Alan Pickerill - Investor Relations Dara Khosrowshahi - Chief Executive Officer Mark Okerstrom - Chief Financial Officer and Senior Vice President of Corporate Development.

Justin Post - BofA Merrill Lynch Naved Khan - Cantor Fitzgerald Brian Fitzgerald - Jefferies & Co. Eric Sheridan - UBS Ross Sandler - Deutsche Bank Michael Millman - Millman Research Associates Andrew Boone - JMP Securities Rohit Kulkarni - RBC Capital Markets Kevin Kopelman - Cowen and Company.

Good day and welcome to the Expedia Fourth Quarter 2014 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Alan Pickerill. Please go ahead, sir..

Thank you very much. Good afternoon, everybody. Welcome to Expedia Inc.'s financial results conference call for the fourth quarter and full year ended December 31, 2014. I'm pleased to be joined on the call today by Dara Khosrowshahi, Expedia's CEO and President; and Mark Okerstrom, our CFO and EVP of Operations.

The following discussion, including responses to your questions, reflects management's views as of today, February 5, 2015 only. We do not undertake any obligation to update or revise this information.

As always, some of the statements made on today's call are forward looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements.

Please refer to today's press release and the company's filings with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements.

You'll find reconciliations of non-GAAP measures to the most comparable GAAP measures discussed today in our earnings release, which is posted on the company's IR website at ir.expediainc.com. I encourage you to periodically visit our Investor Relations site for important content, including today's earnings release and an updated investor deck.

Finally, unless otherwise stated, all references to cost of revenue, selling and marketing expense, general and administrative expense and technology and content expense, exclude stock-based compensation and depreciation expense and all comparisons on this call will be against our results for the comparable period of 2013.

With that, I'll turn the call over to Dara..

the core OTA group, eLong, Trivago and Egencia, each of which has its own market opportunity, good drivers, competitive dynamics and ultimately value creation potential.

Our core OTA group is led by our two flagship global brands, brand Expedia and Hotels.com, and also includes regional or segment brand leaders such as Hotwire, Venere and CarRentals.com in our affiliate business and now Travelocity and Wotif.

Over the past several years, we've made significant investments and improved our execution across our online marketing platforms, customer facing technology and supply facing platforms. And while the work is never done, this business is performing well and we are seeing the benefits show up in our operating results.

On a combine basis, our core OTA business generated approximately $43 billion of gross bookings in 2014, up about 30% year-on-year. This growth is significantly faster than the industry and we believe we are gaining market share in every major geography.

Additionally, we are finding key commercial deals and acquisitions that enable us to leverage our existing technology and operations infrastructure to amplify our growth, such as the deal to power and now own Travelocity, and the acquisition of Wotif.

Our platforms and operational processes now allow us to acquire businesses, integrate them predictably and quickly, and realize meaningful synergies while creating improved experiences for our customers and our supply partners.

As the performance challenges we've seen at Hotwire demonstrate bumps in the road will always arise in this highly competitive segment. However we believe we’re executing well and are positioned better than ever.

Staying with the theme of challenges, eLong incurred a $27 million adjusted EBITDA loss in Q4 as the highly competitive environment that we talked about during our last call was more than true. We manage our 65% eLong stake independently, and eLong has its own capital so we are not making trade-off investments in other businesses to fund eLong.

While we aren't counting on the competitive environment getting any better in 2015, we know that the market opportunity in China is huge, we're confident in the execution capabilities of the eLong team, and are very confident that we're building real value there.

As is true in any geography in which we compete, we aren't dogmatic about our approach and will drive towards one simple goal, long-term value creation for Expedia shareholders. Turning to Trivago, we've owned a majority stake in Trivago since March of 2013 and the business continues to grow at impressive rates.

If you watch any TV at all in the US, you've no doubt seen the Trivago guy pitching the site as an excellent place to find the ideal hotel at the best price. On a standalone basis for the full year, Trivago generated revenue of over $410 million, up 68% year-on-year and EBITDA $4 million.

Note that this includes revenue from all of the other Expedia, Inc. brands. Our focus for Trivago has been on growing the top line rather than profitability and we've been reinvesting profits from core markets at Trivago to fund worldwide expansion.

While we expect Trivago to generate adjusted EBITDA growth in 2015, we will continue to trade-off near-term profits for long-term value. Turning to Egencia, we have a terrific corporate travel business here, which exceeded $5 million of gross bookings in 2014.

