Booking Vs Expedia Business Model

There are three predominant business models used by the online travel agencies otas the advertising the agency and the merchant business model.

Booking vs expedia business model. Booking holdings nasdaq bkng and expedia group nasdaq expe are the two largest online travel agencies otas in the world. Each of the three companies has their predominant revenue stream in one of those. What about online travel agencies otas in general.

Investors have rewarded booking with a market capitalization of more than 87 billion while a similarly sized expedia has a market valuation of more than 18 billion. In 2018 expedia group and booking. If i had to pick i believe in the priceline branding more than i believe in the expedia travel agent model.

Ironically enough despite all the company s fundamental challenges expedia s share price has outperformed in the last 6 months up 32 64. Despite lower revenues expedia group s gross bookings have been 10 higher than booking holdings in the last two years. Agency model vs merchant model while most otas follow merchant model of business it is agency model that has gotten the global success.

That is going to cut away some of my business from third party booking services. For example booking s pre tax profit margin is 33 3 compared to just 6 4 for expedia and analysts still see potential upside in booking s share price of 18 25 compared to only 3 95 for expedia. Expedia uses both the merchant model and the agency model.

Comparison of operational metrics.