Travel review website operator TripAdvisor Inc reported better-than-expected quarterly revenue and profit as more users reserved hotels using a new system that allows direct bookings from its website.
The results follow a strong showing by online travel company Expedia Inc and indicate that travel demand in key markets such as the United States and Europe was resilient despite concerns of slowing global economic growth.
TripAdvisor’s shares surged as much as 19 percent to $64.72, registering their biggest intra-day percentage gain in more than four months.
Expedia, the world’s largest online travel services company by bookings, forecast on Wednesday a steep rise in 2016 earnings. The company’s shares were up about 10 percent on Thursday.
Despite global economic volatility, travel demand in the United States has not slowed and is holding up well, Cantor Fitzgerald analyst Naved Khan said.
TripAdvisor, which owns websites such as Tripadvisor.com and Oyster.com, expanded its instant booking feature to nine more countries during the fourth quarter and said it would be available around the world in the first half 2016.
The feature, introduced in 2014 in the United States and UK, allows travelers to book a hotel directly from the company’s website instead of being directed to third-party booking sites.
TripAdvisor’s display ad revenue rose 17 percent in the fourth quarter ended Dec. 31, but click-based advertising revenue, its largest, fell 1 percent due to a strong dollar.
Subscription revenue jumped 23 percent.
“We are seeing positive early signs of repeat usage. Hotel shoppers are increasingly returning to TripAdvisor to complete a booking that was previously attempted but abandoned,” Chief Financial Officer Ernst Teunissen said on a conference call.
TripAdvisor said it expects 2017 margins to expand as revenue growth recovers due to a global rollout of instant booking in 2016.
Excluding items, TripAdvisor earned 45 cents per share, compared with the average analyst estimate of 33 cents.
Revenue rose 7.3 percent to $309 million, topping the average revenue estimate of $298.7 million, according to Thomson Reuters I/B/E/S.
Reporting by Ankit Ajmera in Bengaluru; Editing by Don Sebastian and Saumyadeb Chakrabarty.