Expedia Inc. is planning to launch a rail product next year,
CEO Dara Khosrowshahi said during Thursday’s third-quarter earnings call.
He was tight-lipped on what, exactly, that product would be,
but said Expedia believes rail is an important product that “has been typically
underinvested in as far as online travel agencies go, because there isn’t much
money in the product itself.”
Khosrowshahi said he expected rail to grow over the next
three to five years.
Expedia’s net profit was $283.2 million in the third
quarter, a 10.2% increase from last year’s Q3. It was the company’s first
quarter with Orbitz results included. Expedia closed on the Orbitz acquisition
on Sept. 17.
Including financial results from the 14 days in the quarter
that Expedia owned Orbitz, revenue was $1.94 billion, up from $1.71 billion.
Hotel growth was also up. Excluding eLong, the Chinese
online agency that Expedia sold in May, room night growth was up 36%, compared
with 24% growth in last year’s third quarter.
Excluding eLong, Expedia’s gross bookings increased 21% in
the quarter, to $15.39 billion.
Khosrowshahi said the integration of Orbitz will take place
over the next nine months. The integration of Orbitz for Business will take a
year or more, he said.
“That said, we’re off to a strong start and the teams are
working hard to bring the companies together as quickly and as efficiently as
possible, making sure that our travelers and supplier distribution partners are
all taken care of in the process,” he said.
The also addressed Airbnb and its potential impact on
Expedia.
“You can tell by the results that any effect that Airbnb has
had on us is immaterial at this point,” Khosrowshahi said. “We don’t see it in
the business. It’s not affecting us directly at all.”
The lower-priced
nature of Airbnb accommodations appeals to some travelers, he said, and Expedia
will look to build its rental product over time.
“I think incrementally, it will become a more important part
of our mix next year and going into the following years,” he said.