Expedia Inc.'s 2010 earnings visibility is cloudy, an analyst said Monday, as the online travel provider looks to gain from cost cuts and technology upgrades, but could be hindered, in part, by lower fees.
Scott Barry of Credit Suisse downgraded the company based in Bellevue, Wash., to "Neutral" from "Outperform," saying in a client note that there are many factors Expedia can't control that could weigh on its performance this year.
Travel providers have been pinched during the economic downturn because many leisure travelers have postponed their travel plans or taken shorter trips in an attempt to save money. Businesses have also pulled back on corporate travel during the recession.
Expedia cut its fees last year in order to remain competitive, as many in the travel industry lowered air fares and room rates to appeal to cost-conscious consumers.
While Expedia has looked to contain costs, the company is also spending on its Venere Net ApA acquisition. Expedia purchased Venere, a hotel reservation Web site based in Italy, in July 2008 for an undisclosed amount.
Barry also trimmed his price target on Expedia to $28 from $29.