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Booking Holdings vs Expedia: A comparative analysis of market dominance in 2023

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In 2023, Booking Holdings outperforms Expedia in revenue, net profit margin, and global presence, indicating stronger financial health and broader geographical reach in the travel sector.

In the competitive landscape of online travel agencies, Booking Holdings and Expedia Group stand as the major players, each with distinct operational strategies and market performances.

In terms of operating metrics for 2022, Booking Holdings exhibited stronger figures with total gross bookings of $121.3 billion, compared to Expedia‘s $95.0 billion. This higher booking volume translated into greater revenue for Booking, amounting to $17.1 billion, while Expedia reported $11.7 billion. The revenue composition also varied between the two companies. Booking showed a more balanced contribution from its agency and merchant models, whereas Expedia leaned more heavily on its merchant segment, which accounted for two-thirds of its total revenue.

Geographically, Booking Holdings relied more on non-US consumers, with significant revenue coming from the Netherlands. In contrast, Expedia‘s US segment represented 68.0% of its total revenues. This difference in geographical focus impacted their recovery post-pandemic, as tourism in Europe experienced a stronger resurgence compared to the US, potentially favoring Booking Holdings.

Financially, Booking Holdings demonstrated a more robust performance. It incurred lower overall expenses than Expedia in 2022, resulting in an operating income margin of 29.9%, significantly higher than Expedia‘s 9.3%. Additionally, Booking‘s net profit margin stood at 17.9%, nearly six times that of Expedia‘s 3%.

Looking ahead, market expectations for 2023 and 2024 suggest that Booking Holdings’ growth in revenue and EBITDA might outpace Expedia‘s. This expectation is reflected in their respective valuations, with Booking‘s EV/EBITDA and EV/Revenue being higher than Expedia‘s. However, on a P/E basis, Expedia is more richly valued.

The broader trends in the travel industry also shape the performance of these companies. For instance, in the United States, there is a growing interest in city destinations rich in art and culture, as well as a shift towards value-for-money accommodations, such as three-star hotels. Additionally, wellness travel is gaining popularity, especially among younger demographics. Nearly half of U.S. travelers are also leaning towards cooking to cut costs, indicating a shift in travel preferences post-pandemic.

Both Booking Holdings and Expedia have expanded their services beyond traditional hotel bookings to include a range of offerings like flights, car rentals, experiences, and even homestays, partly in response to the competitive pressure from platforms like Airbnb.

In summary, while both Booking Holdings and Expedia continue to be dominant forces in the online travel booking industry, Booking Holdings currently demonstrates stronger financial performance and a more diversified geographical presence. The trends in the travel industry, including the shift towards more diverse and value-oriented travel experiences, are likely to continue influencing the strategies and performances of these major players in the travel and hospitality sector.

Co-Founder & Managing Director - Travel Media Applications | Website | + Posts

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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