Q2: Growth and profits for the big three in travel distribution

WASHINGTON -- Three big names in travel distribution -- IAC Travel, Amadeus and Orbitz -- reported revenue growth and rising profits in the second quarter.

Expedia and its corporate cousins sold $3.4 billion worth of travel in the second quarter, generating a third of the revenue and all of the operating profits of parent IAC/InterActive Corp. Of the total travel sales, Expedia accounted for $2.6 billion, the company said.

At IAC Travel, which includes Expedia, Hotels.com and Hotwire, total revenue rose 34%, to $556 million. Operating income rose 46%, to $129 million. (The 2003 revenue figure was adjusted to report hotel merchant revenue in the same manner across all brands.)

On the downside, the corporate parent's operating profit was flat at $110 million on revenue of $1.5 billion, and corporate net income fell 25%, to $70 million. The company also scaled back its forecast. The initial reaction on Wall Street was disappointment, and the stock price plunged.

Orbitz said it boosted revenue 30%, to $75.6 million, in the second quarter and generated net income of $10.4 million, reversing a net loss of $2.9 million a year ago. Gross travel bookings rose 21% and topped $1 billion.

Air revenue rose 12%, to $44.2 million, and all other travel revenue rose 96%, to $22 million. Orbitz's merchant hotel program is in the latter category, and sold 327,000 room nights in the second quarter, a 600% increase.

Amadeus also had a good quarter: Revenue rose 10.2%, to $620.9 million. Net income was up a much heftier 47.7%, to $68.8 million. Total bookings on Amadeus for the period rose 9.8% year over year to 114.7 million, with air bookings rising a little faster at 11.9% and hotels growing still faster at 16%.

Revenue from supplier booking fees grew 10.4%, and nonbooking fee revenue, which is approximately 25% of the total, increased by 9.5%. The latter included a 54% hike in e-commerce revenue.

In other earnings news, La Quinta Corp. reported second-quarter earnings of $145 million, up 8% from the same time last year. Revenue per available room was $41.33, up 9%. La Quinta, which recently acquired Baymont Inns & Suites, added eight hotels to its inventory during the second quarter. It expects open a total of 50 hotels by year's end.

Orient-Express Hotels reported that second-quarter net earnings rose 37%, to $12.9 million, on revenue of $104.2 million.

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