International Revenue Bolsters Travel Players’ International Expansion Plans

According to travel research firm PhoCusWright Inc., the global travel market is expected to grow from $888 billion last year to $939 billion this year. By region, the U.S. market will grow from $255 billion last year to $271 billion in 2011. Another report by the researcher projects that the online leisure-travel market in the U.S. will grow from $97 billion last year to $113 billion this year, translating to 16% growth over the year. The European travel market is projected to grow from $319 billion to $331 billion, while APAC markets are projected to grow from $256 billion to $274 billion and Latin American markets from $58 billion to $63 billion for the year. Online travel markets are all set to address increased travel spending in these regions.

Expedia’s Financials
Expedia’s (NASDAQ:EXPE) Q2 revenues grew 23% over the year to 1.02 billion driven by 21% growth in hotel room nights and a 27% increase in advertising and media revenues. The Street was projecting revenues of $0.97 billion. EPS of $0.55 was ahead of the market’s projected earnings of $0.49 per share.

The company’s international expansion strategy is bearing good results. International bookings of $3 billion accounted for 38% of bookings for the quarter, compared with 33% a year ago. International revenues of $0.44 billion grew from 36% of total revenue last year to 46% this year. As part of their international expansion plans for TripAdvisor, Expedia launched their 30th international site, this one in Egypt.

Expedia Expands TripAdvisor
In spite of wanting to spin off TripAdvisor into a new company, Expedia continued to invest in its growth. During the quarter, TripAdvisor bought the Chicago-based Facebook app Where I’ve Been. The app helps users to indicate places they have visited and places they want to visit on a map. At one time, the app claimed to have nearly 116,330 daily active users and 1.6 million monthly active users. Of late, traffic has fallen to 3,000 daily users and 70,000 monthly users.

Expedia’s stock is trading at $29.34 with a market capitalization of $8.05 billion; it hit a 52-week high of $32.89 at the end of July.

Priceline’s Financials
Competitor Priceline (NASDAQ:PCLN) continued to deliver stellar results. Second quarter revenues grew 44% over the year to $1.1 billion with EPS rising to $5.49. The market was looking for revenues of $1.08 billion with EPS of $4.87. Growth was driven by international markets where bookings doubled over the year, while domestic gross bookings increased 13% over the year.

For the current quarter, Priceline projected revenues of $1.37 billion-$1.42 billion, compared with analyst estimates of $1.38 billion. EPS of $9.10-$9.30 is well ahead of the Street’s target of $7.98.

Priceline’s International Growth
Priceline too is benefiting from strong growth in international operations. Within international hotel bookings, Booking.com’s Europe business continued to add inventory and now boasts of 157,000 hotels spread across 101 countries. The recently acquired international car rental business of TravelJigsaw also saw strong growth with the number of days cars were rented increasing 55% over the year to 6.6 million. The company claims to be increasing its market share in the Asia Pacific and Latin American markets.

The stock is trading at $497.32 after having touched a 52-week high of $561.88 in May of this year.

Orbitz’s Financials
Orbitz (NASDAQ:OWW) saw Q2 revenues grow 4% over the year to $201.8 million. EPS of $0.08 fell from $0.09 reported a year ago. The market was looking for revenues of $198.9 million with EPS of $0.01. Like its peers, Orbitz’s international bookings dominated growth. Orbitz’s total bookings, however, fell 3% over the year despite 39% growth in international bookings. For the quarter, domestic bookings fell 9% over the year.

For the current quarter, revenues are projected to be in the range of $194 million-$200 million with adjusted EBITDA to be $33 million-$37 million. They expect to end the year with $752 million-$762 million in revenue and adjusted EBITDA of $118 million-$125 million.

Orbitz Expands Business Offering
Orbitz recently expanded their business offering by rolling out a program called Business Advantage. The new set of offerings gives frequent business travelers the ability to book hotel accommodations in advance with fully refundable rates, discounts, and complimentary amenities. The company has tied up with hotel partners in major U.S. markets and key international business destinations in Canada, Mexico, and the United Kingdom.

The stock is trading at $2.58 with a market capitalization of $266.64 million. It is at a significant discount compared with the 52-week high of $7.01 reached in November of last year.

Kayak’s Financials
Meanwhile, the much-awaited Kayak IPO continued to be delayed. The company now claims that the chances of their IPO are 50% driven by the uncertainty surrounding Google’s ITA acquisition, which will impact metasearch capabilities in the coming quarter. However, for the first half of the year, Kayak claims that revenues increased 36% over the year to $109.4 million. For the period, net loss of $3.1 million was significantly worse than previous year’s profits of $2.5 million. The loss was driven by a $15 million impairment charge that Kayak took in the first quarter of this year as it phased out the SideStep URL and brand and migrated traffic to Kayak.com.

Kayak’s International Expansion
As part of their international growth, Kayak acquired Austrian market leader checkfelix.com earlier this quarter. Kayak already has local websites in 11 countries and plans to continue to operate checkfelix.com as an independent brand, given that is among the the strongest brands in the Austrian online travel sector.