On February 10 Expedia (NASDAQ: EXPE) announced financial results for the fourth quarter and full year ended December 31, 2015.
All figures below exclude eLong and include the impact from acquisitions, unless otherwise noted.
Key Highlights
· Room night growth accelerated to 39% year-over-year in the fourth quarter of 2015, with domestic and international room nights growing 33% and 47% year-over-year, respectively.
· Gross bookings increased 40% and revenue increased 29% year-over-year in the fourth quarter of 2015. Foreign exchange had a negative impact of 6 percentage points on gross bookings growth and 5 percentage points on revenue growth in the fourth quarter of 2015.
· For full year 2015, Expedia delivered $1.2 billion of Adjusted EBITDA(1) representing growth of 11% year-over year. The Paris terrorist attacks in November 2015 negatively impacted Adjusted EBITDA by an estimated $10 million to $15 million.
· On December 15, 2015, Expedia, Inc. completed its acquisition of HomeAway, Inc., including all of its brands, capping off a year in which Expedia completed a total of over $6 billion in strategic transactions.
Product & Services Detail (excluding eLong) – Fourth Quarter 2015
As a percentage of total worldwide revenue in the fourth quarter of 2015, hotel accounted for 67%, air accounted for 10%, advertising and media accounted for 8% and all other revenues accounted for the remaining 15%.
Hotel revenue increased 24% in the fourth quarter of 2015 on a 39% increase in room nights stayed driven by the inorganic impact of acquisitions as well as the healthy growth in Brand Expedia and Hotels.com, partially offset by an 11% decrease in revenue per room night. Revenue per room night decreased primarily due to deliberate margin reductions aimed at expanding the size and availability of the global hotel supply portfolio, an unfavorable foreign exchange translation impact, as well as increased promotional activities such as growing loyalty programs, partially offset by a favorable book-to-stay impact. Revenue per room night is expected to continue to decrease year-over-year in 2016.
Average daily room rates (“ADRs”) decreased 5% year-over-year in the fourth quarter of 2015, primarily due to an unfavorable foreign exchange translation impact. Acquisitions added approximately 14 percentage points of inorganic hotel revenue growth and 15 percentage points of room night growth for the quarter.
Air revenue increased 61% in the fourth quarter of 2015 on a 70% increase in air tickets sold, partially offset by a 5% decrease in revenue per ticket. Acquisitions added approximately 55 percentage points of inorganic air revenue growth and 48 percentage points of air ticket growth for the quarter.
Advertising and media revenue increased 22% in the fourth quarter of 2015 due to continued growth in Expedia® Media Solutions and trivago. All other revenue increased 37% in the fourth quarter of 2015 primarily on growth in car rental and travel insurance products.
Product & Services Detail (excluding eLong) – Full Year 2015
As a percentage of total worldwide annual revenue, hotel accounted for 69%, advertising and media accounted for 9%, air accounted for 8% and all other revenues accounted for the remaining 14%.
Hotel revenue increased 17% in 2015 on a 36% increase in room nights stayed driven by the inorganic impact of acquisitions as well as the healthy growth in Hotels.com and Brand Expedia, partially offset by a 14% decrease in revenue per room night. Revenue per room night decreased primarily due to deliberate margin reductions aimed at expanding the size and availability of the global hotel supply portfolio, an unfavorable foreign exchange impact, both in translation and in book-to-stay, as well as increased promotional activities such as growing loyalty programs. ADRs decreased 5% yearover-year in 2015, primarily due to an unfavorable foreign exchange translation impact. Acquisitions added approximately 7 percentage points of inorganic hotel revenue growth and 9 percentage points of room night growth for the year.
Air revenue increased 25% in 2015 on a 35% increase in air tickets sold, partially offset by a 7% decrease in revenue per ticket. Acquisitions added approximately 19 percentage points of inorganic air revenue growth and 16 percentage points of air ticket growth for the year.
Advertising and media revenue increased 20% in 2015 due to continued growth in Expedia Media Solutions and trivago. All other revenue increased 21% in 2015 primarily on growth in car rental and travel insurance products.
Recent Highlights
Core OTA
· Brand Expedia launched a local-language site in China, the brand’s 33rd country; Expedia Australia celebrated its 10th anniversary.
· Brand Expedia expanded its Expedia+ rewards “Travel with Points” option, which now enables members in Canada, Australia and New Zealand to redeem earned points toward merchant hotel purchases. Expedia won the award for World’s Leading Online Travel Agency at the 2015 World Travel Awards, and Glassdoor UK recognized Expedia as its #1 Best Place to Work in 2016.
· Hotels.com amassed nearly 20 million cumulative genuine guest reviews, verified as being written by guests that booked through the site and stayed at the properties.
· In the fourth quarter, activations of Hotels.com gift cards increased more than 230% year over year. Additionally, Hotels.com signed gift card partnership distribution agreements with Goyoda AB; Loyalty Source; Manna Group Scrip Company; SVM Global; SVM, LP; Tribit iVouchers and UnitedScrip.
· The Hotwire mobile app was named one of the “Best Apps for Booking Travel” by CNET and both the Expedia and Hotwire apps were named in the “Top 10 Best Car Rental Apps” for Android by AndroidHeadlines.
· Expedia added the car rental platform to its Windows phone app.
· EAN entered into agreements to power online hotel bookings for Hotelplan Suisse, one of the largest Swiss tour operators, and eSKY, one of Poland’s largest OTAs, and to provide technology solutions and access to global hotel content for Nirvana Travel and Tourism, a leading Abu Dhabi-based tour operator.
· Orbitz Rewards, with nearly 6 million members, celebrated its second anniversary and has saved loyalty members over $45 million since its launch.
Trivago
· trivago has remained on its strong growth track, growing its standalone revenue by 32% year-over-year in 2015, with foreign exchange negatively impacting the growth rate by 25 percentage points. At the same time, trivago has continued to invest profits from established markets into newer, growth markets. Markets outside of trivago’s 16 most mature European markets contributed approximately 48% of total revenue in 2015, compared with 14% two years ago.
· trivago has continued aggressive efforts to build direct relationships with hoteliers. Since launching the paid premium subscription of trivago Hotel Manager ‘PRO’ locally in 2015, trivago has on-boarded approximately 15,000 independent hoteliers in Europe alone.
Egencia
· As part of the larger Orbitz Worldwide integration project, Egencia successfully migrated its first Orbitz for Business customers to the Egencia technology platform.
· In addition, Egencia completed its migration of clients from VIA Egencia to the Egencia technology platform. The migration included four countries, four languages, more than 2,700 clients and €600 million in gross bookings. In January 2016, VIA Egencia rebranded to Egencia. Egencia expanded its global reach by launching a localized Egencia site in Singapore in December 2015 and announced plans to open and expand call centers in Europe, including locations in Lyon, Glasgow and Dublin.
HomeAway
· In December 2015, Expedia, Inc. completed its acquisition of HomeAway, Inc., including all of its brands.
Expedia, Inc.
· During the fourth quarter of 2015, Expedia added more than 18,000 directly contracted properties to its global supply portfolio, offset by the removal of nearly 20,000 indirect or third-party properties. Expedia hotel count now stands at approximately 269,000 properties available on Expedia, Inc. sites.
· Expedia, Inc. renewed supply agreements with a number of airlines, including Delta Air Lines and Hainan Airlines.
· Expedia, Inc. announced a connectivity partnership with SilverRail, to help power the company’s global entrance into the rail market in 2016.
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