In the fourth quarter, Expedia’s (EXPE) revenues of $2.56 billion beat analysts’ estimate of $2.54 billion and rose 10% YoY (year-over-year). The company continued to benefit from the strong travel demand environment in the United States.
The growing US economy, as reflected in the country’s improving GDP, stable job market, and the steady rise in wages, is driving travel demand in the domestic market. Expedia’s sustained focus on enhancing its product portfolio and marketing initiatives and mobile-centric product design are driving its top-line growth.
Expedia reported revenue growth across all of its business segments. The Core OTA segment’s revenues rose 10% YoY to $2.05 billion. The segment’s gross bookings rose 11% to $17.92 billion in the fourth quarter. The Egencia segment’s revenues rose 13% to $155 million due to enhanced product offerings. The segment’s bookings rose 10% YoY to $1.84 billion.
The HomeAway segment’s revenues rose 20% to $230 million. The gross bookings rose 15% to $2.19 billion. The online bookable listings reaching 1.8 million in the fourth quarter. The division registered a strong 20% rise in stayed property nights. Trivago (TRVG) had a weak performance. Trivago’s revenues fell 12% YoY to $190 million.
Revenues by product
Lodging contributed 69% of Expedia’s revenues in the fourth quarter. Air travel contributed 8%, advertising and media contributed 9%, and other revenues contributed 14%.
Lodging revenues rose 10% YoY due to an 11% rise in room nights stayed. The increase was partially offset by a 1% fall in the revenue per room night. The company’s air travel business revenues rose 18% YoY due to 10% growth in air ticket volumes and a 7% rise in the revenues per ticket. The company’s advertising and media revenues rose 9%. Other revenues rose 10% during the quarter due to higher sales of travel insurance products.
Analysts think that most online travel agencies (IYW) could benefit from the strong travel demand environment. TripAdvisor (TRIP), Booking Holdings (BKNG), and Ctrip.com International (CTRP) are expected to report 6.8%, 15%, and 12.7% YoY growth in their respective fourth-quarter revenues.