Expedia, which operates Expedia-branded points of sale in Australia, New Zealand, Japan and India, plans to launch five to eight new country sites in Asia-Pacific in 2011.
Dara Khosrowshahi, the Expedia Inc. president and CEO, spoke about these expansion plans during a conference call Feb. 10 about the company's fourth quarter 2010 financial results.
Expedia Inc. also has a presence in China, through a controlling interest in eLong.
Khosrowshahi addressed numerous hot-button issues during the session.
Mobile
The team from Mobiata, which Expedia acquired in November 2010, has been "radically improving" Expedia's mobile products, Khosrowshahi said, adding he expects conversion rates on Expedia's mobile products to double in the next 18 months and to be on par with Expedia's Web conversions.
CFO Michael Adler said hotels.com's mobile products already produce conversion rates at a level similar to hotels.com conversions.
Google Places
While Google paid and organic search are "very significant" traffic drivers for Expedia's TripAdvisor, the removal of TripAdvisor links from Google Places has not had a big impact, Khosrowshahi said. He added that the impact has been greater in the U.S. than internationally, where TripAdvisor is growing at a double-digit clip.
American Airlines
Calling Expedia's dispute with American Airlines "a bump in the road," Khosrowshahi said "we're still trying to work that out." He acknowledged that the absence of American Airlines' flights on Expedia websites will have a short-term impact on fnancial results.
With a majority of Expedia Inc. hotel revenue being generated through direct-connects, Khosrowshahi was asked why Expedia wouldn't establish airline direct-connects, which is one of American Airlines' key demands.
He explained that Expedia built direct-connects from the ground up to build its merchant hotel program when there were no alternatives available. In contrast, Expedia gets just 12% of its revenue from selling airline tickets and wouldn't want to make the kind of investments which would be necessary for airline direct-connects, Khosrowshai said, adding that global distribution system model already works well.
Opaque hotel product
Khosrowshahi said Expedia plans on introducing an opaque hotel product in Europe in the second quarter of 2011.
Expedia.com and hotels.com performances
Khosrowshahi said room night growth for hotels.com hit 30% in January 2011, and he traced the performance to a platform migration completed in the first quarter of 2010 and accelerated work on the hotel path, including adding new features which increased conversions.
"In 2011, it's really off to a roaring start," he said, referring to hotels.com room-night growth.
In contrast, Expedia.com's results were mixed, Khosrowshai said, explaining that Scott Durchslag was brought in as Expedia Worldwide president to address the issues, and conversion improvements are expected in the next six to nine months.
Expedia.com's results were "lighter on the bottom line than we had planned" in the fourth quarter, CFO Adler said, adding that Winter storms were one factor impacting results.
TripAdvisor
Expedia's advertising and media revenue climbed 36% in 2010, propelled by a 48% jump in third-party revenue from TripAdvisor.
Khosrowshahi noted that 75% of TripAdvisor's global traffic comes from outside the U.S. Although the conversion rates are lower outside the U.S., the breadth of international traffic underscores TripAdvisor's enormous growth potential, he said, adding that TripAdvisor should be a $1 billion business within several years.
Meanwhile, TripAdvisor's Business Listings solution now includes 25,000 properties, with many of them small, independent properties in Europe, Khosrowshahi said. He said nearly one third of the properties signed up for Business Listings did not previously have a relationship with an online travel agency.
TripAdvisor's flight metasearch product is not nearly as lucrative as TripAdvisor's hotel business, Khosrowshahi said, but consumers like the air metasearch product, which enables Expedia to introduce travelers to TripAdvisor and upsell them.
Fourth quarter 2010
On the financial front, Expedia Inc. saw its net income decline 30% to $71.3 million in the fourth quarter of 2010 on $808.4 million in revenue, a 16% rise.
Global hotel room nights grew 15% in the fourth quarter to 18.8 million, and gross bookings increased 14% to $5.75 billion.