Booking and Expedia: The Easy Money Is Over, What Comes Next?

The period after the Great Financial Crisis in 2008-2009 until 2019 was a golden decade for online travel agencies. Booking and Expedia benefitted from the shift to online bookings, a consolidation of the online distribution landscape, and share gains from hotels. They become the most powerful duopoly in online travel. 

Are the heydays of Booking and Expedia over?

However, Booking and Expedia now face slower growth, stiffer competition and increased pressure on profit margins. 

Booking, which was posting more than 40% growth in 2011, grew just 4% in 2019. Growth may be less than 10% in the next decade.

Why the slowdown? The tailwinds that drove market share gains are now diminishing. There's increased competition; new entrants into the travel space, such as banks and credit cards; and smarter, more tech-enabled hotel brands are gaining back share.

The OTA landscape is filling up with strong new players that won’t be as easily acquired as they were in the past. Our proprietary survey shows that since 2020, Booking and Expedia have lost market share to other OTAs. Expedia in particular has felt the pressure from both new entrants and Booking, which is aggressively expanding into the U.S.

The online distribution landscape has re-fragmented and gotten more competitive 

The introduction of free organic listings by Google Hotels in March 2021 has democratized the online distribution landscape: Direct hotels and smaller OTAs are now competing head-on on with Booking and Expedia.

Booking and Expedia still dominate the paid sponsored listings. But for free organic results, there is no