Expedia sets sights on Booking.com territory

Expedia Inc is hoping that new initiatives on supply acquisition in Europe will help it to give booking.com “a pretty good run for its money”.

Talking through Expedia Inc’s Q2 with Wall Street analysts, CEO Dara Khosrowshahi talked up its “Easy Manage” agency hotel program launched in Europe during the quarter.

The new program is targeted primarily towards “smaller properties outside primary destinations”, a sector where  booking.com has traditionally done well.

“I think we signed up around 1500 hotels or so to the Easy Manage program,” he said. “We will see what kind of momentum we get as the year progresses.”

He added that Easy Manage was “a lighter touch” and that “the margins tend to be lower and as a result, the services to the hotel tend to be lower as well.”

Hotels which sign up to Easy Manage will also be distributed through hotels.com.

During the quarter, hotels.com European point-of-sales managed to increase the number of room nights booked between April and June by 35% compared with last year. This number has been boosted by the integration of hotels from venere.com, which Expedia Inc bought in Q3 08.

In APAC, the number of room nights booked by Expedia and hotels.com was 80% ahead. Including its US business, the total room nights booked through Expedia Inc was 26% higher than Q2 08.

But in dollar terms, global ADRS were 19% down, leaving Expedia Inc’s revenues from hotels off 1%.

There is no geographic breakdown of Expedia’s air business, but the pattern is similar to hotels – more tickets booked – volumes up 13% – with the revenue per ticket down – by 29% – resulting in lower revenues for Expedia – off 20%.

Khosrowshahi repeated his observation from previous earnings calls about the weakness in the UK compared with other markets in Europe, based on the relative strength of sterling.

Expedia CFO Michael Adler added that London as a destination is benefitting, not only in terms of its appeal to  European and American visitors, but also from more Brits travelling within the UK.

Reaction to Expedia’s results in the US were positive. While its net income fell to $41m from $96m, this was better than Wall Street had predicted, prompting a double-digit percentage increase in its share price following the announcement.

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