A lot more people are using Expedia to book hotels than did so last year. And that surge is having a positive impact on the Bellevue online travel giant.
According to Expedia’s third quarter earnings results, bookings increased by $3.2 billion, or 21 percent, over last year to $18.6 billion. The number of nights stayed also increased 17 percent over last year.
As more people use the site, Expedia is adding more hotels to its portfolio. During the third quarter, the company added 14,000 properties, 19 percent more than it added this time last year. That gives Expedia — and its affiliate sites — a combined 321,000 properties.
Here’s a look at some of the numbers from Expedia’s earnings report:
Expedia hit pretty close to Wall Street expectations in the third quarter. The company reported non-GAAP earnings per share of $2.41 on $2.58 billion in revenue, an increase of 33 percent over last year. Revenue was a little greater than an average of analyst expectations compiled by Yahoo Finance, which predicted revenue of $2.55 billion. Earnings were a little below the average expectation of $2.47 per share but still well within a healthy range.
Though the company didn’t blow Wall Street away with its results, Expedia bounced back from a tough second quarter that saw it miss expectations.
Expedia stock is up nearly two percent following the earnings release. On the third quarter earnings call, Expedia CEO Dara Khosrowshahi said the company was humbled a bit by its lackluster second quarter, but he believes it was more of a temporary speed bump than a long term problem.
“The formula we’ve established for the last five years still works, and there is no reason it won’t work on a go forward basis,” Khosrowshahi said.
Despite its primary function as a travel company, Expedia is investing heavily in technology. Khosrowshahi, who spoke at the GeekWire Summit 2016, talked about the power of Facebook Messenger bots, and the company released its first one earlier this year. They could have value on both the booking and customer service sides. A customer service bot could change a traveler’s reservations easily, without a lengthy phone call or set of information about the trip.
Expedia is also experimenting with virtual reality. Khosrowshahi described virtual reality as a way to wet people’s appetite for a trip. But he doesn’t want to see it replace the real-life travel experience.
“We want virtual reality to be just good enough to make you want to go there, but not good enough to make you forego the trip.” Khosrowshahi said on the earnings call.
In terms of destinations, Expedia executives said places impacted by the Zika virus such as Florida and Mexico are seeing fewer travelers. On the flip side, Great Britain’s decision to leave the European Union has led to a slight increase in travel there, as the weakening of the Pound has made it a more affordable place to visit.
Expedia-owned Trivago and HomeAway posted revenue of $276 million and $210 million, respectively. Trivago saw a revenue increase of 57 percent over this time last year, while HomeAway revenue increased 61 percent over last year.
Expedia is exploring an initial public offering for Trivago, and it could happen before the end of November. The company has hired JPMorgan, Goldman Sachs, and Morgan Stanley to run the initial public offering. Analysts have valued Trivago at more than $5 billion, and the company could be looking to raise at least $1 billion in its IPO.
Expedia executives declined to comment on Trivago’s potential IPO on its quarterly earnings call.