EXPEDIA PROVIDES SOME COMFORT FOR LEISURE

The online travel company Expedia put up a good quarter last week.  Here are some broader takeaways from the call:

  • Leisure travelers have responded to better value
  • Ticket sales up double digits for the March-April period y-o-y. January and February sales were down 9% y-o-y. 
  • International transactions were up 16% internationally but the two countries looking the weakest were the UK and Germany
  • Aggressive fare sales from air carriers were partly responsible for the uptick in demand 
  • EXPE expects bookings, revenue, and free cash flow to decline y-o-y for 2009 
  • Based on the economic conditions, etc., consumers were becoming more price sensitive and that is why promotions on the air booking fees [and other booking fees] made sense 
  • "On the other side of the equation, for example, London as a destination for us has been very, very strong. So again, that's another response to FX rates as far as where consumers are going. As far as a booking window goes, we do see some compression there, and as a result unfortunately our visibility is not what it used to be." 
  • "The OPEG channels continue to be very strong. Hotwire unique visitors are up very nicely, transactions were up 30% or so in Q1 so that's a continuing trend that hasn't changed. I'd say one other trend that has changed is that U.S. consumers are starting we're seeing some increase in U.S. demand going into Europe because of the strength of the dollar." 
  • Leisure market has been stimulated by the aggressive actions of suppliers 
  • The effects of the swine flu are yet to be determined but momentum was even stronger before the breakout occurred.