Massive Marketing Spend Drives Strong Expedia Result

Expedia Inc spent an extraordinary US$503 million on selling, marketing and advertising across its brands in the third quarter – 42% of revenue – driving year on year room night growth of 27% for the three months to September 30. For the first time more than half these rooms were sold outside the United States. Revenue was up 17%, the result impeded by a 3% fall in room rates, while the revenue margin shrank slightly to 13.2%.

The company said the 24% increase in selling and marketing expenses “was primarily driven by increases in online marketing spend at Hotels.com and Brand Expedia as well as higher affiliate marketing expenses at Expedia Affiliate Network and higher personnel expenses driven by addition headcount”.

Expedia also spent more on technology and content – up 27% over the previous year to US$121.7 million. Most of this went on extra staff “to support key technology projects”.

“As a percentage of  total worldwide revenue, hotel accounted for 77%, air 7% and all other revenue sources the remaining 16%,” the company said, adding that there had been strong growth in corporate travel fees and advertising revenue.

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