BELLEVUE, WA—February 6, 2014—Expedia, Inc. (NASDAQ: EXPE) today announced financial results for the fourth quarter and year ended December 31, 2013.
Room night growth accelerated sequentially to 25% year-over-year for the fourth quarter of 2013 with domestic room night growth improving to 18% year-over-year.
Revenue grew 18% year-over-year for the fourth quarter of 2013 due to growth in hotel room nights and advertising and media revenue. trivago®grew revenue more than 85% for the year adding approximately 4 percentage points to overall revenue growth for 2013.
Brand Expedia®launched hotel and air products on the Travelocity-branded US website during the fourth quarter of 2013 as part of a strategic marketing agreement signed with Travelocity in August 2013, and expects to complete the majority of the migration for the remaining products and the Canadian website during the first half of 2014.
The combination of healthy top line growth and leverage on fixed costs led to Adjusted EBITDA* improving 31% year-over-year as compared to fourth quarter 2012.
In 2013, Expedia, Inc. repurchased 9.3 million common shares for an aggregate purchase price of $515 million excluding transaction costs.
Gross Bookings, Revenue & Revenue Margins
For the fourth quarter of 2013, gross bookings increased 21% (21% excluding foreign exchange) primarily driven by room night growth at eLong, Brand Expedia and Hotels.com, and, to a lesser extent, an increase in air tickets.
For the fourth quarter of 2013, average daily room rates were essentially flat year-over-year while average airfares rose by 1%. Air tickets sold grew by 13% year-over-year primarily due to strong growth at Brand Expedia. Domestic bookings increased 19% and international bookings increased 24% (24% excluding foreign exchange) for the fourth quarter of 2013. International bookings totaled $4.1 billion for the fourth quarter of 2013, accounting for 45% of worldwide bookings versus 44% in the prior year.
For 2013, gross bookings increased 16% (16% excluding foreign exchange) primarily driven by an increase in hotel room nights and air tickets. For 2013, average daily room rates were essentially flat, and average airfares grew 1% year-overyear. Air tickets sold grew by 9% year-over-year due to growth at Brand Expedia and Egencia. Domestic bookings increased 11% and international bookings increased 24% (23% excluding foreign exchange) for 2013. International bookings totaled $17.3 billion for the year, accounting for 44% of worldwide bookings versus 41% in the prior year.
For the fourth quarter of 2013, revenue increased 18% (18% excluding foreign exchange) primarily driven by a 25% increase in hotel room nights stayed as well as advertising and media revenue, partially offset by a 9% decrease in revenue per room night. The trivago acquisition added approximately 4 percentage points to year-over-year revenue growth for the fourth quarter of 2013. Domestic revenue increased 14% and international revenue increased 23% (22% excluding foreign exchange) for the fourth quarter of 2013. International revenue equaled $569 million for the fourth quarter of 2013, representing 49% of worldwide revenue versus 48% in the prior year.
For 2013, revenue increased 18% (19% excluding foreign exchange) primarily driven by a 23% increase in hotel room nights stayed as well as advertising and media revenue, partially offset by a 7% decrease in revenue per room night. The trivago acquisition added approximately 4 percentage points to year-over-year revenue growth for the year. Domestic revenue increased 14% and international revenue increased 23% (23% excluding foreign exchange) for 2013. International revenue equaled $2.2 billion for the year, representing 47% of worldwide revenue versus 45% in the prior year.
Revenue as a percentage of gross bookings (“revenue margin”) was 12.7% for the fourth quarter of 2013, a decrease of 30 basis points compared to the fourth quarter of 2012. The decrease primarily relates to lower revenue per room night on our hotel product partially offset by a favorable mix shift to our higher margin products, including advertising and media revenue as well as hotel revenue. For the year, revenue margin totaled 12.1%, a 23 basis point increase versus 2012. The increase primarily relates to a favorable mix shift to our higher margin products, including hotel revenue as well as advertising and media revenue, partially offset by lower revenue per room night on our hotel product.
Product & Services Detail–Fourth Quarter 2013
As a percentage of total worldwide revenue in the fourth quarter of 2013, hotel accounted for 71%, air accounted for 8% and all other revenue sources, including advertising and media revenue, accounted for the remaining 21%.
Worldwide hotel revenue increased 14% for the fourth quarter of 2013 driven by a 25% increase in room nights stayed driven by eLong, Brand Expedia and Hotels.com, partially offset by a 9% decrease in revenue per room night. Revenue per room night decreased primarily due to efforts to expand inventory availability as well as our global supply portfolio, including contracts signed as part of our Expedia® Traveler Preference™ (ETP) program, promotional activities such as couponing and growing our loyalty programs’ membership in addition to continued hotel mix shift to Asia-Pacific.
Worldwide air revenue increased 17% for the fourth quarter of 2013 due to a 13% increase in air tickets sold and a 3% increase in revenue per ticket.
All other revenue (excluding hotel and air) increased 37% for the fourth quarter of 2013 primarily through strong growth in advertising and media revenue generated by trivago.
