Expedia, Inc. Reports First Quarter 2013 Results
Expedia, Inc. (NASDAQ: EXPE) announced financial results for the first quarter ended March 31, 2013.
BELLEVUE, Wash.—April 25, 2013—Expedia, Inc. (NASDAQ: EXPE) today announced financial results for the first quarter ended March 31, 2013.
• Room nights grew 28% year-over-year for the first quarter of 2013 driven by continued acceleration at Brand Expedia and healthy room night growth at Hotels.com, eLong, Expedia Affiliate Network and Egencia.
• Revenue grew 24% year-over-year for the first quarter of 2013 due to strong growth in the Americas, Europe and Asia-Pacific across most brands. Aided by strategic acquisitions, revenue growth in Europe during the first quarter of 2013 was more than five times the rate of growth in the first quarter of 2012.
• Expedia, Inc. celebrated several milestones during the first quarter of 2013 including: Brand Expedia successfully migrating significant traffic to its new package platform; continued progress on the global roll-out of the Expedia®Traveler Preference™ (ETP) program with almost 25,000 contracted hotels; as well as passing the 30 million mobile app download mark collectively across Expedia, Inc.’s leisure brands.
• Expedia, Inc. completed the acquisition of 61.6% of the fully-diluted equity of trivago™ GmbH, a leading hotel metasearch company, in March 2013. In addition, year to date, the company repurchased 2.0 million common shares for a total of $127 million.
Financial Summary & Operating Metrics (financial figures in $MMs except per share amounts)
Gross Bookings, Revenue & Revenue Margins
Gross bookings increased 16% (16% excluding foreign exchange) for the first quarter of 2013, primarily driven by a 28% increase in hotel room nights and a 9% increase in air tickets. The VIA Travel acquisition added approximately 4percentage points to year-over-year gross bookings growth for the first quarter of 2013.
For the first quarter of 2013, average daily room rates and average airfares were essentially flat year-over-year. Air tickets sold grew by 9% year-over-year primarily due to the VIA Travel acquisition. Domestic bookings increased 7% and international bookings increased 30% (30% excluding foreign exchange) for the first quarter of 2013. International bookings totaled $4.3 billion for the first quarter of 2013, accounting for 44% of worldwide bookings versus 39% in the prior year.
Revenue increased 24% (25% excluding foreign exchange) for the first quarter of 2013, primarily driven by an increase in hotel room nights stayed partially offset by a decrease in revenue per room night. Combined the VIA Travel and trivago acquisitions added approximately 5.5 percentage points to year-over-year revenue growth for the first quarter of 2013. Domestic revenue increased 16% and international revenue increased 36% (38% excluding foreign exchange) for the first quarter of 2013. International revenue equaled $454 million for the first quarter of 2013, representing 45% of worldwide revenue versus 41% in the prior year.
Revenue as a percentage of gross bookings (“revenue margin”) was 10.4% for the first quarter of 2013, an increase of 65basis points compared to the first quarter of 2012. The increase primarily relates to a favorable mix shift to our higher margin products, including hotel and metasearch, partially offset by mix shifts within our hotel product.
Product & Services Detail
As a percentage of total worldwide revenue in the first quarter of 2013, hotel accounted for 70%, air accounted for 10% and all other revenue sources, including hotel metasearch revenue, accounted for the remaining 20%.
Worldwide hotel revenue increased 24% for the first quarter of 2013 driven by a 28% increase in room nights stayed partially offset by a 3% 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 Asia-Pacific remains a significant component. This decline was partially offset by higher average daily rates in other regions.
Worldwide air revenue increased 14% for the first quarter of 2013 due primarily to a 9% increase in air tickets sold. The increase in ticket volume primarily relates to the VIA Travel acquisition. Revenue per ticket increased 5% primarily due to variable incentives from suppliers.
All other revenue (excluding hotel and air) increased 29% for the first quarter of 2013 through strong growth in corporate travel fees and hotel metasearch revenue.
