Double-digit growth in revenue and gross bookings year-over-year
highlighted an overall positive result from Expedia Group for the second quarter of
Gross bookings increased 13% to $25.9 billion compared to the
second quarter of 2017. Revenue increased 11% in that same period to $2.9
In a call with analysts to discuss the results, Expedia
Group CEO Mark Okerstrom says: “We delivered solid financial results while
continuing to push forward on several critical initiatives aligned with the
three strategic themes I outlined late last year: becoming more locally
relevant on a global basis, becoming more customer-centric and speeding up the
pace of execution and innovation.”
Similar to the first quarter of 2018, growth once again was
propelled by the company’s HomeAway vacation rental unit, with a 33% jump in
stayed property nights compared to the second quarter of 2017. HomeAway’s
adjusted EBIDTA nearly doubled compared to the second quarter of 2017, up 98% to
HomeAway now offers more than 1.7 million online bookable
listings, up about 100,000 since March 2018.
More than 800,000 of those listings are instantly bookable, and
Okerstrom says they “do expect the continued shift to instant bookability to be
a nice tailwind to conversion over time, further enhancing the HomeAway
Okerstrom says it is still in the “phase one” of
HomeAway, transitioning it from a business of offline listings to an e-commerce
business. Phase two, which could begin some time next year, will be focused on international
expansion and property acquisition, although Okerstrom noted that without
effort it has “acquired hundreds of thousands [of new listings] since the acquisition.”
Along with HomeAway, the company also attributes the growth
in gross bookings and revenue to Brand Expedia, Hotels.com and Expedia Partner
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When asked about the losses at Trivago, Okerstrom says: “They
are now taking a more balanced approach to tradeoffs between top-line growth
and profitability with more of a bent toward profitability than in the past.
Combined with easing comps, Trivago expects adjusted EBITDA results to improve
in the second half of the year.”
Overall across the group, stayed lodging room nights grew 12%.
Adjusted EBIDTA for the core OTA, Expedia.com, was $561
million for the second quarter of 2018 – up 16% compared to a year earlier.
With diverse brands across a variety of travel sectors,
Expedia Group reports lodging accounted for 69% of total worldwide revenue, advertising
and media accounted for 10%, air accounted for 8% and other revenue accounted
for the remaining 13%.
All of those categories experienced growth in the second
quarter except advertising and media, which was down 9%.
The company’s selling and marketing expenses increased 7%
compared to the second quarter of 2017, due to a $57 million increase in direct
costs including online and offline marketing expenses and a $37 million
increase in indirect costs.
“In terms of marketing efficiency, listen, there has been no
secret that some of the large players in the industry, ourselves included, have
been pulling back and I think cooling off on some of the auction heat that may
have been taking place previously,” Okerstrom says.
“From an Expedia Group perspective, the level of sophistication
that we’ve got now in terms of really applying some modern data science
techniques, leveraging a lot of the capabilities that we’ve got by moving a lot
of our data infrastructure up into the cloud has just allowed us to be a lot
smarter in the way that not only that we’re bidding for traffic but also in the
way that we’re able to really understand what traffic is incremental.”