Skift Take
Expedia has a lot going for it in the short to mid term but shifts in technology and consumer tastes have disrupted the travel space before, and will do so again. CEO Dara Khosrowshahi and team will need to stay vigilant in addressing certain vulnerabilities, especially as they go up against the big platforms including Google, Facebook, Amazon and others.
Today we are launching the latest report in our Skift Trends Reports service, The 2016 Deep Dive Into Expedia’s Competitive Position In Travel.
This report evaluates Expedia’s competitive positioning amid the explosion of tech and disruption now playing out across the entire sector. The company continues to charge forward with a combination of healthy organic growth from its diverse brands, as well as the positive impacts from its latest acquisitions. Revenue streams and overall profitability look strong in the short to mid term, but nothing is certain in today’s environment.
In an exclusive interview at the 2016 Skift Global Forum in New York City, Expedia’s CEO Dara Khosrowshahi pointed to artificial intelligence and voice-activated search as a concerning threat to the business. The big technology platforms out there including Google, Facebook and Amazon know this and have vast resources aimed at dislodging Expedia and other aging online travel agency brands from their current high-ground position.
Despite heavy consolidation in the space, the online travel agency (OTA) landscape is not a winner-take-all environment. Both Expedia and Priceline are well positioned for steady growth into the next decade – but not without headwinds. The rise of alternative booking platforms including Airbnb, local niche OTAs, metasearch brands, and consolidation in the hotel space will likely chip away at Expedia’s dominant position.
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The online travel ecosystem is changing with all participants looking to take share of different parts of the search and booking process. This has led to aggressive marketing campaigns by the hotels to push direct bookings while the OTAs continue to spend billions in digital marketing each year.
Here we discuss the current landscape and our predictions surrounding the direct booking debate, M&A, and advertising trends. We produce a deep financial analysis of Expedia’s full travel product line evaluating company revenues, margins, internet traffic, market cap, and other metrics compared to Priceline and other major players.
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We also analyze recent earnings calls from OTAs and the big hotel groups to highlight what the key players are saying about the growing friction between these two factions and their share and role in distribution.
Our crack contributing analyst Jared Wein – a former Senior Equity Analyst with J Safra Asset Management – sifted over volumes of company filings, earnings calls, articles, conducted numerous interviews and listened in on Dara’s interview sessions at this year’s Skift Global Forum to deliver one of our most insightful reports to date.
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This is the latest in a series of twice-monthly reports aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 100 hours of desk research, data collection, and/or analysis goes into each report.
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Tags: expedia, research reports, Travel Trends