Egencia is growing at healthy rate signing up new business at a fast pace, while integrating platforms in key acquisitions over time. With this business, we're mostly focused on industry disruption, bringing more new products and services and better technology to corporate customers.

And although they remain much larger than Egencia, we see the big legacy players on their back foot trying to figure out how they deliver technology and tools to compete effectively with Egencia and other online offerings.

We believe this business can grow nicely on an organic basis, but we will continue to look opportunistically at acquisitions to accelerate growth and further scale the business over time. In closing let me say this, while we celebrate a job well done in 2014, we are by no means standing still.

Our products and service, while better, have miles of improvement ahead of them. You won't find a single person across Expedia, Inc. who tell you that we are executing to our full potential, but we are finally seeing the arc of the possible. With that, I'll hand it to Mark..

the core OTA group, eLong, Trivago and Egencia.

In this regard we will break up the results of these four businesses beginning with the first quarter of 2015, so that our investors can have the appropriate level of visibility to be able to model a specific value reflecting the unique opportunities and valuation considerations inherent in each business. With that, let’s move to Q&A.

Operator, will you please remind participants how to ask questions?.

[Operator Instructions] And we’ll take our first question from Justin Post with Merrill Lynch..

Great. Two questions. First, EBITDA guidance, 10% to 15%, how much will the acquisitions of Wotif and the Travelocity deal help next year on your outlook? And then since it looks like you're pushing people looking at the four divisions separately, could you just go through the EBITDA for each group in 2014? Thank you..

Sure, Justin. So first on guidance, again I would just remind everyone that the 10% to 15% does include 500 basis points of FX headwind. With respect to your specific question on acquisitions, couple of things I would just note.

We certainly are expecting to get a year-on-year help from those acquisitions, but a lot of the numbers that are available publicly are probably not the best source to look at for the purposes of coming up with those estimates.

When we acquired Wotif that was a business that was facing some pretty significant challenges, again it's going to see pretty significant FX headwinds as we move through 2015 and we are also in the middle of an integration and we don't expect to see a meaningful uptick in the performance of Wotif until we get that business onto our platform.

Now we are making progress on that, we moved international traffic onto the brand Expedia platform in January, we do expect to get the rest of the business onto the platform in the first half of 2015.

But in the meantime, you got a business that is undergoing a very significant restructuring on a base momentum that is declining and so you've got a bit of a headwind certainly versus what you would have seen more publicly available.

Travelocity, we do think that there could be some upside there, it's very difficult for us to put the precise value on that for you right now. It's really going to depend on how effective we are in really marketing this business. The Travelocity business didn't spend a lot of money on brand advertising in 2014.

That is something that we are going to want to do very likely to reinvigorate that brand, which is a great brand. So I think the acquisitions are going to be a tailwind, but I wouldn't rely on public numbers.

Lastly I would just say that our philosophy is one where our EBITDA outcome is one of careful management and one of careful decisions around what upside we see and what investments do we have available to us to drive medium and long-term growth.

And so – but we do have some tailwinds from acquisitions and we did have some last year for Travelocity, we are constantly looking at investments that we can make that respect the EBITDA guidance and the EBITDA target that we set for ourselves, but also set ourselves up for more sustained growth.

So with the respect to EBITDA, let me just go through the numbers for you. So for eLong, the EBITDA for full year 2014 was $27 million loss, okay; for the Egencia business, its $60 million; for Trivago its $4 million; and then you can back into the core OTA business with the rest..

We will go next to Naved Khan with Cantor Fitzgerald..

Yes. Thanks for taking the question. A lot of macro concerns out of Europe as well as Russia. Can you guys speak to the business trends that you might be seeing in those markets? And then I have a follow-up..

We are certainly seeing, I would say, the more significant trend that we see in those markets is the foreign exchange trends. So when you look at our revenue per room night for example, the revenue per room night for international was down significantly more on a year-on-year basis than domestic.

Europe is a part of that, but frankly Asia-Pacific is a part of that as well, the foreign exchange trends on a year-on-year basis are significant. And if nothing changes and at this point we don't anticipate anything changes, changing, it will continue to be significant as we go through the year.

As far as the relative strength of the European market et cetera, one trend that we have observed is that due to the strength of the dollar, we are seeing are lower balance of European demand coming into the US, because the US looks more expensive.

