Expedia CFO claims Airbnb has had no impact

Shares of Expedia jumped nearly 13% to around $106.20 in after-hours trading yesterday, following the company’s quarterly earnings report. Expedia reported a Q4 loss of $12.5m, reflecting a 114% YoY decline, however, with bookings up 40% YoY to $15bn, the loss is seen more as a reflection of the company’s $3.9bn billion acquisition of HomeAway late last year. In the lead-up to the announcement, analysts had expressed concerns about the threat posed by Airbnb, but CFO, Mark Okerstrom, brushed that off, stating: “We haven’t seen any impact from Airbnb, but what we did see is an opportunity to expand into the traditional vacation rental market (HomeAway) and urban sharing economy that Airbnb has essentially created.”

While Expedia Inc. swung to a loss in the fourth quarter and some analysts have expressed concerns about the threat of sharing-economy businesses like Airbnb, Expedia said it actually benefits when the economy dips, and sees opportunity, not a threat, in Airbnb.

“We haven’t seen any impact from Airbnb, but what we did see is an opportunity to expand into the traditional vacation rental market and urban sharing economy that Airbnb has essentially created,” said Expedia Chief Financial Officer Mark Okerstrom in an interview with MarketWatch.

Shares of Expedia EXPE, -0.19% jumped nearly 13% to around $106.20 in high-volume after-hours trade on Wednesday, following the company’s quarterly earnings report.

The company reported a fourth-quarter loss of $12.5 million, a 114% year-over-year decline. With bookings up 40% year-over-year to $15 billion, however, the quarterly loss is more a reflection of the company’s $3.9 billion acquisition of HomeAway, which closed in December, and other costs related to the integration of Orbitz, which Expedia bought last year for $1.6 billion in cash.

Analysts have been concerned that travel-booking sites like Expedia, Priceline Group Inc. US:PCLN and TripAdvisor Inc. TRIP, +1.36% won’t be able to innovative fast enough to compete with the sharing-economy startup culture. In a note to clients last month, Goldman Sachs downgraded Priceline and TripAdvisor, citing concerns that travelers are using alternatives, such as Airbnb, to build their itineraries, and cut its price target on Expedia’s stock to $93 from $135.

““We haven’t seen any impact from Airbnb.” ” — Mark Okerstrom, Expedia CFO

However, Expedia, which already has more than 100,000 vacation rentals on its platform, said it is tackling the sharing economy through its acquisition of HomeAway. Okerstrom said the company is integrating HomeAway properties into the overall Expedia stack, including a broader integration of its vacation-rental inventory and transactional brands.

“It’s a way to tap into what we think is a really exciting new market,” said Okerstrom. “Our goal with HomeAway is to use the exceptional platform they have right now, and really transform it into a transactional business.”

HomeAway’s booking site looks similar to that of Airbnb, and it offers the same type of service.

Deutsche Bank also recently expressed concerns about the industry, notably about the effects of terrorism and the economy. Expedia’s annual EBITDA came in line with its guidance, but Okerstrom said Expedia would have likely beat estimates had it not been for the Paris attacks, which dampened vacation travel.

As for the economic problems, Expedia said that while the market does seem to be in a state of “extreme fragility,” the company’s bookings have actually been buoyed during past economic dips by declining oil costs, which tend to lower the cost of air travel. Last quarter, air revenue increased 61% on a 70% increase in air tickets sold, though revenue per ticket fell 5%.

“As macro conditions have weakened in the past, we’ve seen prices come down and consumers travel more,” said Okerstrom. Expedia is “certainly watching what’s happening very closely.”