The Seattle-based travel technology company Expedia announced on Thursday that CEO Peter Kern will step down in May after serving for four years, appointing Ariane Gorin, a long-time company executive currently serving as the president of Expedia for Business, as the next CEO.
Kern, aged 56, will remain vice chair and board member until May 13 to assist Gorin with the transition. Gorin, who has been with Expedia for 11 years, has also been appointed to the board.
Board Selection of Ariane Gorin as the Best CEO Candidate
Barry Diller, Expedia Group's chair and senior executive who expressed a strong desire for an internal candidate for the CEO role, said after a thorough search that the board concluded Ariane to be the best candidate.
Gorin increased its business-to-business revenue by 33% in 2023 compared to the previous year as the president of Expedia for Business. Her division provides advertising and travel technology to corporate clients. It operates travel booking websites for major brands like Walmart and American Express, growing faster than Expedia's larger consumer-focused retail business. Gorin joined Expedia in 2013 after holding leadership positions at Microsoft for 10 years.
Peter Kern's Legacy Amidst Pandemic
As the pandemic impacted the travel industry, the company's priority was to cut costs and endure. Expedia's board appointed Kern as CEO selected a new chief financial officer, and raised $3.2 billion in funding.
Expedia's stock rose by 3.3% at market close on Thursday but dropped by 13.2% after hours.
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Debate over Expedia's Strategic Direction
The change in leadership surprised the market and could signal a new challenge over Expedia's strategic direction, as per Bloomberg Intelligence analyst Kevin Tsao.
Under Kern's leadership, Expedia's revenue rebounded from a 57% decline in 2020, achieving record revenues in 2023's fiscal year.
Expedia announced an annual revenue of $12.8 billion on Thursday, marking a 10% increase from the previous year in 2023. In the fourth quarter, the primary driver of overall sales growth was the revenue from the company's business-to-business unit. However, reported gross bookings and room-night growth fell below Wall Street's expectations in the same period.
In 2020, the company's annual revenue dropped by 57% to $5.2 billion, compared to the $12 billion revenue from the previous year. However, Expedia hasn't experienced the same boost in travel demand as some of its competitors following the pandemic. The trend towards urban destinations and shorter stays hasn't favored Vrbo, Expedia's vacation rental brand, as much as it did Airbnb.
Tsao informed Bloomberg News that there's a shift from focusing on consolidation, cost-cutting, and transformation under Peter, who took charge during a challenging period and prioritized guiding the company through it. There's a potential transition towards a growth-oriented approach with Ariane, who has been dedicated to driving and expanding their B2B business.
As Expedia aims for more significant growth, it's also managing increased expenses. The company intends to allocate a record amount towards marketing to boost its presence in the consumer travel industry and compete more effectively with Airbnb and Booking.
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