((Automated translation by Reuters using machine learning and generative AI, please refer to the following disclaimer: https://bit.ly/rtrsauto)) (Adds stock movements in paragraph 3, and details from Expedia throughout) by Aishwarya Jain, Anshuman Tripathy and Doyinsola Oladipo
Airbnb ABNB.O and Expedia EXPE.O on Thursday joined the growing list of travel companies warning of the impact of the Middle East conflict on demand, as hostilities in the region enter their third month. Both companies reported higher-than-expected first-quarter revenue, but their quarterly forecasts show escalating geopolitical uncertainty is disrupting travel itineraries and leading to cancellations.
Expedia shares fell 8% in extended trading after announcing gross bookings forecasts for the current quarter below Wall Street estimates, while Airbnb, which expects a slowdown in bookings growth over the same period, fell by around 1.5%.
Tourism demand in the region fell sharply after the United States and Israel attacked Iran in late February, with the conflict escalating and leading to the closure of airspace over major tourist hubs, including Dubai, pushing airlines to suspend their connections.
Although some airlines have since resumed operations and peace negotiations are underway, international travelers remain cautious amid lingering fears of a resumption of conflict.
Airbnb said it had seen a rise in cancellations in Europe, the Middle East and Africa, as well as Asia-Pacific, joining rivals such as Booking Holdings BKNG.O and Marriott MAR.O that have also reported war-related disruptions.
The conflict weighed on nights booked in the first quarter in EMEA and is expected to continue to be a drag in the second half, the company added.
Expedia also reported cancellations in Europe and Asia, and said the Middle East represented about 2% of its business.
“The cancellations calmed down as we got closer to April, but it certainly had an impact,†Managing Director Ariane Gorin told Reuters in an interview.
IN NUMBERS
Airbnb expects the dispute to reduce its second-quarter growth in room nights and reserved seats by about 1 percentage point, a metric that counts both rooms and services booked on its platform.
However, the company raised its revenue growth forecast for 2026 to a rate of “between 10% and 15%” from “at least double-digit growth” previously, banking on strong travel demand and rising vacation rental prices in North America and the United Kingdom. Latin America. Analysts on average expect revenue growth of 12% over the year.
U.S. travel demand, which accounts for about 30% of Airbnb’s room nights, is starting to show signs of rebounding after a “K”-shaped market weighed on demand for economy and mid-range offerings, even as the high-end and luxury segments resisted well.
Separately, Seattle-based Expedia expects second-quarter gross bookings of $32.5 billion to $33.1 billion, the median value of which is slightly below analysts’ average estimate of $33 billion, according to data compiled by LSEG.
In the first quarter, however, Expedia’s gross bookings increased nearly 13% from a year earlier, driven by strong demand for international travel. Revenue growth has been faster outside the United States than at home, CEO Gorin said.
