TripAdvisor shares fall as rising costs hit trading

TripAdvisor shares fall as rising costs hit trading

Weak hotel revenue and rising marketing costs hit TripAdvisor’s fourth-quarter results.
Shares, which have fallen 11% in the past 12 months, dropped by 5.3% to $49.41.

Hotel sales fell 3.1% to $252 million in the three months to December 31, while selling and marketing expenses climbed 18.6% to $172 million, although total expenses eased 8.4%.

Chief financial officer, Ernst Teunissen, said: “As expected, our significant investments in these growth initiatives dampened full year 2016 financial results.

“However, we believe we turned a corner in the fourth quarter, as growth rates improved, led by the US.

“In 2017, we are prioritising revenue growth as well as making the investments necessary to drive monetisation, growth and profitability on our platform.”

The company reported a profit for the quarter of $1 million down from $3 million a year earlier.

Profit for the full year fell by 39% to $120 million over 2015 as revenue declined by 1% to almost $1.5 billion.

Average monthly unique visitors reached 390 million during the peak summer travel season, up 14% year-on-year.

User reviews and opinions grew 45% to reach 465 million at the end of the year covering about 1,060,000 hotels and other accommodation, 835,000 holiday rentals, 4.3 million restaurants and 760,000 attractions and experiences.

Chief executive, Steve Kaufer, said: “2016 was an important transition year and one of great progress towards creating the best user experience in travel.

“We rolled out hotel instant booking globally and strengthened our position in attractions, restaurants and vacation rentals.

“With our price comparison and booking capabilities in place, we are focused on raising consumer awareness of TripAdvisor as a great place to go to price shop and book.”

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