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Expedia stock tumbles 25 percent, a bad sign for online travel

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Expedia stock is down 25 percent a day after it said its second-quarter profit fell by a third.

This doesn’t bode well for the online travel market. Analysts are expressing concern to the press that the landmark players in the space are faltering. The primary factors are sluggishness in the European market and increased competition from younger rivals.

“The online travel world is not looking altogether robust; Expedia wasn’t able to transition well last quarter,” said Art Hogan, market strategist at Lazard Capital Markets, in a note to MarketWatch.

To make matters worse, much of the online growth stems from consumers booking hotels and airlines directly rather than through online travel hubs like Expedia, Travelocity, and Priceline.

Shares of Bellevue, Wash.-based Expedia tumbled to $48.93 and may continue to fall.

“We knew we were facing Q2 headwinds, and those which we expected, as well as some we didn’t, materialized,” Expedia’s chief executive said of the profit drop.


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