• Expedia, Inc. completed the acquisition of 61.6% of the fully-diluted equity of trivago GmbH, a leading global hotel metasearch company based in Europe, paying approximately US$564 million in cash and agreeing to issue a total of 875,200 shares of Expedia, Inc. common stock over five years.
• Expedia.com Ltd. was named to The Sunday Times' list of ‘Best Companies to Work For,’ ranking 22nd out of nearly 900 businesses based in the UK. Expedia, Inc. took the top spot on O.C. Tanner’s list of ‘Coolest Companies to Work for in Seattle.’
• Expedia® Affiliate Network (EAN) signed agreements to power travel bookings for several new partners, including French flag carrier Air France; and Swiss International Air Lines, the national airline of Switzerland.
• Expedia®launched its 31st localized booking site, www.expedia.fi, giving consumers in Finland access to Expedia’s extensive selection of hotel and rental car offerings. Hotwire also extended its global footprint by launching localized sites in Mexico, www.hotwire.com/mx and Singapore, www.hotwire.com/sg/, giving local consumers access to Hotwire’s deeply discounted travel products and services.
• Expedia, Inc. signed an expanded partnership agreement with Kenya Airways to make the Nairobi-based airline’s content available on Expedia and Egencia points of sale in the US and Canada; as well as a new agreement to make Aerolineas Argentinas’ complete selection of schedules and fares available on Expedia, Egencia and Hotwire sites in North America and Europe.
Technology Platform Investment and Innovation
• Expedia.com initiated testing on a revamped homepage built with responsive-design technology. The new page marks the first major manifestation of the brand’s responsive-design strategy and features a simplified, search-based user interface intended to optimize usability across all devices.
• Egencia®and Concur established a global partnership through which the companies are connecting the corporate travel booking and expense management processes into one solution for mutual clients.
• Independent market research firm Harris Interactive named Expedia ‘Brand of the Year’ in the Online Travel Service category of its 2013 Brand Equity study, and Expedia.co.uk received the Favorite Online Booking Website designation at the Travel Weekly Global Awards. Hotels.com placed second on Byte Level Research’s ‘Best Global Websites’ list, coming in just behind Google and ahead of Facebook as the only travel brand to achieve a top five ranking; and was named the Top Travel Website in the UK by eDigitalResearch.
• Expedia® Media Solutions, the advertising sales division of Expedia, Inc. received the Digital Marketing “Best in Show” award at the 56th annual Adrian Awards competition for its successful Facebook FriendTrips™ campaign that ultimately expanded Expedia.com’s Facebook network to more than 1.5 million fans.
Worldwide Hotel Portfolio
• At quarter end, Expedia, Inc. global websites, including eLong, featured more than 205,000 bookable properties. Expedia, Inc. sites offer over 140,000 hotels in EMEA and APAC countries.
• Expedia, Inc. signed partnership agreements that include provisions allowing for distribution under the Expedia Traveler Preference (ETP) program with leading European hotel operator Accor as well as La Quinta, one of the largest operators of limited-service hotels in the US.
• An internal analysis of 2,400 participating suppliers conducted in Europe showed hotels transitioning into the ETP program experienced well over a 500 basis point increase in ETP standalone net room night growth versus production prior to joining the program. In addition, our data for hotels transacting under ETP agreements showed an approximate 50 / 50 split between customer preferences for Expedia Collect versus Hotel Collect for ETP standalone room nights and a rough mix of 75% Expedia Collect and 25% Hotel Collect between customer preferences when including packages and non-refundable room nights.
New Distribution Channels
• Expedia completed the global roll-out of its updated mobile app featuring robust mobile itinerary capability. The new app gives smartphone users access to real-time itinerary details for all flight, hotel, rental car, cruise, and destination service bookings made on Expedia-branded sites.
• Egencia extended its Flight Exchange feature to mobile, giving business travelers in the US the ability to quickly exchange their flight booking using a smartphone or tablet device.
• The Hotels.com mobile app was named the ‘Best Hotel Booking App’ in the Hotels & Resorts category by About.com, surpassing several other leading online travel companies to capture nearly half of the vote.