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No 2000/7 - Wednesday, November 15, 2000
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  Expedia announces financial results that are very similar the ones announced by Travelocity

Expedia announces financial results
that are very
similar the ones announced by Travelocity

Looking glass,
looking glass,
who in this
virtual land is
the fairest site
of all


Expedia's gross online bookings rose to $467 million for the quarter that ended Sept. 30, 2000, up from $450 million in the previous quarter.

Even though Travelocity recently announced having achieved $610 million in gross bookings for that same period of time, when we put everything to perspective, we realize that both internet sites are side by side.

Indeed, in order to compare their performances in an objective point of view, we've got to bear in mind that Travelocity merged with Preview Travel earlier this year and now includes both results in its quarterly results.

It is interesting to notice the way Expedia's gross bookings rose over the months:


  • June 30, 1999: $ 201 million (506.000 transactions).

  • Sept 30, 1999: $ 224 million (643.000 transactions).

  • Dec 31, 1999: $250 million (704.000 transactions).

  • March 31, 2000: $ 401 million (1.022.000 transactions).

  • June 30, 2000: $ 450 million (1.186.000 transactions).

  • Sept 30, 2000: $ 467 million (1.306.000 transactions).

Expedia versus Travelocity

If we compare this year's third quarter with the same quarter in 1999, we notice that Expedia's results rose by 208% when Travelocity's results only rose by 195%, which means that Expedia's results would have grown faster than Travelocity's.

The conversion rate of lookers-to-bookers is another interesting element since it would have gone, according to Expedia, from 3% last year to 4.8% today.

As for Travelocity, such conversion rate would have gone from 3.8% last year to 6.8% this year.

Both sites use the figures released by Media Metrix to calculate those ratios which might not be the best way to proceed when we know that Media Metrix hardly takes into account the number of people accessing websites from their working place.

All this means that these conversion rates might well be highly overestimated and far off the truth… since Media Metrix mainly measured the number of people accessing websites from home computers.

The number of new purchasing customers on Expedia website for the third quarter of 2000 reached 464,.000 while the number of cumulative registered customers was 2,428,000 and the number of unique purchasing customers was 741,.000.


That last figure might lead us to wonder about Travelocity since it indicates that the average monthly purchasing customers was 509.00 which would represent 1,527,000 customers for the third quarter (and 2,206,000 transactions) and this can be compared to Expedia's 741,000 customers.


This means that the average transaction would reach $294 for Travelocity and $357 for Expedia.

Expedia's results versus Travelocity's results

It is interesting to notice that Travelocity's commission rate is higher than Expedia's since Travelocity received $38.2 million in commission for the third quarter when Expedia only received $21.64 million, which represents an average commission rate of 5.92% for Travelocity and 4.63% for Expedia.

Travelocity generated higher revenues from advertising with $13.79 million than Expedia with $8.12 million.

Finally, Expedia's net loss for the third quarter reached $31.866 while Travelocity's net loss was $31.286 million.

If we consider the income perceived from commission rates, we easily understand that the break-even point is still a long way off.

NB: the site points out that as far as the third quarter ending Sept 30, 2000, the accounts have not been audited yet (the same thing happens with Travelocity's figures).

Source : Expedia

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    Looking glass, looking glass, who in this virtual land is the fairest site of all ? has been falling dramatically for a few weeks now, and they lost 33 per cent of their value last week.

One might say that the measures provided by MMXI Europe about online booking services might well have something to do with such drop in

According to the figures released by MMXI Europe, the number of unique visitors to's online booking service in the UK fell by 24% between August and September, but it is also the case for (-25%) and (-31%).

But let me dispute the economic reality of these figures.

Indeed, the measures released by MMXI Europe, just like the figures released by NetValue, only take into account the visitors that access websites from home, and never from their working place.

And yet, every one knows how important that surf is for the eTourism sector, since it is during the day that we can notice the most important peaks on those sites.

There is no doubt that that if you compare August with September, the result can only be unfavorable to the sites that register their highest peaks during working hours since in August, holiday time, most of these visitors could more easily have access from home than from work…

To that matter, please note that B2B sites do not seem to exist for those Research companies, since they are not even mentioned.

In my opinion, it is very dangerous to draw hasty conclusions by using incomplete visitors' measures that also show a large ignorance of the web surfers' behavior and I think those research companies should be a little more modest when they give their verdict about how healthy a web site really is!

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