Hotel revenue problems at Expedia and Hotels.com
Internet conglomerate IAC/InterActiveCorp, owner of Expedia and hotels.com margins continues to decline. Will change hotel.com’s focus.
In the first quarter, gross bookings on Expedia rose 29 per cent to $3.44bn, while bookings on Hotels.com fell 2 per cent to $483m.
In releasing these results, IAC said the US discount hotel business faces a “challenging environment” due to increased competition from third-party distributors, hotel chains promoting their own websites and higher occupancy rates. IAC expect these trends to continue.
Having hit some bumps in the past several quarters, IAC stock has fallen nearly 20 per cent due to investor concerns of declining margins from hotel and flight sales and continuing doubts about future growth prospects.
These trends have lead IAC to revamp Hotels.com to specialize in reviews and editorial content rather than discounts.
Business from its international travel websites helped offset declines in the US.
Meanwhile, IAC continues its preparation to spin off its travel business as a separate, publicly traded company under the Expedia brand.
Charles Kao
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