Investors have sold shares in US travel sites, after downbeat quarterly results in the sector fuelled concerns over fading demand and competition from the likes of Airbnb.
Expedia and TripAdvisor cited weak online search and advertising trends when they widely missed third-quarter earnings forecasts on Tuesday evening. Expedia, whose portfolio includes Hotels. com and Trivago, said it spent more on advertising as links to its sites fell in the rankings of search results. TripAdvisor cautioned that its outlook for 2019 has been damped after recording softness in its business of auctioning off advertising to hotels.
Shares in Expedia tumbled 25 per cent on Wednesday, potentially its worst single-day loss in more than six years. TripAdvisor shed one-fifth of its value to near two-year lows. The sell-off also spread to Booking Holdings, which dropped more than 7 per cent ahead of its own earnings report due after the market closes. Yelp, the site known for its customer reviews of hotels and restaurants, was down 4.5 per cent. – Copyright The Financial Times Limited 2019