How Does Expedia Make Money? Business Model Explained!

A global online travel company, Expedia Group Inc. (EXPE) facilitates business and leisure travelers’ travel planning, booking, and enhancement. Accommodation properties, airlines, car rental companies, and cruise lines are among the services offered by the company. Expedia has a wide range of brands that cater to travelers, such as Brand Expedia,, Vrbo, Orbitz, Travelocity, trivago, and

In addition to offering services to leisure and corporate travelers, Expedia competes with other companies that offer the same services, including travel agencies, tour operators, consolidators, wholesalers, and metasearch websites, as well as mobile travel apps and social media websites. TripAdvisor Inc. (TRIP), Group Ltd. (TCOM), American Express Global Business Travel, and Airbnb Inc. (ABNB) are the major competitors of Expedia.

Overview of Expedia’s Financials

Expedia announced its financial results for the fourth quarter of its 2021 fiscal year (FY), which ended on December 31, 2021. In the year-ago quarter, the company reported a loss of $412 million attributable to common stockholders. 

The company reported a net income of $276 million attributable to common stockholders in the third quarter of this year. A year-over-year increase of 147.8% brought $2.3 billion in revenue.

During the quarter, Expedia’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $479 million. The adjusted loss before interest, taxes, depreciation and amortization for the same quarter last year was $160 million.

During the fourth quarter, Expedia generated revenue primarily from four types of service. Most of its revenue comes from Lodging, including revenue generated from facilitating hotel and alternative accommodations. 

Just 3% of total revenue came from airline ticket sales. Advertising and media, which primarily consists of ad revenue generated by trivago, generated 7%.7 Expedia generated 15% of its revenue from car rental, insurance, and destination services.

Expedia’s business and financial results have been severely affected by the COVID-19 pandemic and the drop in global travel. Another major disruption was experienced by the company in Q4 FY 2021 due to the pandemic. Although less severe than previous waves, it did have a significant impact. Throughout 2022, Expedia expects the travel industry to continue to recover and travel demand to increase.

How Expedia Makes Money

The company has three reportable segments: retail, B2B, and trivago.

Each of these segments is broken down by revenue and adjusted EBITDA. There is also a breakdown of intersegment revenue generated by Expedia’s trivago segment, which provides advertising and media services to its Retail segment.

Expedia’s total revenue across these three segments must be subtracted from its total consolidated revenue by $31 million to reconcile it with its total revenue across all segments. To arrive at Expedia’s total consolidated adjusted EBITDA, $119 million of unallocated overhead costs must also be subtracted from total adjusted EBITDA.

1. Retail

Retail provides travel and advertising services to global customers through a variety of brands, aggregating a variety of operating segments.,, as well as localized websites around the world are among these brands. In addition to Vrbo, Orbitz, Travelocity, CheapTickets,, and Expedia Cruises, retail includes a number of other brands.

Expedia’s total revenue across all three segments grew by 146.4% to $1.7 billion in Q4 FY 2021, accounting for about 75% of Expedia’s revenue. The adjusted EBITDA increased by 37-fold to $481 million, accounting for more than 80% of the total.

2. B2B

In the B2B segment, Expedia Business Services operates. Egencia, a travel management company, offers travel services to businesses and their corporate customers. Expedia Partner Solutions delivers travel services to leisure travelers through third-party branded websites. Due to the sale of Egencia in November 2021, Expedia will have no further impact on financial results in future periods.

A total of $481 million was generated by Expedia’s B2B segment in Q4 FY 2021, up 158.6% year-over-year. This is about 21% of Expedia’s total revenue. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the segment was $97 million, significantly better than that of the prior year’s $52 million. More than 16% of total adjusted EBITDA was generated from this segment.

3. trivago

Trivago is Expedia’s hotel metasearch network, or search aggregator. Ad revenue is generated primarily by sending referrals to online travel agencies and travel service providers from those sites.

Segment revenue rose 160.5% YOY to $99 million in Q4 FY 2021, representing about 4% of Expedia’s total revenue. As compared to the $4 million adjusted loss before interest, taxes, depreciation, and amortization reported in the year-ago quarter, the segment generated adjusted EBITDA of $20 million. In total, over 3% of adjusted EBITDA came from the trivago segment.

Recent Developments

Expedia announced on April 4, 2022, that it has hired Rob Torres as senior vice president of Media Solutions, a longtime Google veteran. The company’s managing director of advertising and marketing for the past 15 years, Torres spent more than 15 years with Google. He worked for Expedia from 1999 to 2006 as vice president of strategic accounts before joining Google.

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