Wotif.com – which Expedia bought for AUD703m last November – is still to hit stride under its new owner after transitioning to a new platform and user interface over the past couple of months.
“Wotif is not yet a meaningful contributor to the bottom line due to negative FX trends, purchase accounting adjustments and elimination of certain consumer booking fees,” Expedia CEO Dara Khosrowshahi told analysts this morning.
“However, we’re pleased to have broadened Australian consumers’ access to our global inventory.
“We’re seeing early positive conversion trends as a result of our integration programs and expect the business to contribute more to profitability as we move through 2015 and into next year.”
During the 13/14 Australian financial year Wotif made around AUD43m net profit, down 15% from the previous corresponding period.
He added that: “The migration of the Wotif site onto the Expedia platform is substantially complete, a process that has taken less than 6 months end to end.”
However Mr Khosrowshahi said the migration of other Wotif-owned online business such as lastminute.com.au and Asia Web Direct was still under way.
“So there is still some work ahead of us, although that work is also very much on a good track.”
Meanwhile, Expedia reported a 14% increase in revenue for the first quarter propelled by a 19% surge in the value of gross bookings.
Among its many properties hotel search engine Trivago was a standout, growing revenue by 43% to USD119m.
Meanwhile, Expedia’s proposed purchase of US rival Orbitz is still under examination by US regulators – and will be for some time yet.
The process may not be resolved until the end of this year, he said.