Digital Transformation

Expedia dismisses Airbnb threat as ad revenues jump 23%

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By Natalie Mortimer | N/A

October 31, 2015 | 3 min read

Travel company Expedia has downplayed the threat from Airbnb saying that the ramifications of the room-renting behemoth have been "immaterial at this point".

Speaking on an earnings call earlier this week Expedia president and CEO Dara Khosrowshahi told investors that Airbnb has had no effect on the business given it's appeal to a different share in the market.

"We don't see it in the business, it is not affecting us directly at all," he said. "If anything we think that Airbnb may be getting a new class of consumer into travel. It is typically a lower price point, it appeals to millennial's and we think that, based on different occasions, sometimes some consumers will opt for rental type inventory and sometimes they will opt for hotels and we think the hotel product is a great product and it certainly shows up in our numbers."

The company posted $15.4bn (£10bn) in bookings for the three months to 30 September, a rise of 21 per cent compared to the same period of last year.

Meanwhile advertising and media revenue increased by 23 per cent year-on-year to $538m.

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While Khosrowshahi was confident that Airbnb's growing popularity has yet to harm Expedia he did reveal that it could put pressure on pricing going forward and that the company will add more apartment-style accomodation to its portfolio in the coming years.

"It is adding supply into the market, into the lodging marketplace. And that supply is addressable to a certain portion of the population. So our belief is that it will put pricing pressure in certain markets where you see a significant amount of Airbnb inventory.

"It is clearly product that is important for a certain group of people, so we will look to build out our rental product over time. First order of business is the traditional hotel product, but we're adding apartment type product and we will continue to add it. I think incrementally it will become a more important part of our mix next year and going into the following years.

Revenue at Expedia jumped 16 per cent to $1.94bn from $1.66bn.

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