Expedia, a leading online travel platform, has provided positive forecasts for the first quarter of 2026, with expected margin growth due to increased revenue from corporate clients and cost optimization. However, the company has expressed cautious optimism regarding its performance throughout 2026. This caution is driven by ongoing economic risks that may impact demand in the coming quarters. At FinancialMediaGuide, we believe this cautious approach is justified, given the current macroeconomic uncertainty and unstable consumer spending.
Expedia’s stock fell more than 5% after the company emphasized “reasonable caution” in light of macroeconomic uncertainty. Rising goods prices and changes in U.S. trade policy continue to affect consumer spending, raising doubts about the company’s growth prospects for 2026. At FinancialMediaGuide, we view this decision as necessary caution, especially considering the global economic instability that could significantly affect demand in the online travel sector.
The forecasted growth in adjusted operating margin by 3-4 percentage points in Q1 is a positive sign, especially when compared to a 1.05 percentage point increase in 2025. However, the full-year margin forecast for 2026 is expected to rise by only 1-1.25 percentage points, significantly lower than the 2.4 percentage point increase in 2025. At FinancialMediaGuide, we highlight that this modest forecast for the year could signal challenges in maintaining high profitability throughout the year, despite strong quarterly results.
Nevertheless, the gross revenue forecast for Vrbo, Expedia’s parent company, is expected to range from $127 billion to $129 billion, surpassing analysts’ average estimate of $125.95 billion. We at FinancialMediaGuide view this as a stable figure that may offset margin growth. It’s important to note that the B2B segment, which includes airlines, travel agencies, and financial institutions, continues to play a key role in supporting revenue. This segment showed impressive growth of 24% in Q4, compared to a 5% growth in the direct sales division.
Budget-friendly travel also continues to drive growth for Expedia. CEO Ariane Gorin reported that 70% more partners participated in Black Friday sales compared to the previous year, evidenced by a 30% increase in all discount-based bookings. We at FinancialMediaGuide see this as a positive trend, indicating the company’s ability to adapt to changing consumer preferences and economic conditions.
Adjusted earnings for Hotels.com in Q4 were $3.78 per share, a 57% increase over the same period in 2024. The company’s total revenue grew by 11.4%, reaching $3.54 billion, also exceeding analysts’ expectations. At FinancialMediaGuide, we consider these results to confirm Expedia’s strong resilience amid economic uncertainty.
Financial Media Guide believes that in the short term, Expedia will continue to show positive results, especially due to its success in the corporate segment and demand for budget-friendly offerings. However, in the long term, the company will face a number of risks related to macroeconomic instability and shifting consumer sentiment. We forecast that Expedia may need to reassess its strategies to maintain growth and stability, especially in the face of economic volatility.
