Even after Wednesday’s 5% drop, shares of Expedia (NASDAQ:EXPE) still are up 92% for the year.
The company, which operates Hotels.com and Hotwire, has been investing aggressively in Europe and Asia, and it also has a growing mobile business. Plus, it recently beat the pants off analyst expectations for Q2 earnings, helping fuel its run.
However, what’s disconcerting is what caused Wednesday’s short drop — namely, earnings reports from Priceline.com (NASDAQ:PCLN) and Orbitz Worldwide (NYSE:OWW) — showed that the online travel space is vulnerable to an economic slowdown.
So far, the weakness is been primarily in Europe, but it easily could spread to the shaky U.S., which is where Expedia gets a majority of its revenues.