Expedia adjusts investment and spending
The economic turmoil has prompted Expedia to plan for further efficiencies following a drop in net profit for the three months ending September 30.
The figure was down by $5 million to $94.8 million year-on-year based on revenue up by 10%.
CEO and president Dara Khosrowshahi said: “Because the economic turmoil caused a broad pull back in travel spend in September and October, we have adjusted our investment and spending levels, and will push for further efficiencies in the fourth quarter and beyond as we look for maximum return for every dollar that we spend.”
Chairman Barry Diller said: “Yes, it’s a difficult environment, but that’s everyone’s news, and for travel any predictions about its depth or duration would be foolish.
“What is important for shareholders of Expedia to know is that the company is well capitalized, focused only on operating its sole travel services business, with no distractions, and a conviction that it will emerge stronger in every line of its business.”
Gross bookings for the quarter increased by seven per cent year-on-year.
Europe bookings increased 18% – 13% excluding the net benefit from foreign exchange – outstripping North America bookings which rose by just one per cent. Other bookings, primarily from Asia Pacific operations, increased by 25%.
Overall sales increased by 10%, mainly driven by increased worldwide merchant hotel revenue and advertising and media revenue. North America revenue increased by seven per cent, Europe revenue increased 16% – 10% excluding foreign exchange – and other revenue increased by 24%.
Worldwide air revenue dropped by seven per cent for the third quarter due to a five per cent decline in tickets sold and a two per cent decrease in revenue per air ticket.
Package revenue decreased 5% for the quarter primarily due to weakness in key North American package markets such as Las Vegas and Hawaii, the company said.
Worldwide merchant hotel sales rose by seven per cent due to a 15% increase in room nights stayed, including rooms as a component of packages, partially offset by a six per cent decline in revenue per room night.
Worldwide revenue from other products and services, including advertising and media, car rentals, destination services, agency hotel and cruises, increased by 27% due primarily to increased revenue from advertising and media and agency hotel businesses.
by Phil Davies
Phil Davies
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