In general, we are seeing stronger demand from the US to Europe and I think in general across Europe and APAC we are seeing higher concentration of demand locally, now part of that is because we have better local supply and I think we got better local marketing, but in general our domestic room night growth in most territories exceeds international room night growth.

We think it's a good trend, it hurts ADRs and hurts length of stay, but we think it's very, very positive factor in our growing business on a global basis..

Okay. That's helpful.

And then just a follow up, now that you guys will be owning and operating Travelocity and Wotif, at Expedia what changes do you expect to make to the marketing and to audience reach?.

I think it's a little bit too soon to make that call. What we have seen with Travelocity for example is that conversion rates for hotels for Travelocity on the Expedia platform are higher than the conversion rates that they have previously, it's a combination of the quality of supply and quality of product and technology that we have.

With Travelocity in house, the Travelocity team will have kind of the full profit dollars invest in order to drive growth, for example, in variable marketing. So I think we will have the ability to invest more aggressively in variable markets.

We haven't quite figured out exactly what our strategy is and how we set up the P&L for the long term, but we certainly have that potential. Wotif we are really in the middle of an integration as we speak, we are going to take the Wotif side, put it on the brand Expedia platform, but really its heads down working on that integration.

Once we get it onto the Expedia platform we see how it responds, we understand what the conversion rates are et cetera, we will start making marketing decisions. We're just not there yet..

That's helpful.

And then just on Wotif, I understand the entities on the revenue side but what is the low-hanging fruit when you look at the cost synergies there?.

I think the low-hanging fruit is on the technology and platform side.

We can put them on the brand Expedia technology, they don't need to maintain totally separate stack, we bring them all the benefits of the global tech stack that we have, then the testing and learning that we are constantly doing and the Expedia global tech stack benefits from additional volume that Wotif brings to it.

I think another piece of low-hanging fruit is the supply, Expedia, Hotels.com, et cetera, customer now was going to get out to us to the terrific Wotif supply in Australia and New Zealand marketplace and Wotif customers are going to have access to much better global supply for their out bonds.

So we are really looking to get the best of both worlds on the technology side and then really we are finding also lots and lots of talent and people within the Wotif organization, on the supply side, on the technology side and we think bringing their talent together with our talent you are going to have a net positive..

We’ll go next to Brian Fitzgerald with Jefferies..

Thanks, guys. A couple questions.

Have you seen any tangible impact on travel from the declining fuel prices? And based on your experience, when do you expect any potential savings to trickle down and start to impact travelers, if you have a point of view on that? And then really quickly on the advertising side, the Captain Obvious campaign, quite successful.

But off-line ad channels tend to be lower ROIs.

And so now that you've anniversaried the launch a bit, can you give us some color in terms of impacts on new customer growth, retention, repeat rates, et cetera, from Captain Obvious?.

Brian, just on the lower oil prices, we haven't seen any profound impact, it's going to take the airlines a while to actually put that through on average ticket prices and it's doubtful they will put all through and that would be one of the things that drove increased travel pattern.

The other thing is just more disposable income for consumers and we've seen estimates of anywhere from $500 to $1000 extra in the pockets of the average American household. And on a typical trip, hotel stay part of that trip, it will be around $300, so that could actually drive more volume and more consumer demand around the world.

It's not something that again that we've seen right now, but we are optimistic that could be tailwind in 2015 perhaps to offset some of the headwinds we are seeing from FX.

And Doro, do you want to take that?.

As far as Captain Obvious goes, it's been a very, very successful campaign for us. And if you look at Hotels.com in general, the trend in room night growth for Hotels.com has been consistently positive and improving. Q4 room night stays for Hotels.com have been higher than they have been really all your this year and last year.

So the trends at Hotels.com continue to be very strong and the trends at Hotels.com domestically are very strong as well. And we see new customer acquisition growth in general increasing and because of the Welcome Rewards program for Hotels.com we see very strong repeat rates.

Welcome Rewards now has over 15 million members on a worldwide basis and essentially the Hotels.com model bringing in new customers, introducing them to the Welcome Rewards program, serving them very, very well and then keeping them and having them repeat is a formula that's working quite well for us and it's something we want to build on..

And we’ll go next to Eric Sheridan with UBS. Please go ahead..

Thanks for taking the questions. Two bigger-picture strategic questions, one with respect to China. Obviously, understand the point that eLong is a separate entity and you're not necessarily giving it capital today.

