Skift Take
In some ways, Expedia Group's potential narrowing of the take rate gap with Booking Holdings has a lot to do with Booking's strategic decisions — pushing more into the U.S. and expanding its lower-margin flights business.
The traditional knock on Expedia Group in its matchup against rival Booking Holdings is that Booking has been way more profitable. And Booking can take those profits, plow them back into marketing, and win more market share.
In a research report last week entitled, "EXPE 101: A Deep Dive on the Business, Industry & Model," Jake Fuller and Kevin Dolan of BTIG argued that Expedia is on the cusp of narrowing that profit gap.
The report looks at the profit question in terms of EBITDA (earnings before interest, taxes, depreciation and amortization) margin. In 2022, Expedia's EBITDA margin was 11.9% versus 31.3% at Booking Holdings. BTIG said Expedia is on track to boost its margin to more than 23% in the 2024 to 2025 timeframe.