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Expedia's Investments Are Reaping Benefits While The Company Displayed Steady Growth In Q2

Expedia's Q2 ended on a strong note. All the divisions performed well with Trivago, its metasearch engine (where it has a majority stake), crossed $1 billion in trailing 12-month revenues for the first time in its history. While Expedia invested in SilverRail technology in May, it announced a further investment yesterday in Indonesian OTA leader, Traveloka. This move might help the company to gain a stronger hold in Asia which it has been currently striving towards. Expedia enjoys around 75% of the online travel market in the U.S., however, its position in the emerging markets isn't so strong. Investments in rail ticket booking and Asian OTAs might be its way to gain a bigger part of those markets.

In Q2, Expedia's gross bookings rose by 12%, while its revenues, adjusted EBITDA, and room nights grew by 18%, 19%, and 21% respectively. The company's direct sales and marketing expense grew by 25% to $1.44 billion in Q2, the major chunk of which was spent on the Expedia brand and on Trivago. Expedia's acquired brands in the other segments, though a smaller part of the overall business currently, are growing significantly and showing signs of becoming major drivers of growth for the company in the future. The company aims to double its gross bookings through both organic and inorganic growth by 2020. Let's explore some of the performance highlights for the company in Q2:

Core OTA and HomeAway

The core OTA segment grew solidly due to a faster room night growth in all the important markets. The aggressive marketing campaigns seem to be driving the...