TripAdvisor revenue falls as referral revenue drops

[BENGALURU] TripAdvisor Inc's quarterly revenue fell 3 per cent, missing analyst estimates, as a rise in hotel bookings on its websites hurt revenue from referrals to third-party sites.

TripAdvisor has been allowing users in the United States and the UK to reserve hotels directly on its websites since 2014, charging hotels a fee for the bookings. The feature was rolled out globally in the first quarter.

The company, whose profit also fell more than expected, said on Wednesday that referral revenue dropped 13.3 per cent to US$189 million in the quarter.

TripAdvisor said total costs and expenses rose 13.6 per cent to US$310 million in the quarter.

TripAdvisor-branded display-based advertising and subscription revenue, which includes display ad and subscription-based revenue, rose 11 per cent in the period.

The company's net income fell 57 per cent to US$27 million, or 18 cents per share, in the first quarter from US$63 million, or 43 cents per share, a year earlier.

Excluding items, TripAdvisor earned 32 cents per share, far short of the average analysts' estimate of 46 cents, according to Thomson Reuters.

Revenue fell to US$352 million from US$363 million, missing the average estimate of US$370.5 million.

TripAdvisor's shares were down 5 per cent at US$60 in after-hours trading. Up to Wednesday's close, the stock had fallen nearly 23 per cent this year.

The company's results follow those of larger travel website operator Expedia Inc, which posted a surprise first-quarter profit last week, helped by acquisitions of Orbitz Worldwide Inc, Travelocity and HomeAway Inc.

REUTERS