Expanding Expedia sees surge in full-year profits

Expedia's net profits jumped 71% in 2014
Expedia’s net profits jumped 71% in 2014

Expedia achieved a strong rise in profits in 2014, as the company continued expanding with new acquisitions.

The online travel giant generated a full-year net profit of US$398.1 million last year, 71% higher than the US$232.9m profit it posted in 2013. Total revenues jumped 21% to US$5.76 billion following a 28% increase in bookings.

Expedia completed the acquisition of Australia’s Wotif Group for AU$703m (US$612m) in November 2014, and followed this up in the first quarter of 2015 with a US$280m deal for Travelocity. The 2014 results also include those of trivago, in which Expedia acquired a controlling interest in March 2013.

Expedia said the strong 2014 revenues were “primarily driven by growth in hotel and advertising and media revenue”. International revenue increased 20% in 2014, with non-US revenue representing 47% of the company’s total turnover.

Hotel revenue increased 18% in 2014 on a 26% increase in room nights, while air revenue climbed 22% following a 28% increase in air tickets sold. Advertising and media revenue increased 50% and Expedia also noted that it achieved growth in the travel insurance and car rental sectors.

In addition to the major acquisitions, Expedia also entered into new commercial agreements with several airlines last year, including BA, Air Canada, JAL, Aeroflot and Air Tahiti Nui, while the Expedia Lodging Partner Services programme added several major hotel companies, including Best Western, Wyndham and Carlson Rezidor.

Expedia’s operating profits climbed 41% in 2014, to US$517.8m.

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