Shares of hotel booking company Trivago (TRVG) - Get Report  closed up Friday after the company debuted on the Nasdaq but priced below its expected range. 

The Dusseldorf, Germany-based company closed up more than 7% on the first day of trading to $11.80 per share. It priced at $11 per share raising $199 million in its IPO, well below its projected range between $13 and $15 apiece which would have put the overall proceeds to $428 million. 

The company, which counts Expedia (EXPE) - Get Report as its majority shareholder, had expected to offer 28.5 American depository shares at $13 to $15 apiece. The company offered 26.1 million American depository shares at $11 apiece and opened at $11.20 per share.

Analysts attribute the lower IPO valuation of Trivago to the late time of the year that the company has chosen to go public. "It's a fine IPO process," said Brian Fitzgerald, ‎Managing Director at Jefferies. "But maybe it's too late in the year. It's a tough time of the year to get somebody to focus on an IPO."

In 2012, Expedia paid €477 million ($531 million) for a 63 percent stake in Trivago. Expedia will maintain its majority control in Trivago after the IPO.

In recent years, Trivago has gained its strength in accommodations, which "globally is more fragmented and offers more margin upside to intermediaries compared to flights," according to Douglas Quinby, Vice President at travel research firm Phocuswright. This in turn gives the company at least a perceived leg up on competitors such as Kayak and Skyscanner, which have historically been more focused on air.

"The market's concern around the company has to do with how they achieved that growth. The have a very big line item expense in ad spend relative to their peers, and they source a greater share of their inbound traffic from paid search," said Quinby. "So the big question is around future expectations is clear - can they grow revenue faster than their expenses? The market's response to the IPO indicates that investors don't yet have consensus on an answer."

Online and mobile travel search platforms such as Trivago, TripAdvisor (TRIP) - Get Report and Priceline (PCLN) aggregate hotel deals across from different websites and allow customers to search through multiple booking options. Most of the revenue for companies like Trivago, Travelocity and Hotwire are often generated from advertising costs from online travel agencies, hotel chains and independent hotels.

JPMorgan Securities LLC, Goldman Sachs & Co and Morgan Stanley & Co LLC are among the lead underwriters.

According to Phocuswright Data, global travel spend grew to an estimated $1.1 trillion in 2015, excluding Canada, Latin America and Eastern Europe, representing a compound annual growth rate of 4.1% since 2010, outpacing average global economic growth of 2.9% per year in the same period.

The company reported revenue of € 298.9 million ($324.6 million) for fiscal year ended December 31, 2015 and $425.6 million the nine months ended September 30, 2016 in its IPO prospectus filing.

An Expedia spokesperson declined to comment.