(Reuters) - TripAdvisor Inc (NASDAQ:TRIP) reported lower-than-expected quarterly revenue as the travel review website operator earned less from referrals to third-party hotel websites.
The company's shares were down 13 percent at $54.89 in after-hours trading on Tuesday.
TripAdvisor, which aggregates reviews and opinions about destinations and hotels, said its desktop-based platform is facing challenges as more people switch to mobile devices.
The company said its referral and transaction revenue fell 9.6 percent in the third quarter ended Sept. 30.
TripAdvisor's referral revenue has come under pressure after the company rolled out the instant booking feature, which allows booking of hotel rooms directly through the company's website.
The company is trying to aggressively promote the feature by partnering with hotel chains such as Marriott International Inc and travel website operators such as Priceline Inc's Booking.com.
TripAdvisor said on Tuesday that it had made instant booking more prominent on the mobile app by favoring user engagement over generating revenue in the near term.
The company, which depends on ads and subscriptions for revenue, said hotel revenue fell 5.9 percent to $320 million. The division accounted for 76 percent of the company's total revenue in the third quarter.
Total revenue edged up 1.4 percent to $421 million, supported by higher sales in its non-hotel business, which includes restaurants and vacation rentals.
Net income fell to $55 million, or 37 cents per share, in the latest quarter from $74 million, or 51 cents per share, a year earlier.
On an adjusted basis, the company earned 53 cents per share.
Analysts on average were expecting an adjusted profit of 52 cents per share and revenue of $436.3 million, according to Thomson Reuters I/B/E/S.
Up to Tuesday's close, TripAdvisor's shares had shed a quarter of their value this year.