Expedia Group Looks to Close the Lopsided Profit Margin Gap With Booking Holdings
Skift Take
Part of Expedia Group's long-running profit margin gap with Booking Holdings has been structural, but a significant piece of it has been inefficiencies. Expedia's Peter Kern is looking to bridge the great divide, but the outcome is far from assured.
It's been a perennial handicap in the competition between Expedia Group and Booking Holdings — Booking Holdings is a much more profitable company. But now Expedia boss Peter Kern is holding out hope that his company can at least narrow the gap.
Part of the discrepancy is that their core operations have been different: Booking was traditionally focused on hotels, while Expedia offered hotels, flights, and business to business operations, with the latter two, at least, providing lower profit margins. Expedia also hasn't been as efficient as Booking in performance marketing.
The following chart shows the two companies' EBITDA (earnings before interest, taxes, depreciation and amortization) margins from 2017 to 2020. You may want to disregard the Covid-ravaged 2020 numbers, when Booking was in positive territory at a 15.3 percent earnings margin, and Expedia Group was -23.6 percent.
But, as the chart shows