But how do you think about the role eLong might be able to play if the market in China consolidated and how you could redeploy that capital into other areas of the business if that opportunity presented itself versus the opportunity for eLong as a standalone entity long term? And second one you've obviously done a fair bit of acquisitions over the last 18 months in the OTA space broadly with Wotif and Travelocity.

What do you think the pathway forward is to do more acquisitions in the OTA space, especially to leverage on some of the technology investments you made over the last couple of years? Thanks, guys..

As far as eLong goes and redeploying capital et cetera, we are not short on capital, right, this is the business that grows off of $1 billion of free cash flow, eLong has plenty of capital, they've got over $300 million in cash and the reason why we are saying we are not trading of eLong investments against other investments is because we don't have to.

So we will disclose them to you and from our standpoint we are very confident of the eLong team, they have built a big, big business that and we think that eLong will be very creative for Expedia shareholders over a period of time and we are just heads down on maximizing that value from a long-term perspective.

As far as acquisitions go, acquisitions are a part of our game plan. We've had a number of acquisitions over the years and I would say that our technology platforms now and our operating practices now are at a different level where we are good at and have a very strong practice at bringing in and consolidating acquisitions and realizing synergies.

We have our hands full with Wotif and Travelocity, but the travel market is enormous, it's $1.3 trillion travel market, we're one of the biggest players out there with only $50 billion less than 5% of that market and we do think that consolidation is going to continue.

We think that the big global players in general are going to gain share and we will look for consolidation opportunities if they make sense for our shareholders and if they give us a higher return then buy back our own stock..

And we’ll go next to Ross Sandler with Deutsche Bank..

Thanks, guys. Just on the guidance question, maybe not talking about the contribution from Wotif, Travelocity, but can we just talk about what is baked in, in terms of organic growth in the core franchise relative to the 18% or, call it, mid teens ex Travelocity in 2014? And then a question on the unit efficiencies.

Given the trends with revenue per room night, and then the marketing spend that's flowing through Trivago, is the right way to look at the growth rate of marketing or direct marketing relative to your room night growth? Or how do we think about the rate of marketing deleverage, how much of that is Trivago versus some of the contra revenue items you mentioned versus just industry dynamic? Thanks..

Sure. On guidance, listen, I would say that I would think about our guidance as being largely an organic story, again we will get some helpers from the – for those acquisitions, we got harder headwinds this year just lacking over the Travelocity acquisition.

So the guidance I would take as really representing strength in the core of the business and not a lot a net help from anything other than that.

With respect to unit trends and sales and marketing deleverage, again we are deleveraging sales and marketing essentially for what we think are really great reasons which really two major drivers, one is that we are just having much more success in variable marketing as we continue to improve the conversion on our website and we are getting much, much better and that on a global basis.

And of course, no matter how efficient those channels are, there are always going to be more expensive than freak, which is what the direct type of traffic is. And so when we are driving growth in the channels in which we are right now, you're going to continue to see deleverage on the P&L there.

Secondly it's just global expansion and of course that's happening across all of our brands, we continue to push into international markets on a more aggressive basis and those markets, even though themselves get efficient, more efficient over time, they are generally less efficient than ever core domestic market. So those are the big drivers.

Trivago is certainly a piece of it, but I think now you will see in 2015 we are completely clear of that acquisition. So we've got clean comps and that wasn't the case for all of 2014, we had a tougher comp in Q1.

They are going to continue to be a driver, but really it's the core business that's driving a lot of that story now that we are annualizing over the Trivago acquisition.

In terms of how to look at it, I think looking at direct sales and marketing per room night is a decent way to look at , a lot of for the marketing spend does go against our hotel business. I think you will be able to back into a number that at least approximates what you think Trivago spends on marketing, you could back out and estimate on that.

But I think that could give you a reasonable way to look at it on a go forward basis..

We’ll go next to Douglas Anmuth with JP Morgan..

Hi, good afternoon, everyone. Thanks for taking the question. This is [indiscernible] on for Doug. We were wondering if you could provide more color on the big gap between the 28% hotel and room nights growth and the 15% hotel revenue growth. Obviously FX is part of it but could you help maybe walk us down from 28% to 15%.

And how much of that was maybe going to supply and promotions, and if you expect that to continue. Thanks..

So by and large the biggest driver there was foreign exchange trends, about 500 basis points of that 1000 basis point, or 1500 basis point delta came from that impact. I will say a portion of that is hedged off and it's in our other income item, but if you're looking at just hotel revenue, it's not in their number.

