More than $280 million has been wiped from the market value of Wotif.com after the online hotel booking group forecast a sharp drop in half year profit.

Wotif expects to make a net profit of between $21.9 million and $22.6 million in the six months to the end of December, a drop of up to 20 per cent from its $27.5 million profit in the same period in 2012.

Hotel bookings in Australia and New Zealand were down, while costs have increased due to wage increases and the company’s increased marketing.

Wotif shares plunged on the news, losing 31.8 per cent, or $1.33, to close at $2.85 – their lowest value since June 2008.

The share price fall took $282 million off its market value, to $603 million.

Wotif said the second half of the 2013/14 financial year would also be volatile, with soft retail conditions in Australia and New Zealand.

That volatility prevented it from providing full year earnings guidance, it said.

IG Markets strategist Evan Lucas said investors were questioning Wotif’s future.

“It certainly isn’t looking very good,” he told AAP.

“Investors are starting to get really concerned about how Wotif is going to turn itself around … or whether it becomes one of those dot coms that unfortunately comes and goes by the wayside.”

Evans said Wotif’s business model was easy to replicate, with competition from online travel sites like Booking.com, Expedia, and travel.com hitting its earnings.

Wotif launched a new strategy in June aimed at raising more money from website traffic, improving its international online content and completing a marketing makeover.

“Many of those initiatives will result in improvement to the business in the medium term and, to some extent, the current fiscal year is a year of transition,” CEO Scott Blume said on Wednesday.

“That said, we need to continue to work hard to sustain and grow our core (Australia and New Zealand) accommodation business as we build out new business initiatives.”

AAP