• Room night growth accelerated to 28% year-over-year in the fourth quarter, with international and domestic room night growth accelerating to 30% and 25% year-over-year, respectively. Fourth quarter gross bookings increased 24% and revenue increased 18% year-over-year.
• Strong performance in the core business drove growth in Expedia (excluding eLong) Adjusted EBITDA of 13% in the fourth quarter and 18% for the full year, with consolidated (including eLong) Adjusted EBITDA(1) growth of 3% and 17% for the fourth quarter and full year 2014, respectively.
• Trivago completed 2014 with standalone revenue growth of 68% year-over-year on continued global expansion.
• During November 2014 Expedia, Inc. completed the acquisition of Wotif Group for total cash consideration of A$703 million ($612 million based on November 13, 2014 exchange rates).
• Subsequent to year end, Expedia, Inc. completed the acquisition of the Travelocity brand and related assets for $280 million.
• In 2014, Expedia, Inc. repurchased 7.0 million shares of its common stock for approximately $537 million excluding transaction costs.
Gross Bookings, Revenue & Revenue Margins
For the fourth quarter of 2014, gross bookings increased 24% (27% excluding foreign exchange) primarily driven by room night and air ticket growth. Room night growth was driven by Hotels.com, Brand Expedia and Travelocity. Air ticket growth was driven by Brand Expedia and Travelocity.
For the fourth quarter of 2014, domestic gross bookings increased 29% and international gross bookings increased 18% (25% excluding foreign exchange). International bookings totaled $4.9 billion, accounting for 43% of worldwide bookings versus 45% in the fourth quarter of 2013.
For 2014, gross bookings increased 28% (29% excluding foreign exchange) primarily driven by room night and air ticket growth. Acquisitions and eLong each did not have a meaningful impact on gross bookings growth for the full year 2014. Domestic bookings increased 34% and international bookings increased 20% (22% excluding foreign exchange). International bookings totaled $20.8 billion, accounting for 41% of worldwide bookings versus 44% in the prior year.
For the fourth quarter of 2014, revenue increased 18% (22% excluding foreign exchange) primarily driven by growth in hotel and advertising and media revenue. Excluding eLong, revenue increased 19% for the quarter. Domestic revenue increased 24% and international revenue increased 11% (20% excluding foreign exchange). International revenue equaled $628 million, representing 46% of worldwide revenue versus 49% in the fourth quarter of 2013.
For 2014, revenue increased 21% (21% excluding foreign exchange) primarily driven by growth in hotel and advertising and media revenue. eLong did not have a meaningful impact on revenue growth for the full year 2014. Domestic revenue increased 21% and international revenue increased 20% (21% excluding foreign exchange). International revenue equaled $2.7 billion, representing 47% of worldwide revenue, consistent with the prior year.
Revenue as a percentage of gross bookings (“revenue margin”) was 12.0% for the fourth quarter of 2014, a decrease of 66 basis points compared to the fourth quarter of 2013, primarily due to lower revenue per room night. For 2014, revenue margin totaled 11.4%, a decrease of 67 basis points compared to the prior year, primarily due to lower revenue per room night, partially offset by the growth in advertising and media revenue.
Product & Services Detail – Fourth Quarter 2014
As a percentage of total worldwide revenue in the fourth quarter of 2014, hotel accounted for 69%, advertising and media accounted for 9%, air accounted for 8% and all other revenues accounted for the remaining 14%.
Hotel revenue increased 15% in the fourth quarter of 2014 on a 28% increase in room nights stayed driven by Hotels.com, Brand Expedia and Travelocity, partially offset by a 10% decrease in revenue per room night.
Air revenue increased 18% in the fourth quarter of 2014 due to a 26% increase in air tickets sold, partially offset by a 6% decrease in revenue per ticket. Advertising and media revenue increased 38% in the fourth quarter of 2014 due to continued strong growth in trivago® and Expedia® Media Solutions. All other revenue increased 23% in the fourth quarter of 2014 primarily on growth in travel insurance and car rental products.
Product & Services Detail – Full Year 2014
As a percentage of total worldwide annual revenue, hotel accounted for 70%, advertising and media accounted for 8%, air accounted for 8% and all other revenues accounted for the remaining 14%.
Hotel revenue increased 18% in 2014 on a 26% increase in room nights stayed driven by Brand Expedia and Hotels.com, partially offset by a 6% decrease in revenue per room night. Revenue per room night decreased primarily due to the efforts to expand the size and availability of the global hotel supply portfolio as well as promotional activities such as growing loyalty programs. This decline was partially offset by a 2% increase in average daily rates for the year.
Air revenue increased 22% in 2014 due to a 28% increase in air tickets sold, partially offset by a 5% decrease in revenue per ticket. Advertising and media revenue increased 50% in 2014 due to strong growth in trivago and Expedia Media Solutions. All other revenue increased 19% in 2014 primarily on growth in travel insurance and car rental products.
Recent Highlights
Global Presence and Supply Portfolio
• At quarter-end, Expedia, Inc. global websites featured approximately 435,000 properties, including over 218,000 in China through eLong.
• Expedia, Inc. completed the acquisition of the Wotif Group including Asia-Pacific online travel brands Wotif.com®, lastminute.com.au®, travel.com.au, Asia Web Direct®, LateStays.com, GoDo.com.au and Arnold Travel Technology. Its multi-product portfolio focuses primarily on hotel and air, offering consumers more than 29,000 bookable properties in destinations around the world.
• In January 2015, Expedia, Inc. acquired Travelocity from Sabre Corporation for $280 million in cash. The acquisition follows the 2013 strategic marketing agreement between Expedia, Inc. and Travelocity under which Expedia powered the technology platforms for Travelocity's US and Canadian websites along with providing Travelocity access to Expedia, Inc.'s supply and customer service program.
• Expedia, Inc. entered into commercial agreements with a number of airlines, including British Airways, Iberia, Aeroflot, Air Canada, Japan Airlines (JAL), Azul Brazilian Airlines, Air Tahiti Nui, and Canadian tour operators Transat Tours Canada and WestJet Vacations.
• Expedia® Affiliate Network (EAN) signed and launched agreements to power online hotel bookings for several international companies including Connexions Loyalty (Loyalty Travel Agency).
• Egencia signed $1.2 billion of new business and surpassed the $5 billion gross booking mark during 2014, a 2.5-fold increase in gross bookings versus 2010. For example, the UK market experienced 21% gross bookings growth for the full year by adding 150 clients.
Technology Innovation
• AirAsiaGo launched its new Chinese site (http://china.airasiago.com), allowing customers to pay in the Chinese Yuan. As an extension of the site, the team also unveiled a mobile website and app for AirAsiaGo China.
• Expedia Inc. brands continued advancements in mobile, with more than one in four transactions booked globally on a mobile device while Hotels.com® mobile traffic penetration exceeded 50% on peak days during the fourth quarter.
• Several brands added new features in mobile, including the ability to book car rentals on Hotwire’s Android app and the addition of Tripdeck® to Mobiata’s FlightTrack™ app, allowing travelers to easily track their flights in a simple itinerary, regardless of where they booked.
