Travel revenue increased by $5.4 million, from $50 million for the three months ended March 31, 2022 to $55 million for the three months ended March 31, 2023, an increase of 11%, primarily due to the increase in the Club and Pass memberships driving an increase in paid travel. The average price per night in our residences increased 14% for the three months ended March 31, 2023 over the three months ended March 31, 2022, while the total number of paid nights in our residences decreased by 8%.
Cost of revenue. Cost of revenue increased $13 million from $47 million for the three months ended March 31, 2022 to $60 million for the three months ended March 31, 2023, an increase of 27%. This increase was primarily a result of higher direct travel costs resulting from increased travel and lease expenses on properties due to the addition of new properties to our portfolio. Our gross margin decreased $3.1 million from $35 million for the three months ended March 31, 2022 to $32 million for the three months ended March 31, 2023. The gross margin percentage decreased seven percentage points from 42% for the three months ended March 31, 2022 to 35% for the three months ended March 31, 2023.
General and administrative. General and administrative expenses excluding equity-based compensation increased $0.2 million, or 1%, from the three months ended March 31, 2022 to the three months ended March 31, 2023. General and administrative employees were 153 and 157 at March 31, 2022 and 2023, respectively. Overall, our headcount and costs increased to accommodate growth within the business due to increased subscriber base, software system upgrades, and costs incurred as a result of operating as a publicly traded company. Our equity-based compensation increased $0.3 million from $0.4 million for the three months ended March 31, 2022 to $0.7 million for the three months ended March 31, 2023, an increase of 63%, as a result of new grants made in the second quarter of 2022 for which expense was recognized during the three months ended March 31, 2023.
Sales and marketing. Sales and marketing expenses decreased $3.5 million from $10 million for the three months ended March 31, 2022 to $6.6 million for the three months ended March 31, 2023, a decrease of 34% due to reduced spending on advertising and reduced commissions expense due to capitalization of commissions earned on contracts sold with terms of greater than one year. Sales and marketing employees were 155 at both March 31, 2022 and 2023.
Operations. Operations expenses decreased $1.5 million from $9.7 million for the three months ended March 31, 2022 to $8.2 million for the three months ended March 31, 2023, a decrease of 15%, primarily due to a decrease in operations staff as a result of the January 2023 reduction in workforce. Operations employees were 345 and 291 at March 31, 2022 and 2023, respectively.
Technology and development. Technology and development expenses increased $0.6 million from $2.8 million for the three months ended March 31, 2022 to $3.4 million for the three months ended March 31, 2023, an increase of 20%, primarily due to increased investments in product development and strategic growth initiatives. Technology and development employees were 54 and 67 at March 31, 2022 and 2023, respectively.
Depreciation and amortization. Depreciation and amortization expenses increased $0.3 million from $0.7 million for the three months ended March 31, 2022 to $1.0 million for the three months ended March 31, 2023 primarily due to recent property and equipment purchases in conjunction with furnishing a larger lease portfolio over the three months ended March 31, 2023 compared to March 31, 2022.
Interest, net. Interest expense decreased from $0.1 million for the three months ended March 31, 2022 to $0 for the three months ended March 31, 2023. This change is due to our Revolver being paid-off in the third quarter of 2022. The decrease in interest expense was offset by an increase in interest income from $4 thousand for the three months ended March 31, 2022 to $0.1 million for the three months ended March 31, 2023. This change is due to the Company’s receipt of interest in relation to our cash investments.
Change in fair value of common stock warrant liability. Warrant fair value losses decreased $18 million, from an $18 million loss during the three months ended March 31, 2022 to a $0.1 million loss during the three months ended March 31, 2023. These losses are due to the fair valuation of our publicly traded warrants in each period. See Note 13 - Warrants in our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information.
Provision for income taxes. Our provision for income taxes consists of an estimate for foreign taxes as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in the tax law. We maintain a valuation allowance against the full value of our net deferred tax assets because we believe it is more likely than not that the recoverability of these deferred tax assets will not be realized. For periods prior to the Business Combination, Inspirato LLC was treated as a partnership for U.S. federal income tax purposes as such did not record income tax expense.