Distribution Strategies

Expedia reported a higher-than-expected second quarter profit. The online travel company reported a profit of $114.3 million, compared with $40.9 million a year earlier.

Published: 30 Jul 2010

Expedia reported a higher-than-expected second quarter profit. The online travel company reported a profit of $114.3 million, compared with $40.9 million a year earlier.

Revenue rose eight percent to $834 million. It was primarily driven by an increase in advertising & media revenues and hotel revenues. Domestic revenue increased 9 percent while international revenue increased 8 percent.

Gross bookings increased 19 percent for the second quarter of 2010 compared with the second quarter of 2009, driven primarily by 10 percent growth in transactions and a 17 percent increase in average airfares. Domestic bookings increased 15 percent and international bookings increased 28 percent.

Revenue as a percentage of gross bookings (revenue margin) was 12.5 percent for the second quarter, a decrease of 121 basis points compared to the second quarter of 2009, due primarily to a higher mix of air bookings, which have a lower revenue margin than other products and services. The higher mix of air bookings is due in part to an increase in air ticket prices.

Gross bookings from Expedia, Inc.’s international businesses were $2.2 billion in the second quarter, accounting for 33 percent of worldwide bookings, up from 31 percent in the prior year period.

International revenues were $301 million, representing 36 percent of worldwide revenue, consistent with the prior year period. EMEA represents roughly one fourth and APAC approximately 5 percent of Expedia, Inc.’s worldwide business.