Skift Take

Please don't let us be misunderstood, the Big Three online travel CEOs proclaimed in recent interviews. Airbnb has great cash flow,'s Europe advantage over Expedia is not unmovable, and Booking is improving in the U.S. So there.

Why isn’t Airbnb profitable? Is Expedia Group losing market share? What about losing ground in short-term rentals? In recent separate published interviews, the CEOs of each company pushed back against the criticism.

At Airbnb the Cash Is Flowing

In a CNN interview, reporter Richard Quest last month cited to Airbnb co-founder and CEO Brian Chesky the numerous unprofitable companies years ago — and we should mention today — that spoke of a “path to profitability” in the face of losses and told Chesky “there has to be a better business case.”

In the first quarter, Airbnb’s narrowed its net loss to $19 million, and its market cap June 2 mid-day was $78.8 billion compared with rival Booking Holdings’ $94 billion.

Chesky answered that Airbnb’s free cash flow in the first quarter, which is typically a slow quarter, was $1.2 billion.

“We are lean, we have 6,000 employees,” Chesky said. “We were very, very profitable from a free cash flow standpoint in Q1. We are feeling really good.”

Indeed in 2021, which saw Airbnb notch a net loss of $352 milliion, the red ink was primarily due to interest expense and “other income” expense, mostly a remeasurement of financial instruments.

He added: “We are not pulling on the breaks. We are stepping on the gas.”

Chesky recalled lost 80 percent of its business in two months during the beginning of the pandemic in 2020, and restructured. “We did the layoffs, restructured our company,” he said. “We rebuilt the company from the ground up.”

Chesky said he can’t control stock prices and the sour mood on Wall Street about risk-taking as it relates to high-growth companies.

“But ultimately as a CEO, I try to focus on things I can control,” Chesky said. I certainly can’t control the stock market. I can control the performance of the company and that’s what we’re focused on.”

He added: “If you hold a stock long enough, the great companies will go up,” Chesky said.

“And we are not pulling on the breaks. We are stepping on the gas.”

Expedia Withdraws From Southern Europe, Says Booking’s Advantage Is Not Structural

Appearing Wednesday at the Cowen 50th Annual Technology, Media and Telecom Conference, Expedia Group CEO Peter Kern responded to concerns that his company is losing market share.

Kern said much of these worries stem from a lack of appreciation of “mix shift,” and that competitors often don’t mention that they “bought” — meaning they spent a lot of marketing money — their numbers improvements.

For example, Expedia did well when the U.S. travel recovery occurred while Europe was still shut down, and likewise sees the impact when Europe, where Expedia isn’t the strongest, opens up.

“We walked away from business in Europe in bad places, and particularly in Southern Europe, where we just weren’t making money and we were just burning money,” Kern said. “We did not have a winning strategy there. And from my perspective, you don’t keep banging your face against the wall in the same place doing the same things. You regroup. You figure out how to win. And then you go back into the market. And have we given up some business there, some transactions? For sure, we have. But we did it with our eyes open, and we’re comfortable with it.”

 Although is the leading online travel agency in Europe, Kern, who became an Expedia board member prior to’s ascendancy, said it wasn’t always that way.

“None of this is structural,” Kern said. “We have traded customers for years. In fact, we used to be pretty dominant in Europe long ago. And the other guys came up with a sharper way to win in Google, and we gave up business slowly. But there’s nothing structural about that. There’s nothing sticky about their product. Frankly, there’s not enough sticky about our product even though we have all these loyalty capabilities.”

It’s clear that Kern doesn’t think much about’s Genius loyalty program, while Expedia Group is in the midst of trying to revamp its own five loyalty programs into one.

So how will Expedia and its Vrbo unit compete with Airbnb in short-term rentals?

Kern said Expedia/Vrbo won’t be as big in cities as Airbnb, and will continue to focus on the vacation rental of homes, not apartments.

He argued that Expedia has the advantage over Airbnb in its business-to-business partnerships, a sphere where Airbnb is largely absent.

“And we have that huge opportunity,” Kern said. “I mean, think of all the rewards programs we help power like Amex and Chase and others that we can power — that we can push through even places like big hotel chains that are starting to rent homes to their rewards members.” Making Short-Term Rental Improvements to Win U.S. Customers

Why U.S. hosts or property managers sign up and list on in addition to — or instead of — Airbnb and Expedia/Vrbo?

Speaking at the Cowen conference Thursday, Glenn Fogel, who heads both and parent company Booking Holdings, said the company knew it needed a better short-term rental offering — he calls it alternative accommodations — and added liability insurance, for example.

“If you own a home and you want to rent it out to strangers, one of the things you may be concerned about what would happened, [if] they slip in the kitchen, they break the leg,” Fogel said. “Who’s going to pay you for that? And it’s — if you had to think that some distributor is going to give you free insurance for you, oh, that’s good, but we didn’t do that, other people did, we didn’t. Now we do.”

Fogel said it is the payment system it uses with large property managers.

“And now we have a much better payment system working with the very large property managers so that the flows and the reconciliates, everything works lot better, that’s another way to get more inventory,” Fogel said.

Fogel said Booking has a big foothold in Europe in short-term rentals, but the company is under-represented in the U.S.

“We have a great product in Europe,” Fogel said. “It works very well. We’re a very big player there, and we’re building slowly here. We’re going to continue to work on that. “

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Tags: airbnb, alternative accommodations,, expedia, expedia group, homes, short-term rentals

Photo credit: The Grand Old Beach House in West Yarmouth, Massachusetts on September 22, 2019. The CEOs of Airbnb, Expedia, and clash over the allegiances of hosts and guests. Bud Ellison /