Expedia (EXPE): The Wiring of Travel

1. Executive Summary

Expedia is often viewed as the "loser" compared to Booking.com (BKNG). However, Expedia is quietly pivoting to become the B2B backend for the travel industry. When you book a hotel through a bank portal (Chase/Amex) or an airline bundle, you are likely using Expedia's "White Label" technology.

Key Thesis Points

1. B2B Growth: The B2B segment is growing 2x faster than the B2C consumer segment. This revenue is stickier and less dependent on Google SEO spend.
2. Buybacks: Management believes the stock is undervalued and has been retiring ~10% of the float annually.
3. One Key: The unification of loyalty programs (Expedia, Hotels.com, Vrbo) into "One Key" aims to increase retention, though the initial migration caused friction.

2. Business Overview

• B2C Brands: Expedia.com, Hotels.com, Vrbo (Vacation Rentals).
• B2B: Powering travel for Walmart, Chase, Delta.

3. Risks

• Google: Google Travel remains the gatekeeper. Expedia pays billions to Google for ads.
• AI Disruption: If travelers shift to using AI agents (ChatGPT) to book trips, the OTA (Online Travel Agency) aggregator model could be disintermediated.