Skift Take

Priceline trounced Expedia in hotel room nights booked in the first quarter but Expedia is growing its still-smaller roster of hotels at a faster rate. This should continue to be a very interesting race over the next few years.

In the ongoing turf battles between the Priceline Group and Expedia Inc. during the first quarter of 2015 it was clear that Priceline is a substantially larger and more impactful company globally in terms of hotel bookings.

But Expedia, pumped up by acquisitions, is growing its smaller number of properties and its room nights booked at a faster pace.

The Priceline Group, including, Agoda,, and Kayak, booked many more room nights (104.6 million versus 47.6 million) in the first quarter than did Expedia companies, including,, Venere and Hotwire.

But Expedia’s room nights, albeit from a lower base, grew faster (32 percent) than Priceline’s (25.4 percent). Expedia’s acquisition of Wotif in Australia and its acquisition/consolidation of Expedia’s joint venture with AirAsia contributed 4 percentage points to global room night growth.

The following chart shows their respective metrics, including room nights, number of properties, gross bookings, revenue, net income and the growth rates for the quarter that ended March 31, 2015 versus the year-earlier period:

Priceline Group Versus Expedia Inc. Metrics Q1 2015

Priceline Group % Growth Expedia Inc. % Growth
Room Nights 104.6M 25.40% 47.6M 32.00%
Properties 635,000 40% 510,000 75.80%
Gross Bookings $13.8B 12% $14.98B 19%
Revenue $1.84B 12.1% $1.37B 14%
Net Income $333M 1% $32.56M N/A*

* Expedia Inc. recorded a net loss in Q1 2014 of $14.3 million
Source: Companies’ financial reports

Gross Bookings Versus Revenue

Since Priceline trounced Expedia in hotel room nights booked, why then did Expedia (nearly $15 billion) beat Priceline ($13.8 billion) in the gross bookings contest?

Gross bookings is the full value of all travel sold and it doesn’t measure the revenue that actually accrued to the company. In other words, an online travel agency might record gross bookings of $1,000 for selling a flight but only take in $100 in revenue as roughly $900 in this example went to the airline.

Expedia posted higher gross bookings than Priceline did in the first quarter because Expedia is a full-service online travel agency while the Priceline Group, for the most part, focuses on hotels and cars. In the Group, only and Kayak, which mostly gets referral and advertising fees, not commissions, sell airline tickets.

Revenue is a more important metric than gross bookings and by this measure the Priceline Group generated $1.84 billion in revenue in the first quarter while Expedia was considerably behind, attracting $1.37 billion in revenue.


The Priceline Group was hugely more profitable than Expedia Inc. in the first quarter even though Priceline has more exposure to currency headwinds internationally because of the strength of the dollar against the euro and British pound. Priceline’s net income reached $333 million during the first quarter versus $32.56 million for Expedia.

The Priceline Group’s profit margin is significantly higher than Expedia Inc.’s.

Room Supply

At the end of March 2015, the Priceline Group offered rooms from 635,000 hotels, apartment hotels and vacation rentals — about 125,000 more than Expedia Inc. displayed.

However, Expedia, which acquired Travelocity, Wotif and the AirAsia joint venture since last year and recently invested in Argentina’s Decolar, has been growing its hotel supply faster than Priceline, 75.8 percent versus 40 percent.

While Expedia is benefitting from acquisitions on top of its organic efforts to build supply, Priceline will benefit in the future from adding Chinese hotels from partner Ctrip, and it is making a push to sign up vacation rentals from individual owners.

Expedia is doing so well in adding hotel properties that part of CEO Dara Khosrowshahi’s $3.5 million cash bonus in 2014 was based on “a significant ramp up in the rate of new property acquisitions,” the company stated.

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Tags: earnings, expedia, priceline

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