Expedia's stock catches a lift
The company is looking at European growth through acquisitions.
Online travel agency Expedia (EXPE) posted excellent first-quarter results last month led by growth in international markets. The company seems to be continuing this trend as it heads into the European online travel markets. A report released by leading digital business analytics firm comScore revealed promising growth in Web traffic from Europe at Expedia sites in April this year. The agency is fully committed to European growth through Egencia and its recent acquisition of Nordic travel management company Via Travel. Foreseeing robust online bookings growth in the international segment, the stock has already shot up 40% post the first quarter's earnings release on April 26.
ComScore reported a 32% rise in unique visitors on 13 of Expedia's European sites in April, a substantial improvement over 7% growth in March 2012. European markets have witnessed massive growth in online bookings despite a macroeconomic slowdown.
The Europe Online Travel Report 2012 by yStats.com reported 20% growth in OTA (online travel agency) bookings in 2011. As shown below, Expedia still occupies only 6% of the European OTA market share, and a fragmented hotel industry promises tremendous growth potential in this region. In order to increase its reach, the agency is aptly extending its services on mobile phones through the launch of mobile apps for its travel booking services. Egencia mobile's Andriod version is the latest release.
The international markets formed 39% of gross bookings and 40% of total first-quarter revenue. The company envisions more than half of gross bookings and revenue through international points of sale in the near future. For this vision to materialize, Expedia will have to strongly leverage growth opportunities through Hotels.com, Egencia, VIA Travel, EAN, and Hotwire brands -- which find presence in Europe, Asia Pacific, Canada and Latin America.
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