A day after the online travel company posted a disappointing quarterly profit and signaled a slowdown in revenue in the current quarter, TripAdvisor Inc.’s (TRIP.O) shares fell around 19% in premarket activity on Tuesday.
Before the bell, shares of the corporation were trading at $19.17, and they were expected to start the day at their lowest level since August.
The third quarter’s sales growth was reduced by around 11 percentage points from the same period last year due to currency movements, particularly in the euro.
TripAdvisor’s earnings were also negatively impacted by higher marketing costs; the firm reported an adjusted profit of 28 cents per share for the third quarter, below the average estimate of 38 cents per share among analysts, according to Refinitiv data.
In order to take advantage of the post-pandemic surge in tourism, U.S. travel booking companies are investing extensively in marketing to encourage more people to book flights and lodging on their apps and websites.
The business said it anticipates marketing expenditures in the fourth quarter to pay off next year. TripAdvisor’s selling and marketing costs increased 58% to $234 million during the quarter.
The company also warned that its sales growth from the third quarter is expected to be in the low-single digits when compared to 2019 levels.
The projection comes after Airbnb Inc (ABNB.O), a provider of vacation rentals, said last week that holiday-quarter income could not meet market expectations because of pressure from a strong currency and lower-than-expected reservations.
Due in part to ongoing demand for travel and eating, the firm also outperformed sales projections. In comparison to Expedia Group Inc (EXPE.O), Booking Holdings Inc (BKNG.O), and Airbnb Inc (ABNB.O), whose shares have lost between roughly 24% and 50% this year, its shares have decreased by around 13%.
