Expedia Inc's 2015 Q1s were better than the market expected, with bosses also offering an update on how, where and when its tranche of recently acquired businesses will fit into the overall picture.
The market's favourite metrics were all positive - compared with the same period last year room night bookings were up 32%; gross bookings ahead 19% at nearly $15 billion with revenues up 14% at $1.4 billion.
A breakdown of the revenues shows that hotels represented around two-thirds (66%) of the business in the quarter. Air contributed 10%, advertising and media accounted for 9% and others - car, cruise, destination services - made up 15%.
The 32% lift in room nights increased hotel revenues in the quarter by 14%, but revenue per room night was down 14% with Expedia warning that the decline will continue throughout 2015.
It sold 18% more air tickets, lifting revenues from air by 9%, although the revenue per air ticket was down by 7%.
In the past six months or so Expedia has been on an acquisition spree. It's biggest deal - a $1.6 billion swoop on Orbitz Worldwide- is still going through the courts.
CEO Dara Khosrowshahi explained:
"The DOJ made a second request, and we're cooperating with them to make sure they have the information they need to enable them to complete their review by the end of the year."
However in the earnings call Q&A, he added that the integration of Orbitz, once the deal completes, would take some time.
"Orbitz is a complicated business with a lot of different lines. Some of the capabilities that the Orbitz business and team have are pretty impressive so I think we'll combine some of what they do really well with some of what we do really well. So I think that one will probably be a longer process, and it deserves to be a longer process. But first, we have to get there with the DOJ."
The integration of Travelocity - bought from Sabre for $280 million in January - was easier as Expedia had been powering the site since August 2013.
"What we're now doing is wiring up the marketing systems data, etc, so that the Travelocity team can work with the same analytical and marketing tool sets that we have available to our other brands."
This should be "largely complete within the month" with an increase in marketing spend on Travelocity to follow.
In Asia Pacific, Wotif Group - bought for $658 million last July - the integration was "a little bit better than expected" but some parts of the group, such as lastminute.com.au and Asia Web Direct, have not been fully migrated yet.
It's other APAC play is AAE Travel, set up as a joint venture with Air Asia but which Expedia spent $86m on in February to become the majority shareholder. Integration of this business into the Expedia Inc mothership is not mentioned.
This March Expedia stepped up its presence in Latin America spending $270 million on a 20% stake in Decolar Group, owner of the Decolar.com and Despegar.com online travel agencies. At the time Expedia talked about getting access to Decolar's Latin American hotel inventory.
The update here is that "Decolar has a great and growing supply base in Latin America, and we expect at some point here over the next year or so to start sharing inventory more actively."
So with five major acquisitions covering three distinct geographies, has Expedia finished its spending spree? Hardly.
"We will always be opportunistic from an acquisition standpoint," said Khosrowshahi.
And it is business travel where the next deal could take place. Expedia's corporate travel business Egencia had a subdued first quarter - gross bookings ahead 4% year-on-year at $1.4 billion revenues down 2% at $98 million.
"We definitely want to get bigger in the corporate travel segment, and we're doing so organically with Egencia...But we will continue to look for acquisitions in that segment. We think it's a terrific segment, and we have a great team and a great technology."
"In general, we are very happy with our portfolio, but the corporate development team will continue to sniff out opportunity and strike when they see one."
Click here to access the holding page on Expedia Inc's web site which includes links to the Q1s, a presentation for investors and a recording of the earnings call.
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