While Expedia Group’s results in the first quarter of 2025 fell within its guidance range, the company felt a pinch as travel demand softened in the United States and inbound travel dipped, with bookings from Canada falling by almost 30%.

“U.S. demand was soft, driven by declining consumer sentiment, and we felt pressure on key inbound U.S. corridors,” Ariane Gorin, CEO of Expedia Group, said on the company’s call with financial analysts Thursday evening.

Scott Schenkel, chief financial officer of Expedia Group, spoke about the U.S. demand headwind, noting that two thirds of the company’s business comes from the U.S. point of sale and demand for inbound U.S. travel was down 7% overall.

At the same time, Gorin said they have seen some “rebalancing,” with Europeans traveling less to the U.S. but more to Latin America.

Considering headwinds, the company is adjusting expectations for the remainder of the year.

“As we consider the same factors for the full year, we are revising our guidance for gross bookings and revenue,” Schenkel said. “Our updated guidance is 2 to 4%.”

Still, Gorin remained optimistic about the company’s future.

“While none of us can predict with certainty how the economy will evolve, we do know that people always want to travel,” Gorin said. “I’m confident that we’re well positioned to continue delivering for our travelers, partners and shareholders, regardless of the demand environment.”

Booking Holdings, Expedia Group’s primary competitor, is less dependent on U.S. business and fared a bit better in Q1, reporting stable demand globally. While it saw a “moderation in trends” for inbound travel to the U.S., the company reported improvements in other corridors, specifically from Canada to Mexico.

Q1 2025 financial results

Expedia Group’s first quarter bookings and revenue were within their prior guidance range, thanks in part to the company’s B2B business which skews international and posted 14% bookings growth. Its advertising business also did well, posting 20% year over year growth in revenue.

“While in the last year we’ve made strides in growing our consumer business outside the U.S., our high U.S. mix resulted in 1% bookings growth for our consumer business,” Gorin said of its consumer businesses Expedia, Vrbo and Hotels.com.

Expedia Group saw a 6% rise in room nights booked in the first quarter versus the same period last year, increasing to 107.7 from 101.2 million.

“This is primarily driven by B2B, which grew 20% with strong international performance, particularly in APAC [Asia Pacific],” said Schenkel, who was named CFO in December.

Total gross bookings were up 4% in the first quarter, increasing to $31.45 billion from $30.16 billion in Q1 2024.

While none of us can predict with certainty how the economy will evolve, we do know that people always want to travel … I’m confident that we’re well positioned to continue delivering for our travelers, partners and shareholders, regardless of the demand environment.

Ariane Gorin, Expedia Group

Q1 revenue was $2.99 billion, a 3% increase compared to the same period last year. B2C revenue was down 2% year-over-year to roughly $1.96 billion and B2B revenue reached $947 million in the quarter, up 14%.

The first quarter net loss was $200 million, a 49% increase from $135 million in the same period in 2024, and adjusted EBITDA rose 16% to $296 million.

Expedia Group’s selling and marketing costs for the quarter totaled $1.76 billion, up 6% year-over-year.

The company’s B2B business has outpaced its B2C business in the past. When asked how Expedia Group might manage worsening macro headwinds, Gorin reiterated the strength of the B2B segment.

“We’ve got a very strong B2B business, which is quite diverse geographically,” Gorin said. “It’s diverse not only geographically but also by segment. So, it’s exposed to corporate travel, to leisure travel, to travel bundled with airlines … We sort of run the gamut of partners. It’s a profitable business. We tune the levers really well … Obviously, nobody can predict what’s going to happen, but that’s a really well-diversified business.

AI-powered Expedia Trip Matching

On the call, Gorin also announced that Expedia is launching a new artificial intelligence (AI)-powered tool for travelers.

“Today, we’re launching Expedia Trip Matching in early access on Instagram, allowing travelers to seamlessly build an itinerary based on an Instagram Reel and then book directly on Expedia,” Gorin said. “These innovative features, supported by our rich first-party data and coupled with our own marketplace, bring travelers back to our brand.”

Expedia users will be able to share any publicly available, travel-related Instagram Reel directly with Expedia, which will use the reel to generate customized itineraries, travel tips or destination ideas based on the video, the company said in a release.

The tool is currently available in beta and is expected to roll out to U.S. travelers in the coming weeks.

“It’s no secret people are getting their news, inspiration and travel ideas from influencers and content creators,” Jochen Koedijk, chief marketing officer of Expedia Group, said in the release. “We want to be where consumers get their inspiration, which is through social media.”

Gorin spoke in detail about her AI vision during the company’s Q4 2024 earnings call in February, reiterating Expedia’s interest during the latest call with analysts.

“AI is changing everything, and we see it as an accelerator across our business,” Gorin said.

Expedia restructuring

The company’s Q1 results come on the heels of restructuring news, which broke last week. In March, the company also conducted an unknown number of layoffs.

On the earnings call, Schenkel opened up about the restructuring, telling analysts that since last year, Expedia Group has restructured “approximately 4%” of its employees and reduced its contractor population by “about 7%.”

“In addition to the cost there, we also expect us to simplify our model, speed up our efforts and prioritize what we’re working on,” Schenkel said.

“We feel good about what we’ve done as it relates to the margin dynamics for the company. We do expect to reinvest some of those savings back into the company, somewhat in the form of lower cost locations and somewhat in strategic initiatives.”