First Free Story (1 of 3)

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The Priceline Group in the first quarter of 2016 wrote down $50 million of the $60 million minority investment it made in Brazil-based Hotel Urbano last July, citing poor forecasts and the tumult in the Latin American country.

“In March 2016, the Company received an operating performance update from Hotel Urbano, which showed disappointing 2015 results, significantly reduced forecasts and the need for additional funding in the near term,” the Priceline Group stated in a Securities and Exchange Commission filing.

“This update combined with increased political turmoil, the declaration of a public health emergency related to the Zika virus and sustained poor macroeconomic conditions in Brazil in the first quarter of 2016 indicated a potential other-than-temporary impairment in the fair value of the Company’s investment.”

Brazil has been wracked by a recession and skyrocketing inflation over the last year. In addition, the country’s president, Dilma Rousseff, faces impeachment proceedings.

The Priceline’s strategic investment in Hotel Urbano meant that would be the exclusive hotel provider to Hotel Urbano for properties outside Latin America as Hotel Urbano competes against Argentina-based Decolar and other companies.

Expedia invested $270 million in Decolar in March 2015, taking a 16 percent stake, and so far has not taken any impairment charges. Argentina’s economy is in expansion mode, although Decolar has felt an adverse impact from the situation in Brazil, its largest market.

It is rare to see a company such as the Priceline Group take an impairment charge so quickly — around eight months — after making an investment.

But during those eight months Hotel Urbano’s founders were forced out of the company, the Brazilian economy and political system exhibited further stress, and the Zika virus took hold.

Founded in 2011, Hotel Urbano has raised a total of $135 million in funding, including the Priceline investment, according to CrunchBase, and it needs more cash.