Has Expedia Blunted Booking’s U.S. Market Share Gains?

Expedia Group pessimists point to Booking.com’s market share gains in the U.S. since late 2021, but now two financial analysts said: “We see clear evidence that the tide has turned.”

Jake Fuller and Kevin Dolan of BTIG published a research note Monday arguing that “Expedia may be gaining some ground.” According to this analysis:

• Regarding a key metric, both companies grew room nights, which include hotels and short-term rentals, 9% in the second quarter, which ended June 30.
• That means Expedia likely grew this category faster than Booking, because Expedia had already said bookings for its Vrbo vacation rental units were soft during the second quarter. This could have been due to a tech migration and other factors.
• Signs suggest Expedia outperformed Booking in the U.S. Expedia leans more U.S., and Booking more toward Europe. The U.S. market has recently posted slower growth than Europe because its recovery from Covid had started earlier. If both Expedia and Booking reported 9% gains worldwide, the analysts say, Expedia likely did better in the U.S. Plus, Booking said last week that its U.S. room nights declined during the second quarter.

Why Is This Important?

Booking Holdings sees the U.S. as a relatively untapped market where it has ample room to grow. For the past few years it has made U.S. growth a strategic priority given that its largest brand, Booking.com, is very big and well-known in Europe and much less so in the U.S.

Expedia Group, on the other hand, is the online travel agency leader in the U.S., and has ample runway in the rest of the world. BTIG estimated that 55-60% of the Booking Holdings business is in Europe, and that 60% of the Expedia Group presence is centered in the U.S.

One financial quarter alone does not solidify a trend but it could reflect some Expedia resilience. Fuller of BTIG thinks Expedia’s strength could result from its deemphasizing some international markets which weren’t fruitful, and also because of Expedia Group CEO Peter Kern’s decision to downplay some of its non-core brands to the benefit of core brands like Expedia, Hotels.com and Vrbo.

Expedia declined to comment on the BTIG report and Booking didn’t immediately respond to a request for comment.

Expedia Group’s share price grew 4% at Monday’s close to $107.29 as Citi hiked its price target from $105 to $115, SeekingAlpha reported.