Expedia, Inc. Reports Fourth Quarter and Full Year 2012 Results
Gross bookings increased 16%for the year, primarily driven by a 27% increase in hotel room nights and a 7% increase in air tickets.
Expedia, Inc. today announced financial results for the fourth quarter and year ended December 31, 2012.
• Room nights grew a record 33% year-over-year driven by a second, consecutive quarter of acceleration across Europe, Asia-Pacific and the Americas. Domestic room nights increased 19% year-over-year representing the fastest growth rate in two years.
• Revenue growth accelerated throughout 2012 reaching 24% year-over-year by the fourth quarter of 2012; almost double the rate of growth for the first quarter 2012.
• Driven by strong top line performance, Adjusted EBITDA* increased 14% year-over-year as compared to fourthquarter 2011.
• For the year, Expedia, Inc. allocated nearly $730 million to share repurchases, acquisitions and dividends, including payment of a special dividend of $0.52 per common share in December 2012.
• As previously announced, Expedia, Inc. entered into a definitive agreement to acquire a fully-diluted 61.6% stake in trivago, a leading hotel metasearch company based in Dusseldorf, Germany, for approximately US$647 million using exchange rates as of January 31, 2013. Expedia expects the transaction to close during the first half of 2013.
Gross Bookings, Revenue & Revenue Margins
Gross bookings increased 19% (20% excluding foreign exchange) for the fourth quarter of 2012, primarily driven by a 33% increase in hotel room nights and a 12% increase in air tickets. The VIA Travel acquisition added approximately 4 percentage points to year-over-year gross bookings growth for the fourth quarter of 2012.
For the fourth quarter of 2012, average daily room rates declined 3%, and average airfares grew 2% year-over-year. Air tickets sold grew by 12% year-over-year primarily due to the VIA Travel acquisition. Domestic bookings increased 11% and international bookings increased 32% (33% excluding foreign exchange) for the fourth quarter of 2012. International bookings totaled $3.3 billion for the fourth quarter of 2012, accounting for 44% of worldwide bookings versus 40% in the prior year.
Gross bookings increased 16% (18% excluding foreign exchange) for the year, primarily driven by a 27% increase in hotel room nights and a 7% increase in air tickets. For 2012, average daily room rates declined 2%, and average airfares grew 4% year-over-year. Air tickets sold grew by 7% year-over-year primarily due to the VIA Travel acquisition. Domestic bookings increased 13% and international bookings increased 21% (25% excluding foreign exchange) for 2012. International bookings totaled $14.0 billion for the year, accounting for 41% of worldwide bookings versus 40% in the prior year.
Revenue increased 24% (24% excluding foreign exchange) for the fourth quarter of 2012, primarily driven by an increase in hotel room nights stayed partially offset by a decrease in revenue per room night. The VIA Travel acquisition added approximately 4 percentage points to year-over-year revenue growth for the fourth quarter of 2012. Domestic revenue increased 15% and international revenue increased 35% (34% excluding foreign exchange) for the fourth quarter of 2012.International revenue equaled $464 million for the fourth quarter of 2012, representing 48% of worldwide revenue versus 44% in the prior year.
Revenue increased 17% (19% excluding foreign exchange) for the year, primarily driven by an increase in hotel room nights stayed partially offset by a decrease in revenue per room night and revenue per ticket. Domestic revenue increased 14% and international revenue increased 21% (26% excluding foreign exchange) for 2012. International revenue equaled $1.8 billion for the year, representing 45% of worldwide revenue versus 43% in the prior year.
Revenue as a percentage of gross bookings (“revenue margin”) was 13.0% for the fourth quarter of 2012, an increase of 48 basis points compared to the fourth quarter of 2011. The increase primarily relates to a favorable mix shift to our higher margin products partially offset by mix shifts within our hotel product. Revenue margin totaled 11.9% for 2012, relatively consistent compared to 2011.
Product & Services Detail – Full Year 2012
As a percentage of total annual worldwide revenue, hotel accounted for 74%, air accounted for 8% and all other revenue sources accounted for the remaining 18%.
Worldwide hotel revenue increased 20% for 2012 driven by a 27% increase in room nights stayed partially offset by a 5% decrease in revenue per room night. Revenue per room night decreased primarily due to changes in our hotel product mix, of which mix shift to regions with lower hotel economics is becoming a significant component.
Worldwide air revenue decreased 8% for 2012 due primarily to a 14% decrease in revenue per ticket partially offset by a 7% increase in air tickets sold. The increase in ticket volume primarily relates to the VIA Travel acquisition. Revenue per ticket declined primarily due to lower net supplier economics partially offset by consumer and interline booking fees.
