Expedia (EXPE) is one of the world’s largest online travel companies. The American-based travel giant was initially founded as a division of Microsoft in 1996, but was later spun off into a separate entity.
Expedia provides numerous travel products and services for leisure and corporate travelers, offline retail travel agents, and travel service providers. It has a very strong global presence, with more than 150 booking sites in over 70 countries garnering about 45% of its total revenue.
Expedia maintains strong ties with airlines, car rental and cruise line companies, lodging properties, and destination service providers. The company has been aggressively acquiring competitors such as Wotif.com in 2014, Travelocity in 2015, and Orbitz in 2015 in a bid to strengthen its services portfolio.
The company faces challenges from other major online travel companies such as Priceline Group (PCLN) (which owns brands such as Booking.com and Agoda.com), TripAdvisor (TRIP), BookIt.com, HotelQuickly, and other emerging online companies such as Ctrip (CTRP) and MakeMyTrip (MMYT).
However, with Expedia aggressively acquiring competitors, the market is turning into a two-horse race between Expedia and Priceline, with both companies combined holding about 95% of the US market share.
Expedia forms 0.52% of the Consumer Discretionary Select Sector SPDR (XLY).
Expedia operates various successful and established brands under its name that have a global presence in major markets. Some of the key brands under the company’s banner are Expedia.com, Hotels.com, Hotwire.com, trivago, Egencia, Venere.com, Expedia Local Expert, Classic Vacations, Expedia CruiseShipCenters, and eLong. These brands not only are popular in established markets, but also have a solid foothold in emerging markets.
In our next article, we will discuss Expedia’s business model.