The other drivers are just very consistent with what we've spoke about on prior quarters.

One is that we continue to adjust our hotel margin to make sure that we are competitive for the local market conditions and that's pretty important for us as we continue to aggressively build our hotel count and really drive for great rates and availability with our hotel partners.

Secondly is the impact of our loyalty programs and Doro mentioned Hotels.com, Welcome Awards program, been very successful, more and more of the Hotels.com business is really coming from that repeat loyal user base.

It's nicely efficient for us on our adjusted EBITDA basis, but in our P&L, it's showing as a contra revenue item as supposed to sales and marketing and that puts pressure on the metrics as well. And then also call it that bucket of loyalty is couponing and discounting that we do from time to time..

We’ll go next to Michael Millman with Millman Research Associates..

Thank you. I want to go back a little bit regarding the currency on actual travel.

Could you talk about the numbers in terms of profitability or revenues from maybe more US traveling to Europe? Europe staying in Europe? What this might also mean in terms of places like Russia that has poor currency situation? Any help would be very beneficial in quantifying some of these..

I think I will try to be helpful, but there are so many crosscurrents in general and currencies, now we are close to 70 countries, I don't know how many countries we operate in, there is no simple answer, I'm going to try a simple answer to your question.

In general, the volumes that we see from the strength of volumes from the US to international markets and US is about 50% of our volume, is offsetting the weakness of international markets coming to the years. In general, those two are offsetting in big picture terms.

We are seeing significant negative headwind is, foreign exchange, we are seeing for example, average daily rates this year being negative because of foreign exchange, that's the translation of the foreign currencies to US dollars.

And in general we are seeing more domestic travel on a worldwide basis, so our Russian volumes are more staying within Russia, and almost every single country we are seeing more travel locally, part of this is because of our expanding supply and becoming more relevant to local customers, and part of it we believe are because of uncertainty around currency movements et cetera.

So currency is going to be a pretty significant headwind for us for the year, we baked it into our numbers so to speak, but we know it will be a challenge..

So, I assume that US hotel stays, more profitable for you than Europe hotel stay.

If the numbers may cancel out, does the bottom line cancel out?.

I would generalize the international hotel stay is the most valuable because it tends to have longer length of stay, it tends to have lower cancellation rates. On a year-on-year basis, you're right, because of the dollar US stay this year is going to be stronger than international stay.

And it's that foreign exchange that's putting a lot of pressure on some of those international stays, which is a headwind. That's a net headwind and it's going to hurt our finances going into 2015, so we have worked it into our forecast..

And switching to the oil prices, are there some places that the economy's been hurt so badly that it's affecting travel?.

You know what, once we are starting to see the signs of the impact of oil prices, we think is in the Nordic region and we've got a pretty big business in the Nordics under our Egencia business and we can see some signs of weakness there. And then certainly our Hotels.com business has got a really big presence in the Nordics.

So far the volumes look decent, but the Norwegian currency has just taken a pretty significant hit recently, so on an actual dollar basis, it looks a lot worse. And that can persist for only sometime before you start to see some impact on leisure travel.

So we're starting to see some signs, we're not exactly tied to oil and gas, there are certainly some FX issues there. But certainly there is something there..

We'll go next to Ron Josey with JMP Securities..

Hi, guys. Thanks for taking my question. This is Andrew Boone on for Ron. Just a quick question on Wotif. How long do you expect it to take to implement new Expedia's new booking tool at Wotif? I know you guys said 1H, but any more clarification there. And then just wondering if you guys are planning on continuing to charge a booking fee. Thanks..

Sure. As far as the implementation goes, we are going to move over gradually. So for example, if you perform an international search on Wotif, that is already being covered by the Expedia technology platform.

So we are making the front end technology implementation as we speak, but more importantly we are also integrating the supply platform and recontracting with some of the Wotif hotels. So it will be sometime in the first half, my guess it will be sometime in the second quarter, we can't be more exact than that.

As far as booking fees et cetera, we haven't made final plans there. So nothing to speak of at this point..

I would just add a quick point that if you just look back to the Travelocity implementation as well that once we get the business on to the new platform, there is also a period of optimization that you go through in sales and marketing and just on the site as well. And that optimization process will continue even through the second half of 2015.

So just keep that in mind as well..

And then when Mark was talking about the technology cost, for example, we are essentially paying double technology cost right now, we are integrating the Wotif technology at the same time the Wotif stack is up and running, so that relates to some of the trends that Mark talked about in his guidance..

