Downturn deals different cards for Expedia and Priceline
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Worldwide spending on travel might have dropped but the fortunes of two major online travel companies show signs of a vast disparity, Associated Press reported.
Expedia has reported a US$3 billion write-down and weak revenue while its smaller rival Priceline.com has benefitted from a surge in bargain-hunting.
Expedia Inc. reported a loss of US$2.76 billion in its fourth quarter, which ended 31 December. Priceline, on the other hand, beat Wall Street’s expectations, reporting that earnings for the quarter ended 31 December were 1% higher than a year earlier, at US$33.3 million.
The companies’ divergent fortunes were most apparent in their airline bookings during the quarter.
Expedia was quoted saying that its revenue from airlines dropped 16% in the quarter, as the number of air tickets it sold fell 12%. Meanwhile, Priceline said it sold 44% more airline tickets in the fourth quarter than it did a year ago.
The report said analysts had speculated that Priceline’s no-booking fee strategy on airline tickets helped the company outperform its rival.
“We are going to be taking a hard look at all aspects of our air business and booking fee is part of it,” Expedia President and Chief Executive, Dara Khosrowshahi, was quoted saying.
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