Product & Services Detail–Full Year 2013
As a percentage of total worldwide annual revenue, hotel accounted for 72%, air accounted for 8% and all other revenue sources, including advertising and media revenue, accounted for the remaining 20%.
Worldwide hotel revenue increased 15% for 2013 driven by a 23% increase in room nights stayed driven by eLong, Brand Expedia and Hotels.com, partially offset by a 7% decrease in revenue per room night. Revenue per room night decreased primarily due to efforts to expand inventory availability as well as our global supply portfolio, including contracts signed as part of our ETP program, continued hotel mix shift to Asia-Pacific and promotional activities such as couponing and growing our loyalty programs’ membership.
Worldwide air revenue increased 14% for 2013 due to a 9% increase in air tickets sold as well as a 4% increase in revenue per ticket.
All other revenue (excluding hotel and air) increased 37% for 2013 primarily through strong growth in advertising and media revenue generated by trivago.
Recent Highlights
Global Presence
Expedia, Inc. signed distribution agreements with several international carriers, including leading Chinese carrier Air China; Gulf Air, the national flag carrier of the Kingdom of Bahrain; and Chicago-based United Airlines, serving the world’s most comprehensive global route network.
Egencia signed agreements to power corporate travel management solutions for globally operating chemical company Fuchs Petrolub SE; GRAHAM, a U.K.-and Ireland-based construction, asset management and project investment company; the corporate business and group purchasing divisions of leading healthcare improvement company Premier, Inc.; Sage Software GmbH, leading global provider of business management software to small and mediumsized companies; SGS in North America, the world’s leading inspection, verification, testing and certification company; and SPIE, a leading European company in electrical, mechanical and HVAC engineering, energy and communication systems. In addition, Egencia showed continued growth in the German market with approximately 31% year-overyear growth in gross bookings, excluding foreign exchange, and 35% growth in transactions.
Egencia now offers corporate travel management services in 62 countries worldwide following the launch of Egencia.com.tr in Turkey, and through the expansion of the Egencia Global Alliance in Dominican Republic, El Salvador, Estonia, Latvia, Lithuania, and Panama.
Expedia Affiliate Network signed agreements to power online travel bookings for several international companies, including Logitravel.com, an online travel agency specializing in the sale of cruises, vacation packages and hotels; travel booking website OneTwoTrip; and Hungary-based low-cost airline Wizzair.
Technology Platform Investment and Innovation
Expedia launched several new features powered by big data and intended to simplify the travel shopping experience on its desktop and mobile websites. Flight Recommendations, the first tool of its kind from an online travel agency, applies insights to real-time customer search queries to offer travelers in the U.S. suggestions on alternative airports, travel dates and times; while Scratchpad neatly stores and organizes a consumer’s search queries for easy retrieval, helping users to make smart and informed travel decisions. Consumers who book travel on Expedia desktop and mobile websites can now also share their live itineraries and travel notifications with co-workers, friends and family members following the rollout of Itinerary Sharing.
Welcome Rewards®, the popular loyalty program from Hotels.com, achieved a major milestone of 10 million members since launching only five years earlier.
Expedia® Media Solutions, the advertising sales division of Expedia, Inc., generated 31% year-over-year revenue growth during the fourth quarter of 2013, exhibiting some of its strongest performance to-date.
Worldwide Hotel Portfolio
At quarter-end, Expedia, Inc. global websites, including eLong, featured more than 260,000 bookable properties. Expedia, Inc. sites offer almost 200,000 hotels in EMEA and APAC countries.
Expedia Lodging Partner Services signed partnership agreements that include provisions allowing for distribution under the Expedia Traveler Preference (ETP) program with a number of notable hotel brands, including major economy lodging provider G6, operating more than 1,100 Motel 6 and Studio 6 Extended Stay properties across the U.S. and Canada; InterContinental Hotels Group, one of the world’s leading hotel companies; and fully-integrated lifestyle hospitality company Morgans Hotel Group. To date, more than 45,000 hotels globally have signed on to participate in the ETP program since launch.
New Distribution Channels
Several Expedia, Inc. brands were recognized for their achievements in the online travel and mobile app development sectors. Brand Expedia was named the World’s Leading Online Travel Agency Website at the 20th-annual World Travel Awards. Hotels.com ranked first on the Keynote Lodging Performance Index for fastest online travel site search; received top honors in the Branded Content and Mobile Marketing categories at the Marketing Excellence Awards; and was recipient of Hospitality Sales and Marketing Association International’s (HSMAI) Gold Adrian Award for the Chinese International Travel Monitor campaign. Hotwire®took first place in the Online Travel Services and Travel Mobile Application categories at the 2013 Travel Weekly Magellan Awards, and received the designation of Best Travel Mobile Application at the 2013 Mobile Web Awards.
Hotels.com unveiled upgraded iPad and new Kindle Fire mobile apps, enabling consumers worldwide to search and book hotel accommodations, read guest reviews, and take advantage of mobile-exclusive deals directly from these devices. Hotwire also launched its first app on the Android platform.
Hotels.com signed a partnership agreement with popular road trip mobile app RoadNinja, whereby Hotels.com content is surfaced in a searchable and bookable interface to RoadNinja users looking for nearby accommodations.
