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Expedia (EXPE) reported worse-than-expected first-quarter earnings on Thursday, the latest discouraging sign for the American travel industry.
The travel platform also lowered its full-year outlook, citing weak U.S. demand. Expedia’s stock fell by 8% on Friday morning.
The company reported revenue of $2.99 billion on $31.45 billion in total bookings. Both figures were up year-over-year but below what analysts had predicted. Its net loss per share was $1.56, more than triple the $0.42 that analysts expected, according to Yahoo Finance.
CEO Ariane Gorin said on the company’s earnings call that demand was weaker than expected in the first quarter — and continued that way in April — due to poor consumer sentiment amid tariff-fueled economic uncertainty. She noted that more European customers seem to be traveling to places like Latin America rather than the U.S.
It’s the latest troubling sign for the U.S. travel and tourism industry. Airbnb (ABNB) issued a disappointing second-quarter revenue forecast last week, citing “broader economic uncertainties” for potential travelers. The company added that fewer Canadians were traveling to the U.S.
The travel and tourism industry, which accounts for about 3% of the U.S. GDP, has long been one of the economy’s most robust sectors. The U.S. posted a trade surplus in travel every year this century until this year.
The U.S. Travel Association says the United States is now running an annual travel trade deficit of $50 billion, compared with a $3.5 billion surplus in 2022.
“This presumably reflects increased hostility by many foreigners to the U.S., as well as fear of harassment by ICE officers,” Dean Baker, senior economist for the Center for Economic and Policy Research, wrote in a note reviewing the first-quarter GDP numbers. “We will likely see further declines in future quarters, especially among students coming to study in the United States.”
The International Trade Association reported earlier this month that arrivals of non-citizens to the United States by plane declined by more than 11% since March 2024. Tourism Economics, a firm that tracks the hospitality industry, recently changed its forecast for foreign visitors to the U.S. to a 9.4% decline for the year, after projecting a 9% increase back in December.
The firm estimates that international visitor spending in the United States will slide 5% as a result, a loss of $9 billion this year.
—Catherine Arnst contributed to this report.