We’ll go next to Mark Mahaney with RBC Capital..

Great. Thank you. This is Rohit Kulkarni filling in for Mark. Just a big picture.

Can you talk about how you are viewing your auxiliary or octagonal travel opportunities, be it vacation rentals or any new services, incremental services to travelers or hotel? And as a sub question, can you provide any updates or color around how your Home Away relationship is progressing?.

Sure, I'll say Rohit, we're very focused on our base business and we have more than enough on our plate. And we are very comfortable that the business is that we are in now, the core OTA business, the corporate business, the Wotif business, eLong in China, all have very long runways ahead of them.

So right now, we are pretty squarely focused on the businesses at hand. Now, we are testing and learning. So for example, we're certainly testing and learning with Home Away, we are getting more and more bookable properties on to Expedia, we are giving the Home Away inventory more exposure.

And at this point we don't have a final call on what it means, but it looks like the inventory is certainly attractive and it just looked like certain segment of our population and customer base likes that inventory and appreciates our showing them that inventory.

At the same time, one new area that we are working on and I think in much better at is to upsell various parts of travel to our customers, so when a customer comes into by an Expedia air ticket, I think we are getting much better about upselling a car or upselling destination services, ground transport to that customer, ticket to a theme park et cetera.

So all of these other travel opportunities, many, many of them are opportunities that we are servicing now and our focus is how can we cross sell those customers more stuff because those cross sell is typically our very, very high margins because you don't have to kind of reacquire those customers through third-party channels.

So we certainly want to [indiscernible] but it's within the set of products that we are offering now and we are seeing very, very good experience there. Our are attached type revenue growth for us is really at record highs and we think there is much, much more to go..

Okay. And if I could ask one more. Any view on a lot of market cap is created in the private markets and the sharing economy space in particular.

Do you have any view on whether you view them over the long term over the next two, three years as a potential partner or something that you would need to have a product in that particular space?.

I think we will look to partner up for that product at this point, obviously things may change, we may have a different viewpoint.

For example, Home Away is an example of, well, it's not sharing product to some extent, it is a rental product, it's people sharing in one way and we are testing and learning actively and have 150,000 Home Away properties now offered on Expedia and understanding what the best treatment of that kind of inventory is.

So we will be actively testing and learning, with think it will continue to be a compliment of our services and we will look to build those partnerships over time..

And we’ll go next to Kevin Kopelman with Cowen and Company..

Hi. Thanks. First, could you talk a little bit more about your investment in supply It looks like you added, I think, ex eLong, maybe about 7,000 hotels this quarter and 5,000 last quarter.

Is that a pace that you are happy with? And what do you expect that to look like going forward?.

Sure. We continue to, I would say, accelerate our acquisition of hotels. So you did observe an uptick. When you look overall on a year-on-year basis, we ex eLong for example, we increased our supply base by a little over 10%, which is not as fast as our room night growth. So we're sending more concentrated supply into our set of hotels.

I think if you look forward to 2015, we do expect the year-on-year pace for new hotels added to the system to accelerate..

Okay. Thanks. And then just to follow up on the previous question, I think it was about vacation rental, just to clarify, you are saying you would rather partner in vacation rentals, in general, than build it out yourselves..

Listen, I think it's too soon to tell. We are – really what we're working on right now is building up our core hotel inventory and in general we will look to augment that in inventory and partner up with additional inventory that creates value for our customers.

If we find that there is a particular inventory type that's highly attractive that we should secure directly, we will look to do that. But at this point it's not a core part of our strategy..

We have over the course of last number of years actually done some direct contract in vacation rentals around ski and deep destinations and of course we are concentrating that in areas where it's professionally managed online bookable, and really the only change of the story here is that we're testing with stuff that's a little bit more by owner and to the extent it works.

We've got expertise in being able to market that on our websites..

[Operator Instructions] We’ll go next to Heath Terry with Goldman Sachs..

Is there another question operator?.

There are no further questions at this time..

Alright, let’s wrap it up. Thanks everybody for joining the call today. The replay will be available on the IR site shortly.

Dara, any final closing comments?.

No, just thank you for joining us and big thanks to the Expedia, Inc. family for really, really good year and big welcome to the Travelocity, Wotif group et cetera. We’re really excited about building these brands and building these assets with you. Thank you..

Ladies and gentlemen, this does conclude today’s conference. We thank you for your participation..