Expedia’s Q2 saw the company earn $2.6 billion in revenue, up 18 percent over the same period in 2016, thanks to the continued success of its HomeAway and Hotels.com platforms. The company surpassed analyst expectations with 12 percent more gross bookings than the previous year, reaching $22.8 billion and a net income of $56.7 million (79-percent higher than Q2 2016).
HomeAway stole the show in Q2, with the online travel agency's answer to Airbnb seeing a revenue increase of 31 percent to $224 million. During the company's quarterly earnings call, Expedia CEO Dara Khosrowshahi said the company has plans to take HomeAway international over the next five years, but the focus for the rest of 2017 will be on domestic growth.
“We think there's a lot of potential, but there's also a lot of work ahead of us,” Khosrowshahi said during the call. “So this year is about domestic and next year is about global for the HomeAway team.”
Expedia also took on $10 million in restructuring charges during Q2 as the company migrates technology platforms under one umbrella, particularly through cloud migration. Mark D. Okerstrom, Expedia’s EVP and CFO, said rising spend is expected to continue during Q3 as the company continues the transition of its Orbitz platform to Expedia, which began during the first half of 2016. Total cloud spend for Expedia was $21 million for Q2, a $9-million increase from the same period in 2016, with roughly 60 percent going toward cost of revenue and 40 percent toward technology and content.
While global hotel company Hyatt recently revolted against Expedia, the company paid little mind as it instead announced a $350-million investment in Traveloka, an online travel portal based in Indonesia. The investment is part of Expedia’s growing focus on Southeast Asia and expansion of its hotel supply in the market.
“We are incredibly excited to have Traveloka as an even closer partner; they've really performed exceptionally well and in a relatively short period of time have established themselves as a real leader in Indonesia, expanding throughout Southeast Asia,” Khosrowshahi said. “So [we’re] very impressed with them and very impressed with the management team. We're hopeful that we can use some of our global expertise to help them, and we expect to learn a lot from them as well.”
But that’s not the only new company Expedia has its hand in right now, with the company completing a majority stake acquisition of SilverRail, a booking platform for rail travel throughout the UK.
“The combination of the SilverRail offering with the rail product rolling out on Brand Expedia as well as Egencia will be quite powerful,” Khosrowshahi said. “This will be a multiyear project, but we're happy to have jumped into great position that we can build on in the coming years.”