Expedia Inc reported first quarter 2016 earnings, saying its recent acquisitions (AirAsia Expedia, HomeAway, Orbitz, and Travelocity) added 22 points of gross bookings growth and 28 points of revenue growth, compared to the year-earlier period.
The travel behemoth grew its total revenue by 39% in the first three months of the year, to $1.9 billion, slightly above previously announced expectations.
But the company’s expenditures surged to $2 billion, overtaking its growth and sending it into a $102 million operating loss. The company said acquisitions contributed "approximately 28 percentage points of inorganic adjusted cost of revenue growth" for the quarter.
Despite the loss, the company's stock was up significantly in after-hours trading, with the market presumably liking the overall trajectory for the company.
Some key points from the company's call with investors:
Expedia Inc is in discussions with the management team at Trivago, the metasearch company it has part-ownership of, to see if it will buy more shares. Trivago visits are up 70% on a year-over-year basis, and revenue was up 48% year-over-year. In Europe, it is continuing to experiment with "assisted booking", its answer to TripAdvisor's instant booking functionality.
Flagship brand Expedia said "thousands" of hotels are participating in its new Accelerator program, which lets hotels that meet certain criteria pay extra to appear higher in sort order in Expedia search.
The company acknowledged rumors that some of the recent declines in traffic at HomeAway were due to snafus within the company that unintentionally blocked Google from crawling the site. Chief executive Dara Khosrowshahi said some of the SEO issues are structural, leading to search results moving down Google's pages, while some of the SEO issues are ones that the brand's engineers believe can be worked around. In the meantime, the company had to offset the lost traffic via steeply increased direct marketing spending.
Also today Expedia Inc announced that HomeAway will revamp its subscription pricing for US owners.
Khosrowshahi said it is seeing encouraging trends in consumer demand for alternative lodging sold via its Expedia and Hotels.com brands. He plans to weave the alternative lodging across all of the company's brands.
Egencia, the company's corporate travel arm, has been expanding its scope beyond small-to-medium sized businesses to serve larger companies. Orbitz for Business customers will be rolled over onto the Egencia platform throughout the year.