Recasts lede and adds shares

By Anshuman Tripathy

May 7 (Reuters) - Online travel platform Expedia EXPE.O forecast current-quarter gross bookings below Wall Street estimates on Thursday as the Middle East conflict impacted demand, sending its shares down 6% in after-hours trading.

An uncertain rest of the year threatens demand recovery in the travel industry as trade volatility and prolonged conflict could further increase costs for customers.

"In March, we did see the impact of the conflict in the Middle East," CEO Ariane Gorin told Reuters in an interview.

"While the Middle East is only about 2% of our business, we saw cancellations across Europe and Asia."

Gorin said there was a two-point impact on the company's gross bookings and room nights arising from the Middle East conflict and travel advisories in Mexico.

Peer Booking Holdings BKNG.O and hotel operators such as Marriott MAR.O and Hilton HLT.N have also flagged a hit to profitability due to the war, which erupted in late February.

Seattle-based Expedia expects second-quarter gross bookings to be in the range of $32.5 billion to $33.1 billion, the midpoint of which is slightly below analysts' average estimate of $33 billion, according to data compiled by LSEG.

"The cancellations have subsided as we go into April, but certainly that was an impact," Gorin said.

The company's advertising and media business rose 15% during the first quarter, aided by Trivago, which recorded a 47% growth in revenue.

Quarterly gross bookings rose nearly 13% from a year earlier, driven by strong demand for international travel. Gorin said that revenue growth was faster outside the U.S. than in the country.

The Vrbo-parent reported an adjusted profit of $1.96 per share for the first quarter, beating analysts' estimates of $1.38 apiece.

Revenue for the quarter ended March 31 rose about 15% to $3.43 billion. Analysts on average expected $3.35 billion.