Shares fell 5% in after-hours trading as the company warned that spending would continue to grow at Expedia's eLong Inc. affiliate in China. ELong's losses have widened as the website spends more on sales staff, marketing and discounts to lure travelers in the world's most populous nation.
Expedia's overall profit fell to $66 million from $95 million, stung by an upswing in marketing costs and foreign exchange expenses as the online retailer converted bookings made abroad into dollars, which have climbed in value over the past year.
"As competitors started to ramp up their efforts, there was a little bit of a slowdown" in China,
Expedia Chief Financial Officer Mark Okerstrom said in an interview. He said the company remains committed to growing its share there.
Expedia has spent the past year amassing brands in an effort to add new customers. The company in November closed a 703 million Australian dollars ($612 million) deal for Australia's Wotif Holdings Ltd. In the U.S., the company recently agreed to buy Sabre Corp. 's Travelocity brand for $280 million.
Asked about the company's interest in adding Orbitz Worldwide Inc., another prominent U.S. competitor, Mr. Okerstrom said the company was still working on integrating the product of its latest shopping spree.
"We've got a track record of being an acquisitive company, but we've got our hands full right now," he said.
Launched in 1996 by a small division within Microsoft Corp. , Expedia went public in 1999 and has since grown into a travel giant. Among the brands in its portfolio are Hotels.com, Hotwire, eLong Inc. and Trivago.
The travel industry is under pressure from new players, such as referral sites, such as Kayak and Hipmunk, that search multiple sites and startups that offer unpublished discounts and stays in apartments and spare rooms. Travel websites have responded by offering more discounts and loyalty programs.
Source: Wall Street Journal | Photo: China Daily
from China Travel & Tourism News http://ift.tt/1iB6EFm
Put the internet to work for you.
No comments:
Post a Comment