Expedia Had a Less-Is-More Approach to Mergers in 2018

In contrast to 2015, when Expedia Group executed seven mergers at a price tag of some $5.74 billion, the company’s approach to mergers over the last few years has mostly been to forgo them.

In 2018, according to a recent financial disclosure, Expedia, under CEO Mark Okerstrom, made just two acquisitions for a total of $54 million. That’s a rounding error for a company that did $11.2 billion in revenue last year. The two acquisitions are believed to be for Pillow and ApartmentJet, which provide short-term rental solutions for owners of multifamily residential properties. The irony to some may be that Okerstrom, before becoming CEO, was instrumental in Expedia’s aggressive acquisition strategy as the company CFO.

While Expedia spent a mere $54 million in acquisitions in 2018, it invested a bit more than that, $70 million, in Indonesia booking site Traveloka, bringing its total minority investment in the company to $420 million.

That’s an interesting trend. Booking Holdings will likely furnish its end-of-2018 financial statement to the U.S. Securities and Exchange Commission next week so we can review the final tallies, but it had a heavy year of investments. The major investment action for Booking Holdings was in China and Southeast Asia with its $500 million investment in ridesharing platform Didi Chuxing, and $200 million in ridehailing and food-delivery service Grab.

Here are the amounts that Expedia has spent on acquisitions 2014-2018:

Expedia Acquisition Price Tags 2014-2018

Source: Public filings

For 2017, Expedia said “we completed several business combinations, one of which made an initial investment in during 2015.” The cost for all of these 2017 deals was $194 million, or nearly four times what the company spent in 2018.

The largest acquisition that Expedia made in 2017 was taking a majority stake in London-based rail aggregator SilverRail for $148 million.

Expedia said its acquisitions — or lack thereof — in 2016 didn’t amount to much.

That followed an historic year of deals in 2015 when Expedia bought HomeAway for $3.56 billion in cash and stock, Orbitz Worldwide for $1.8 billion, and Travelocity for $280 million in cash. Expedia also took control of its joint venture with AirAsia that year, injecting $94 million in cash for an additional 25 percent of the company. That brought its stake to 75 percent. And Expedia carried out three other deals for $9 million in 2015.

Expedia’s performance in 2016, when it experienced troubles integrating Orbitz Worldwide, may have a lot to do with its reluctance to undertake big deals in the succeeding years. The company has enough work to do anyway, as it labors to integrate and make good on its acquisition of HomeAway in 2015.

In a February 8 financial filing, Expedia said: “Our primary growth drivers are global expansion, including of our supply portfolio, technology and product innovation, and new channel penetration and expansion.”

Global expansion could mean that Expedia would be open to acquisitions in 2019 — but the company already appears to have a lot on its plate.