U.S. Online Travel Companies Pursue Global Expansion

According to PhocusWright’s Global Online Travel Report 2012, the online travel segment will account for a third of the total global travel market value. Online travel sales are expected to grow by more than 10%  in the U.S. in 2012. Experts predict that the U.K. will account for the largest share of Europe’s online travel market in 2013. Gross bookings in the APAC region for the unmanaged business travel and consumer leisure market are projected to grow by more than 30% in 2012. The online travel players are thus focusing significant efforts in expanding internationally.

Expedia’s Financials
Expedia’s (Nasdaq: EXPE) Q1 revenues grew 12% over the year to $816.5 million, compared with the market’s expected revenues of $790 million. EPS of $0.26 significantly ahead of the market’s target of $0.14.

For the quarter, Expedia’s hotels services division contributed 70% of its worldwide revenue and airlines brought in 11%. Over the year, hotels revenues grew 18% to a 24% growth in the number of room nights stayed, which was partly offset by the revenues per night decrease of 6%. Air revenues fell 17% due to a 20% delicne in revenues per ticket, which could not compensate for the 5% growth in the number of tickets sold during the quarter.

By region, domestic revenues grew 11% to $491 million and international revenues reported a 14% growth to $325 million.

Expedia’s International Expansion
As part of their international expansion strategy, Expedia recently announced plans to acquire VIA Travel to build on to their corporate business offering of Egencia. VIA Travel provides corporate travel and other services, including group meetings, leisure travel and marine transport services. It is the largest travel management company for the Nordic region in Europe. The deal will help Expedia strengthen its presence in the European markets.

Expedia’s stock is trading at $41.11 with a market capitalization of $5.22 billion. It touched a year high of $65.78 in July last year.

Orbitz’s Financials
Orbitz’s (Nasdaq: OWW) Q1 revenues grew 3% over the year to $189.8 million, falling short of the Street’s target of $190.4 million. Revenues were driven by the 5% increase in room nights due to growth within the U.S. consumer business. The company posted a loss of $0.06 per share, compared with the loss of $0.11 per share in 2011, and managed to beat the market’s projected loss of $0.07 per share.

By segment, air revenues were flat at $72.2 million for the quarter while hotel revenues grew 9% over the year to $49.5 million. Vacation package revenues grew 17% over the year to $30.3 million. Advertising and media revenues fell 10% to $11.5 million due to lower display revenues.

For the current quarter, Orbitz is projecting revenues of $205-$211 million with an adjusted EBITDA of $31-$35 million. The Street was looking for revenues of $209 million with earnings of$39.4 million. For the current year, Orbitz is projecting revenues to grow 4%-8% over the year while adjusted EBITDA is projected to grow 7%-12%.

Orbitz’s Corporate Offerings
As part of its expanding business offerings, Orbitz recently released Orbitz for Business Express to offer savings and professional travel services to small businesses. The offering will help Orbitz obtain business from even those SMBs that do not have a managed travel program. Orbitz for Business Express enables those businesses with a dedicated booking website that features special rates and discounts, 24/7 Orbitz customer support, and access to Orbitz travel experts along with detailed reports on the organizations’ travel expenditures.

Orbitz’s stock is trading at $3.83 with a market capitalization of $398.71 million. It touched a year high of $4.49 in December last year.

Priceline’s Financials
Priceline’s (NASDAQ: PCLN) Q1 revenues grew 28% over the year to $1.04 billion. Earnings for the quarter grew an impressive 61% over the year to $4.28 per share. The Street was looking for revenues of $1.04 billion with EPS of $3.95. This was the 24th consecutive quarter when Priceline exceeded market expectations.

For the current quarter, Priceline forecasts an EPS of $7.20-$7.40 with revenue growth of 18%-23%. The Street was looking for revenue growth of 26% and EPS of $7.37.

Priceline’s International Growth
Priceline’s current strong performance is driven by its international growth. Hotels.com now boasts over 210,000 hotels on its website. Last quarter, 78% of Priceline’s gross bookings were attributed to the international markets. To continue to grow their international operations, Priceline is rumored to be in talks with U.K.-based Trainline.com. Trainline is a privately held player that provides online rail ticketing service.

Priceline’s stock is trading at $675.39 with a market capitalization of $39.15 billion. It touched a ten year high of $774.96 earlier last month.

Kayak’s Financials
Meanwhile, private player, Kayak has finally stepped up efforts to roll out its IPO. Last quarter end, Kayak amended its S-1 to release a 50 million stock offering instead of the earlier planned offering of 5 million shares. The company plans to list on the Nasdaq under the stock symbol KYAK.

According to its recent filing, Kayak’s revenues grew 32% last year to $224.5 million. Adjusted EBITDA during the year grew 56.2% to $50.2 million. For the first quarter this year, Kayak saw revenues grow 39% over the year to $73.3 million with a net income of $4.1 million.

Kayak’s Mobile and Online Offerings
Last year, Kayak redesigned its iPad app and integrated it with the iPhone app. Executives also upgraded the company’s website to improve the user interface and develop a more comprehensive consumer experience that is similar across all of Kayak’s platforms, including the Web, mobile and other apps. As a result, Kayak is seeing good traction in its online statistics. During the quarter, Kayak processed 310 million travel queries, reporting a growth of 45% over the year. The company’s mobile app also saw strong growth with downloads growing 43% over the year to 3 million.