BELLEVUE, WA—May 1, 2014—Expedia, Inc. (NASDAQ: EXPE) today announced financial results for the first quarter ended March 31, 2014.
Room nights grew 24% year-over-year for the first quarter of 2014 with domestic room night growth of 20% accelerating from 18% growth in the fourth quarter of 2013.
Revenue increased 19% year-over-year for the first quarter of 2014 driven by growth in hotel, advertising and media as well as air ticket revenue. trivago® grew revenue more than 80% year-over-year for the quarter.
Brand Expedia® substantially completed the migration of the US Travelocity-branded website to the Expedia platform during the first quarter of 2014 and launched the Canadian site during the second quarter of 2014.
Year to date, Expedia, Inc. repurchased 1.7 million common shares for an aggregate purchase price of $122 million excluding transaction costs.
Gross Bookings, Revenue & Revenue Margins
For the first quarter of 2014, gross bookings increased 29% (29% excluding foreign exchange) primarily driven by air ticket and room night growth. Air ticket growth was driven by Brand Expedia including the Travelocity-branded US website. Room night growth was driven by Brand Expedia, Hotels.com and eLong.
For the first quarter of 2014, domestic gross bookings increased 35% and international gross bookings increased 21% (22% excluding foreign exchange). International bookings totaled $5.2 billion, accounting for 41% of worldwide bookings versus 44% in the prior year. The decrease in international gross bookings mix was primarily due to the inclusion of the Travelocity-branded US website which bolstered domestic gross bookings.
For the first quarter of 2014, revenue increased 19% (19% excluding foreign exchange) primarily driven by growth in hotel, advertising and media as well as air ticket revenue. trivago added approximately 4 percentage points of inorganic revenue growth for the quarter. Domestic revenue increased 15% and international revenue increased 23% (23% excluding foreign exchange) for the first quarter of 2014. International revenue equaled $559 million, representing 47% of worldwide revenue versus 45% in the first quarter of 2013.
Revenue as a percentage of gross bookings (“revenue margin”) was 9.5% for the first quarter of 2014, a decrease of 84 basis points compared to the first quarter of 2013. The decrease primarily relates to lower revenue per room night, the inclusion of the Travelocity-branded US website and the unfavorable timing impact of merchant hotel stays mainly due to Easter shifting from the first quarter of 2013 to the second quarter of 2014. These impacts were partially offset by mix shift to higher margin products, including advertising and media revenue.
Product & Services Detail
As a percentage of total worldwide revenue in the first quarter of 2014, hotel accounted for 66%, air accounted for 11%, advertising and media accounted for 8% and all other revenues accounted for the remaining 15%.
Hotel revenue increased 12% for the first quarter of 2014 driven by a 24% increase in room nights stayed driven by Brand Expedia (including the impact of the implementation of the Travelocity-branded US website) and Hotels.com, partially offset by a 10% decrease in revenue per room night. Revenue per room night decreased primarily due to efforts to expand the size and availability of the global hotel supply portfolio, including contracts signed as part of the Expedia® Traveler Preference™ (ETP) program, promotional activities such as growing loyalty programs and couponing, in addition to continued hotel mix shift to Asia-Pacific.
Air revenue increased 28% for the first quarter of 2014 due to a 30% increase in air tickets sold, offset by a 2% decrease in revenue per ticket.
Advertising and media revenue increased 116% for the first quarter of 2014 due primarily to the addition of trivago, which was acquired at the beginning of March 2013, in addition to revenue growth of 26% for Expedia Media Solutions.
All other revenue increased 14% for the first quarter of 2014 primarily on growth in our travel insurance and car rental products.
Recent Highlights
Global Presence
Media Lounge, the latest addition to the Expedia App for iPhone and iPod touch, was introduced in 25 countries; providing mobile customers the opportunity to download premium content from within the Expedia App.
Hotels.com launched its largest ever integrated brand campaign in North America with the introduction of the brand’s biggest fan, Captain Obvious™, as well as an updated tag line: “Hotels.com The Obvious Choice™.”
In France, Egencia renewed agreements with the oil and gas service company, Saipem and with the broadband terminals and energy solutions manufacturer, Sagemcom to provide business travel management services; Egencia also renewed agreements to power corporate travel management solutions for The University of Manchester, one of the UK’s leading research and teaching Universities; Egencia signed on new customer Steria Mummert Consulting GmbH, a German-based IT consulting and services firm as well as Brookfield Global Relocation Services, a provider of corporate and government relocation and assignment management services in North America.
Expedia Affiliate Network signed agreements to power online travel bookings for Ebates.com, a pioneer and leader of online cash back shopping located in San Francisco.
Technology Platform Investment and Innovation
Expedia.com debuted its most significant redesign to its homepage since 2002 adding fully responsive design and a simpler, more streamlined layout.
Hotels.com incorporated Qiwi Wallet – one of the most popular payment systems on the Russian Internet - into its Russian website.
Worldwide Supplier Portfolio
At quarter-end, Expedia, Inc. global websites including eLong featured more than 290,000 bookable properties. Expedia, Inc. sites offer over 225,000 hotels in EMEA and APAC countries.
Expedia Lodging Partner Services signed agreements that include provisions allowing for distribution under the Expedia Traveler Preference (ETP) program with leading global hospitality company, Hyatt, as well as Rotana Hotel Management Company, a hospitality leader in the Middle Eastern region. To date, more than 51,000 hotels globally have signed on to participate in the ETP program since launch.
Expedia, Inc. signed distribution agreements with several international carriers, including Japan's leading airline, All Nippon Airways (ANA); Jordan’s national carrier, Royal Jordanian Airlines which serves a 60-city global network; LIAT (1974) Ltd, a leading Caribbean airline serving the region for more than 50 years; and Africa’s first, pan-continental, low-cost airline, fastjet.
Expedia, Inc. signed a global strategic partnership agreement with Sixt rent a car providing Brand Expedia, Hotwire and CarRentals.com customers access to Sixt's rental fleet at more than 2,000 stations across more than 100 countries.
Brand Expedia’s cruise product line had its largest day ever for cabins booked and gross bookings driven by improving conversion rates across multiple traffic channels.
New Distribution Channels
Hotwire’s first-ever mobile exclusive promotion performed strongly throughout the first quarter of 2014 having a significant impact on app downloads pushing Hotwire’s mobile share of room nights to more than 30%.
Expedia, Inc. brands collectively achieved over 125 million cumulative mobile app downloads since launch, driven primarily by eLong, Hotels.com and Brand Expedia.
Brand Expedia and Citi, the world’s largest credit card issuer, announced an extended partnership to provide value to loyal travelers and card members through the Citi Premier Pass® / Expedia® card. In addition, Hotels.com signed numerous partnership agreements with major banks in Asia, such as Citibank in Thailand, Standard Chartered Bank in Indonesia, China Trust Banking Corporation (CBTC) in Taiwan and Lotte Card in Korea, enabling Hotels.com to promote customized deals to each bank’s respective customers.
The Hotels.com mobile app came out on top of eDigital’s Multichannel Benchmark results study in the UK; citing the app as having excellent range and depth of information across all channels.
