacation rentals to offer in popular non-urban leisure spots.

“We will definitely be selling many of our best locations for this summer,” Kern said.

“Yeah, we’re a little limited on supply,” Kern said. “We could definitely move more supply to our most in-demand markets.”

The group has teams scrambling to persuade vacation rental managers and owners to list their inventory on Vrbo.

The impact of the war in Ukraine has only been a blink of an eye so far

Expedia Group expected the post-pandemic recovery to continue broadly as planned.

The war in Ukraine impacted the group’s European markets. But not for long.

“The market – the consumers – seems to be absorbing this information, and now the EMEA [Europe, the Middle East, and Africa] is back to its highest levels since the covid hit,” Kern said.

“Overall, as we keep an eye on various macroeconomic indicators, including inflation and ongoing geopolitical tensions, we continue to see positive indicators for a strong recovery in leisure travel this summer,” said said Kern.

A quarter of a quasi-recovery

Expedia Group first quarter results underperformed its pre-pandemic figures on a few points. Its total revenue of $2.25 billion was down about 14% from the first quarter of 2019. But it was up 81% from the same period a year ago.

The group handled $24.4 billion in gross bookings, up 58% year-on-year but down 17% from the first quarter of 2019.

The group generated a loss of 122 million dollars in the first quarter. This, however, dampened the flow of losses. In the same period a year ago, it lost $606 million.

One of the takeaways from Monday’s earnings call was that the post-pandemic vacation rental boom has not waned with the lifting of restrictions on urban travel.

At first, the rental boom seemed driven by people’s interest in non-urban locations. Now the trend appears to be fueled by an increase in family and group gatherings. Or maybe rentals are popular simply because they’re becoming more widely known.

If awareness is the main driver, then perhaps Vrbo owes Airbnb a bit for popularizing the category.