Expedia has reported a significant drop in profits in the second quarter of the year.
The online travel company saw a 13% rise in bookings, leading to a 16% rise in revenues, which reached US$1.2 billion. But surging costs, including a 33% rise in sales and marketing expenses, a 21% jump in technology costs, and a 14% hike in administrative costs, hit the company’s bottom line. Operating profits slumped 39% to US$94.3 million while net income fell 27% to US$90.5m.
“We knew we were facing second quarter headwinds and those which we expected, as well as some we didn’t, materialised. Despite this, we remain confident about our long-term strategy,” said Dara Khosrowshahi, president & CEO of Expedia.
“We see continued return on our core brands’ technology investments, broader adoption of ‘Expedia Traveler Preference Program’, momentum in our recent acquisitions and emerging markets as well as exciting traction in one of travel’s fastest growth channels – mobile.”
Expedia’s global hotel revenue increased 12% for the second quarter of 2013 driven by a 19% increase in room nights. Worldwide air revenue increased 8%, due primarily to a 7% increase in air tickets sold.