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TripAdvisor and Expedia stocks plunge

By Lawrence Gash

CEOs cite Google as major cause of recent difficulties

Two of America’s leading travel websites have seen their stock price plummet after disappointing Q3 earnings.

Expedia stock has plunged in recent days, from $135 to as low as $98.15. The travel giant missed both its profit and revenue estimates by significant margins for the third quarter of 2019.

Intensifying competition from other providers and pressure on pricing at airlines, hotels and car rentals have been responsible. Expedia executives have revised guidance for 2019 EBITDA growth from between 12 and 15 per cent to between 5 and 8 per cent.

TripAdvisor saw a similar selloff at the end of the week, dropping over 20 per cent on Thursday alone, briefly dipping below its worst level since 2012 of $29.50.

The company missed analyst consensus estimates for Q3 earnings by 12 cents. Reported earnings were down 19.4 per cent on the same quarter last year at 58 cents per share. Q3 revenues similarly missed analyst estimates by 6.2 per cent at $428m.

The CEOs of both companies have blamed Google’s search policies for their recent poor performance. Head of TripAdvisor Steve Kaufer said this week: “We believe our most significant challenge remains Google pushing its own hotel products in search results and siphoning off quality traffic that would otherwise find TripAdvisor via free links and generate high-margin revenue in our hotel click-based auction.”

Mark Okerstrom, CEO of Expedia was more resigned to Google’s continued impact, observing: “I think it’s just the reality of where the world is in the Internet, and the importance of Google at the top of the funnel.”

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