Expedia Group on Friday withdrew its 2020 full-year financial guidance, citing uncertainty with travel trends due to the COVID-19 outbreak.
“As COVID-19 has rapidly spread from Asia to Europe and North America over the past few weeks, travel trends have continued to worsen. It remains difficult to predict how long this pandemic will persist, and given the lack of visibility on our trends we’ve decided to withdraw our 2020 guidance,” Chairman Barry Diller and Vice Chairman Peter Kern said in a statement.
Expedia stock was down as much as 9 percent Friday. Shares have fallen more than 40 percent in March alone, amid a larger stock market slump as companies face impact from the global coronavirus pandemic.
Expedia indicated in February that it expected a $30 million to $40 million impact on profits from the coronavirus outbreak, but that was before the novel coronavirus had reached a global scale. The Seattle-based company said today it expects negative impact from COVID-19 to be in excess of the previous estimate of $30 to $40 million.
One of Expedia’s biggest rivals, Booking Holdings, withdrew its previously issued guidance on Monday.
The travel industry has taken a blow as trips are restricted due to the outbreak. Delta, for example, said Friday it will cut its flights by 40 percent.
A search on Twitter shows hundreds of frustrated travelers angry with Expedia as they try to cancel trip bookings. The company has an FAQ page to help answer common questions.
@Expedia Hey Expedia, Ive been hung up multiple times after being on hold for over 2 hours and even when an agent did call me back they hung up on me. I need to speak to someone, cancel my Europe vacay and get a refund.
— Jessica Hernandez (@MsJHernandez31) March 13, 2020
Started a Twitter to get in touch with @Expedia. Apparently they can tweet but they can't answer the phone. #coronavirus
— Mackenzie (@Mackenz62509123) March 9, 2020
We thank you for your continued patience and sincerely apologize for the inconveniences caused by COVID-19. We will do our best to share updates with you as we learn more. https://t.co/0P8f0JmZKl pic.twitter.com/eUkPsPocmz
— Expedia (@Expedia) March 12, 2020
On an earnings call last month, Diller said the company’s adjusted EBITDA growth in 2020 would be in the “double-digits.” But now that projection seems less certain as travel is curbed due to COVID-19.
Earlier this week RBC Capital Markets analyst Mark Mahaney lowered estimates for Expedia Group’s key financial results, predicting a decline of 18 percent, or more than $470 million, in the company’s first quarter revenue vs. the same period last year.
The outbreak comes at an especially difficult time for Expedia Group: The company cut 3,000 jobs on Feb. 24, including 500 at its new Seattle waterfront headquarters, saying it had been “pursuing growth in an unhealthy and undisciplined way” and needed to refocus.
Here’s what Diller said about the outbreak on the February earnings call:
“Listen, it truly is an unknown. I know everybody’s asking about it. Look, you’ve got to believe it’s going to be contained. If it’s not contained, the entire world’s going to shut down. So all you can do is every day you read the news and react to it. I think anybody as an investor, unless you think this is going to be the end of life as we know it, who cares? Believe me — I don’t mean who cares. A lot of people are going to get sick. But really, this is an exogenous event. It will end. And frankly, no one should count it. All we’re trying to do is separate what we absolutely believe is the effect of the virus from our ongoing business, so we can prepare ourselves and make that ongoing business as strong as possible when this thing’s over.”
