Expedia Inc NASDAQ:EXPE has released its second quarter results for the fiscal year 2014, beating analysts’ expectations which helped the stock to advance by 5% in the aftermath. In a segment on CNBC, Dara Khosrowshahi, Expedia’s CEO has commented on the company’s strong second quarter results, saying travel market is expanding and “online” takes an ever increasing chunk of it.
The travel company has seen its gross bookings number rise to $13 billion in the second quarter and its revenue increase by 24% year-on-year. Room nights grew at a pace of 20%, hitting a record, and adjusted earnings per share jumped 60% year-on-year. Such positive results give the company an opportunity to spend more on marketing and investment, which in turn brings more customers and revenue, according to Khosrowshahi.
“Right now we are in a pretty good spot within a competitive marketplace. […] We are seeing our marketing spending going up faster than revenue but these are big scale businesses when you’re talking about $13 billion of gross bookings in one quarter, so we are able to scale off of our fixed expenses. So I think it is a great situation when you can spend aggressively into marketing but still increase profits […],” he added.
Last week, Expedia Inc NASDAQ:EXPE’s competitor Priceline Group Inc NASDAQ:PCLN announced the acquisition of OpenTable Inc NASDAQ:OPEN for $2.6 billion in cash, in a deal that marked its expansion into the restaurant business. Asked if Expedia Inc NASDAQ:EXPE has similar plans, Dara Khosrowshahi said that such a move is not in the cards at the moment, as there are still plenty of opportunities in the travel market, which is a $1 trillion dollar-industry and growing. He has disclosed instead that the company plans to look for growth in Europe and Asia.