Expedia Group CEO Peter Kern told CNBC on Friday he’s not worried about customers abandoning actual travel for a virtual-reality alternative.
“I don’t see [the metaverse] as a competitive threat. We’re certainly, like everyone else in the world, sort of intrigued by it … but we’re pretty much about the ‘real-verse,'” Kern said in a “Squawk on the Street” interview.
Big names like Facebook-parent Meta have heralded the metaverse as the future, while a bevy of other companies from McDonald’s to Playboy plan to cash in on virtual reality. Real estate sales in the metaverse reached $501 million in 2021, and that’s expected to double this year.
But any activity in the metaverse still doesn’t compare to real travel, Kern said. “I don’t think the metaverse in my lifetime will ever make up for being in Paris, being in Rome, being in a national park. There’s just no replacement for that. Those experiences are what change our lives, and I don’t think that’s the same with a headset on on your couch.”
Expedia shares — up 10% year to date — gained more than 1% on Friday, the day after the company said it earned an adjusted $1.06 per share in the fourth quarter. That beat estimates but revenue was shy of expectations. Expedia said Covid-related impact on travel bookings was significant, but less severe and for a shorter duration due to omicron than prior variant waves.
Kern said that flight cancellations and lockdowns stunted travel demand in Q4, but that travel “will be fine,” especially as more people who stayed home throughout the pandemic plan trips and consumers start to accept the new normal of travel risks.
He acquiesced that while he might be wrong about the metaverse long term, he’s firm in his belief that customers won’t be trading away their passports for headsets anytime soon.
“Maybe I’ll be wrong. Maybe in 100 years we’ll all be batteries and sitting around with headsets on,” he said. “But I think for the foreseeable future, we feel pretty good about people wanting to be out in the world.”