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Competition in UK hits Expedia sales
Expedia’s fourth quarter profits dropped by 43% to $25.2 million in a “fiercely competitive environment”.
While international sales were up by 30% in the final three months of 2005, this was a lower rate than the rest of the year “reflecting continued challenges in the travel and competitive environments in Europe, particularly in the UK, and the impact of foreign exchange,” the company said.
The final quarter of 2005 “wasn’t as strong as we hoped it to be,” said CEO and president Dara Khosrowshahi, despite overall sales rising by 13% year-on-year, mainly driven by increased worldwide merchant hotel revenue, acquisitions and growth in its car rental business.
Global air sales dipped by 4% in the quarter due to an 11% decline in revenue per ticket, partially offset by an 8% rise in tickets sold.
For the full year, Expedia reported a net profit of $228.7 million on sales of $2.1 billion, up from $163.4 million and $1.8 billion respectively.
Chairman and senior executive Barry Diller said: “Despite a fiercely competitive environment, headwinds in the hotel and airline industries and a mid-year spin-off, Expedia Inc delivered meaningful bookings, earnings and free cash flow for its stockholders in 2005.”
Khosrowshahi said the company was introducing innovations “marking Expedia’s multi-year evolution from efficient transaction engine to world class retailer of travel products and services”.
He added: We are investing to transform the way travellers plan, purchase and enjoy their trips – again.”
Report by Phil Davies
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