Momentum has returned to the Expedia business after the online giant stumbled in the second quarter when it reported declines in most key metrics – a performance which sent it stock price tumbling. However, Expedia has rebounded with a much stronger third quarter, perhaps learning from its missteps, especially with TripAdvisor’s new meta-search bidding system.
“Room nights grew 20%year over year driven by eLong and Brand Expedia,” the company said in a statement.
“Revenue grew 17% due to growth in hotel room nights and advertising and media revenue.
“Brand Expedia, trivago and Hotels.com drove the revenue growth with trivago on track to grow its full-year revenue approximately 85% versus 2012.”
Adjusted net income increased 7% year on year to USD201 million.
Hotels accounted for 73% of Expedia worldwide revenue, air 7% and all other revenue sources, including advertising and media revenue, accounted for the remaining 20%.
While hotel revenue increased 11%, revenue per room night fell 7%.
This was “due to continued hotel mix shift to Asia-Pacific, efforts to expand our global supply portfolio, promotional activities such as couponing and growing our loyalty programs’ membership.”
“Worldwide air revenue increased 16% due to a 9% increase in revenue per ticket as well as a 7% increase in air tickets sold.
“All other revenue increased 44% through strong growth in advertising and media revenue generated by trivago.”
Selling and marketing costs grew 24% to USD621 million.
“We feel better about our recent trends after a difficult first half of the year,” said CEO Dara Khosrowshahi.
“Our core online travel agency business is transitioning from a deep investment phase into one where we can grow and scale, while at the same time, we continue to invest in earlier-stage businesses like Egencia, eLong and trivago, where the focus is more on top line growth and share gains than on near-term profits.
“The TripAdvisor channel has generally improved since the initial global transition to meta-search during the second quarter.
“Although we see the performance in this channel vary week by week and also by geography, our bidding models are improving and we’re generally regaining click share.
“It will still take some time for this to settle out, but we’re confident about our ability to compete effectively in the meta-search channel in general.”