BELLEVUE, Wash., July 31 /PRNewswire-FirstCall/ -- Expedia, Inc. (NASDAQ: EXPE) today announced financial results for its second quarter ended June 30,2008.
"Expedia extended its global leadership position in travel with its sixth consecutive quarter of double digit revenue growth," said Barry Diller, Expedia, Inc.´s Chairman and Senior Executive. "Despite an uncertain economic environment we intend to aggressively expand our worldwide reach, as evidenced by our acquisition of Virtual Tourist, a leading community of user-generated travel content, and our intended acquisition of Venere, a European agency lodging site."
"Against a backdrop of unprecedented oil prices and airline industry capacity reductions, Expedia employees continued to execute in the second quarter, delivering solid growth in bookings, revenue and OIBA," said Dara Khosrowshahi, Expedia, Inc.´s CEO and President. "With our advertising and media businesses and international sites now delivering over 40 percent of revenue, Expedia has meaningfully diversified its growth drivers, and established a strong foundation for long-term growth in free cash flow and shareholder value."
Gross Bookings & Revenue
Gross bookings increased 16% for the second quarter of 2008 compared with the second quarter of 2007. North America bookings increased 10%, Europe bookings increased 30% (19% excluding the net benefit from foreign exchange) and Other bookings (primarily Egencia™ and our Asia Pacific operations) increased 31%.
Revenue increased 15% for the second quarter, primarily driven by increased worldwide merchant hotel revenue and advertising and media revenue. North America revenue increased 10%, Europe revenue increased 28% (17% excluding foreign exchange) and Other revenue increased 36%.
Worldwide merchant hotel revenue increased 10% for the second quarter due to a 13% increase in room nights stayed, including rooms delivered as a component of packages, partially offset by a 2% decrease in revenue per room night. Revenue per night decreased due to a decline in hotel margins, partially offset by a 1% increase in average daily rates.
Worldwide air revenue increased 14% for the second quarter due to a 9% increase in revenue per air ticket and a 4% increase in air tickets sold.
Worldwide revenue from products and services other than merchant hotel and air (including advertising and media, car rentals, destination services, agency hotel and cruises) increased 31% for the second quarter due primarily to increased revenue from advertising and media and car rentals. Package revenue increased 4% from growth in international package gross bookings.
Revenue as a percentage of gross bookings ("revenue margin") was 13.40% for the second quarter, a decrease of 5 basis points. North America revenue margin decreased 2 basis points to 13.55%, Europe revenue margin decreased 26 basis points to 15.23%, and Other revenue margin increased 31 basis points to 8.70%.
Gross profit for the second quarter of 2008 was $626 million, an increase of 15% compared with the second quarter of 2007 due to increased revenue.
OIBA for the second quarter increased 9% to $204 million, driven primarily by higher revenue. Operating income increased 11% to $171 million primarily due to the same factors driving OIBA growth, as well as lower amortization and stock-based compensation as a percentage of revenue.
Adjusted net income for the second quarter increased $6 million compared to the prior year period driven by higher OIBA, partially offset by higher net interest expense. Net income was flat due to an increase in operating income being offset by a gain related to federal excise tax refunds in the prior year period and higher net interest expense.
-- Gross bookings from Expedia, Inc.´s international businesses were $1.88 billion in the second quarter, accounting for 32% of worldwide bookings, up from 28% in the prior year period. Revenue from international businesses was $269 million in the second quarter, or 34% of worldwide revenue, up from 30% in the prior year period.
-- Expedia expanded its global footprint with an agreement to purchase Venere™ SpA, a leading European online travel provider, which will expand Expedia´s European, Middle Eastern and African lodging footprint by over 10,000 properties, and offer hotel supplier partners an agency model booking option.
-- hotels.com launched its 42nd point of sale --http://japan.hotels.com/ -- in Japan, the world´s second largest travel market.
-- The TripAdvisor® Media Network continued its expansion with the acquisition of VirtualTourist®, a leader in user-generated travel content, and its affiliate OneTime®, a leader in travel booking comparison. With these acquisitions the TripAdvisor® Media Network now attracts nearly 32 million unique monthly visitors according to comScore Media Metrix (May 2008).
-- Expedia.com® and hotels.com® came to the aid of gas pump-weary travelers by offering a free $50 Gas Money Prepaid Mastercard®, for hotel stays of three or more nights booked this summer.
-- TripAdvisor® expanded its social media footprint with the launch of three leading travel applications (Cities I´ve Visited™, Local Picks™ and TravelerIQ™) on MySpace, the world´s most popular social network. In addition, lastminute.com announced an agreemen to feature branded TripAdvisor hotel reviews throughout its website.
-- Expedia® Corporate Travel launched its own distinct brand, Egencia™, recognizing the growth and scale of a business that has reached over $100 million in trailing twelve months revenue. Egencia also announced the acquisition of Synergi Global Travel Management, a Canadian travel management company, as well as the launch of several site features including hotel reviews, TripAdvisor City Guides and SeatGuru® flight seating content.
Content & Innovation
-- QuickConnect™, Expedia´s hotel connectivity solution for independent hotels and small to medium-sized hotel chains, has been adopted by over 1,000 hotels in more than 35 countries, facilitating an expansion of hotel inventory and rates on Expedia´s worldwide points of sale.
-- hotels.com unveiled its welcomerewards™ program, enabling travelers to earn one free hotel night stay for every ten nights booked through hotels.com, with no blackout dates or hotel restrictions.
-- hotels.com and TripAdvisor both launched applications for Apple´s new iPhone, enabling access to hotels.com content and booking capabilities and TripAdvisor´s Local Picks™ restaurant finder.
-- Hotwire® launched Trip Watcher, its latest cost-and time-saving travel planning tool. Trip Watcher tracks travelers´ specific trip itineraries over a 60-day range, finding the lowest available prices on hotels, airfares and car rentals and offering money saving options such as date flexibility and neighboring airports.
-- Expedia.com unveiled its 2nd annual Expedia Insiders´ Select® list of the world´s best hotels (http://www.expedia.com/insidersselect). With Insiders´ Select global travelers discover the best hotels among Expedia´s nearly 80,000 properties based on Traveler Opinions® postings, value ratings and Expedia´s experts.
Partner Services Group ("PSG")
-- Expedia continued to grow its European hotel base, adding 1,700 merchant hotel properties during the second quarter, including long-term, strategic agreements with Barcelo Hotels & Resorts and Sol Melia Hotels & Resorts, making these properties´ inventory available on Expedia® and hotels.com worldwide points of sale.
-- Expedia´s worldwide merchant hotel portfolio grew 23% to exceed 42,000 properties, including over 24,000 hotels in the Americas, nearly
-- Expedia reached a multi-year agreement with Budget Rent A Car System, Inc., adding Budget´s fleet inventory to the Expedia Preferred Rental Car Program on the company´s U.S. websites. Expedia also signed a long-term agreement with Jumeirah Hotels, a leading operator of luxury hotels in Dubai.
About Expedia, Inc.
Expedia, Inc. is the world´s leading online travel company, empowering business and leisure travelers with the tools and information they need to easily research, plan, book and experience travel. Expedia, Inc. also provides in-destination concierge service and activity desks for travelers.
The Expedia, Inc. portfolio of brands includes: Expedia.com®, hotels.com®, Hotwire®, Egencia™ (formerly Expedia Corporate Travel), TripAdvisor®, Expedia Local Expert™, Classic Vacations® and eLong™. Expedia, Inc.´s companies operate more than 60 global points of sale in more than 40 countries, with sites in North America, South America, Latin America, Europe, Middle East, Africa and Asia Pacific.