European bookings 32% up for Expedia

Expedia grew European bookings by 32%, according to its results for the first three months of this year.

The company said this, coupled with 11% revenue growth across all regions, shows “progress” compared with 2006.

“From the very difficult prior year, and a first quarter this year reflecting growth, we begin 2007 with renewed confidence in Expedia’s operations and business model,” said chairman and senior executive Barry Diller.

“With accelerating transaction growth, a 32% increase in European bookings, 11% revenue growth and the very beginning echoes of resurgence at Expedia.com we are seeing the early results of the reinvestments and reorganisations that made last year so challenging.

“We can’t yet say what the next quarter or year may bring, but clear progress is being made both under the hood of daily work and structurally, with reduced share counts and a focus on managing for free cash flow over the long term.”

The group believes its ‘Summer Sale’ featuring 30% discounts on hotels, cars and activities at over 200 destinations, will help it continue 2007 “with renewed energy to address the challenges before us”.

Gross bookings increased 8% for the first quarter of 2007 compared with the first quarter of 2006.

North America bookings increased 1%, Europe bookings increased 32% (22% excluding the impact of foreign exchange), and ‘Other’ bookings increased 23%.

Revenue increased 11% for the first quarter, primarily driven by increased worldwide merchant hotel and advertising revenue, but was partially offset by a decline in North America air revenue.

North America revenue increased 6%, Europe revenue increased 29% (20% excluding the impact of foreign exchange), and ‘Other’ revenue increased 28%.

Worldwide air revenue decreased 16% for the first quarter due to a 20% decrease in revenue per air ticket, partially offset by a 5% increase in air tickets sold.

Expedia said the decrease in revenue per air ticket reflects decreased compensation from air carriers and GDS providers.

Gross profit for the first quarter of 2007 was $429 million, up 15% compared with the first quarter of 2006 primarily due to increased revenue and a 212 basis point increase in gross margin to 77.97%.

Expedia said the gross margin increase was due to “cost savings from its Apollo and other cost cutting initiatives, higher merchant hotel raw margin and an increased mix of net advertising revenue, partially offset by a lower margin on its agency air product”.

OIBA for the first quarter increased 18% to $104 million, helped by higher revenues.

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