Techquity
Technology Investor, Fundamental Research
Expedia is underrated next to Booking and Airbnb, yet still a solid way into the travel industry. It owns a strong portfolio of brands such as Expedia and Vrbo covering every travel need, is merging onto a single tech platform that cuts costs and speeds its AI rollout, and sells its technology to banks, airlines and other businesses for steady, high-margin B2B revenue. x.comÂ
Booking dominates Europe's online travel market with 71% share versus 15% for its closest rival Expedia, yet it still trades at just 17x forward earnings. x.comÂ
Airbnb is heading toward becoming an AI-native travel platform with inventory nobody else has. Q2 gross booking value rose 16% year over year, with $27.2 billion of bookings, as experiences and services attach to the core and hotels gain traction. As shoppers move to AI-native search, Airbnb's largely non-commodity inventory positions it well, and adding commoditized hotels and car rentals lets it connect trips end to end. x.com x.comÂ
Personal AI agents such as Muse and Grokbot look set to make Expedia the next big loser as consumer and business engagement moves to new channels. Intermediary stocks such as EverQuote sold off and Expedia came under some pressure earlier in the day, but the next level appears to be Expedia, some insurance brokers and then phone communication systems such as RingCentral and Five9, which seem at the top of the losers. x.comÂ
AI price-comparison risk to Booking Holdings is a big nothing burger, since Google and Google Maps have offered comparisons for ages. Personal checks find Google showing no better price than Booking about two-thirds of the time, and saving a few euros is not worth another spam account or the lost time. Having all bookings in one app is also far more convenient than digging through a messy Gmail inbox. x.com x.comÂ
Airbnb's turn to American Express suggests it is about to abuse shareholders. American Express is the new Costco, where dying brands go to rot. x.com x.comÂ
Expedia is unattractive from both an investment and a user perspective, with offerings less proprietary than Booking Holdings'. x.comÂ
Navan's post-Q2 selloff looked unwarranted against its growing corporate travel business. Gross booking value rose 45% to over $3 billion on new customers and expansion, while US business travel demand has surged. Rising operating costs and losses disappointed investors, but enterprises may increasingly seek AI-native travel tools that save time and money. x.comÂ
Meta's Muse is gaining a potential toll booth on online checkout, which squeezes Booking and Airbnb. Within 48 hours Shopify, PayPal and Expedia joined Muse checkout, since each merchant has reason to join early if agents steer demand. For Booking and Airbnb, joining could mean paying fees on bookings that would have come direct anyway, about 90% of Airbnb's traffic as of Q3 2023; staying out bets booking habits won't move to Muse. No deal has disclosed economics, the number to watch. x.comÂ
Adobe and Expedia belong on a short list of businesses AI is going to disrupt, a basket better shorted to hedge long exposure than bought as falling knives. Per Barchart, Adobe has fallen to its lowest price in more than eight years, over 70% below its 2021 high, and @AtlasShrug1 finds it hard to see how Booking and Expedia escape AI travel agents. There are many better places to allocate capital. x.com x.com x.comÂ
Booking Holdings faces a valid long-term bear case as AI agents could take a share of the 13-18% online travel take rate. Testing Meta's Muse and Instinct for a hotel search showed them drawing on Booking and Expedia inventory for now, but agents could eventually build direct ties with long-tail hotels, better reviews and pre- and post-booking service at lower fees. OTAs' own agents look mediocre and lack users' context. At 13x 2027 EPS it tempts as a contrarian long, but looks too tough. x.com … Show more