All other revenue (excluding hotel and air) increased 20% for 2012 through growth in revenue from corporate travel fees, advertising and insurance products.
• Expedia, Inc. signed a joint global agreement with British Airways, the United Kingdom’s largest international airline, and Iberia, Spain’s largest air transport group; in addition to partnership agreements with a number of international air carriers including Spirit Airlines, a leading ultra-low-cost carrier serving the United States, Caribbean, and Latin America; South African Airways, the national airline of South Africa; and LATAM Airlines Group, one of the largest airline groups in the world formed by an association between LAN Airlines and its affiliates, and TAM Airlines.
• Expedia® Affiliate Network (EAN) now powers travel bookings for Delta Air Lines, one of the world’s largest global airlines; and signed agreements with Avantrip, a Buenos Aires-based online and offline travel agency; Bringfido, an online travel review and booking site geared toward pet owners; and wholesale travel distributor World Travel Services.
• Hotwire® launched localized sites in Germany, www.hotwire.com/de, and Hong Kong, www.hotwire.com/hk, giving consumers in those countries access to Hotwire’s deeply discounted travel products and services. Carrentals.com, part of the Hotwire Group, also launched its first international point of sale in the United Kingdom. The Hotwire Group launched 11 international sites since beginning its international expansion in 2011.
• Egencia signed agreements to provide corporate travel management solutions to several notable companies, including Caradigm, a healthcare technology joint venture between GE Healthcare and Microsoft; Groupon, one of the world’s leading providers of daily deals; and big data software company, PROS.
• Expedia.ca reached $2 billion in gross bookings for the full year 2012 for the first time since the site launched in Canada in 2000.
Technology Platform Investment and Innovation
• Through further platform investments, Hotels.com improved its production speed up to 30% during 2012 as well as creating quicker release cycles leading to the launch of numerous new product improvements, such as customer selfservice tools and new payment types including PayPal, Alipay and installment payment options in Brazil.
• Egencia celebrated 10-years of service and innovation in the corporate travel space. During its first 10 years, Egencia served nearly 3 million travelers, booked almost 70 million room nights, handled over 13 million calls and established a presence in over 55 countries serving 4 million travelers in 10,000 client-companies across the globe.
• Expedia.com launched its “Find Your Story” Facebook app, giving Facebook users the opportunity to transform travel pictures into moving video that is instantly shareable with users’ Facebook and Twitter networks.
• Expedia.de announced an exclusive partnership in Germany with PAYBACK, Europe’s largest marketing and couponing platform, allowing consumers to earn PAYBACK rewards points when booking their travel on http://www.expedia.de and strengthening Expedia’s consumer brand proposition in a key European market.
• Expedia® Media Solutions, the advertising sales division of Expedia, generated impressive results for the fourth quarter, with 14% year-over-year growth to reach over $100 million in annual revenue. Additionally, Media Solutions, in partnership with comScore, released a proprietary study that examined consumers’ habits and behaviors on mobile devices, and then identified opportunities for marketers to leverage these insights in their own mobile marketing efforts.
Worldwide Hotel Portfolio
• At quarter end, Expedia, Inc. global websites, including eLong, featured almost 200,000 bookable properties, with over 140,000 hotels located in EMEA and APAC countries.
• In addition to announcing the anticipated majority investment in trivago, Expedia, Inc. also announced an investment in hotel metasearch engine, Room 77, joining a number of investors in a round of Series C financing.
• The Expedia Traveler Preference program continues to gain momentum among lodging suppliers worldwide. To date, nearly 20,000 hotels globally have signed on to participate and of those signed up, approximately one-third are currently transacting as part of the program on Brand Expedia and Hotels.com points of sale.
New Distribution Channels
• Expedia.com released an updated version of its popular mobile booking app for the iPhone and Android platform, now featuring flight content, giving users the ability to search and book flights on more than 200 airlines that are sold in the US. Expedia.com and Hotels.com also each launched mobile hotel booking apps for the Windows 8 platform.
• EyeforTravel’s Social Media & Mobile Awards in Asia recognized Hotels.com as a first runner up in the Best Mobile Solution and Best Mobile Strategy categories. Hotels.com also received the Bronze medal in the Best Consumer Event category from the Marketing Event Awards 2012.
• J.D. Power & Associates recognized Hotwire as a leader in customer satisfaction among the world’s top travel booking sites, marking the fourth occasion Hotwire has earned this distinction