Expedia Group Inc. (EXPE) is a global online travel platform that enables business and leisure travelers to plan, book, and enhance their travel experiences. The company makes available a variety of services provided by lodging properties, airlines, car rental companies, and cruise lines. Expedia operates an extensive portfolio of brands to respond to travelers' needs, including Expedia.com, Hotels.com, Vrbo, Egencia, trivago, and CarRentals.com.

Expedia competes with companies offering services to both leisure and corporate travelers. These competitors include travel agencies, tour operators, consolidators and wholesalers of travel products and services, travel metasearch websites, mobile travel applications, and social media websites. Major rivals include TripAdvisor Inc. (TRIP), Trip.com Group Ltd. (TCOM), American Express Global Business Travel, Airbnb Inc., and Bookings Holdings Inc.

Key Takeaways

  • Expedia offers online tools to help travelers plan and book travel.
  • The Retail segment, focused on travel and advertising services, generates most of the company's revenue and adjusted EBITDA.
  • Expedia faces significant challenges as the coronavirus pandemic sharply slows the pace of global leisure and business travel.

Expedia's Financials

The decline in travel due to the COVID-19 pandemic and related government restrictions has had a significant adverse impact on Expedia's business. The company posted a net loss of $200 million on revenue of $1.5 billion in Q3 2020, which ended September 30, 2020. The net loss was a significant change from the net income of $407 million posted in the year-ago quarter. Revenue fell 57.7% compared to the same three-month period a year ago.

Expedia generated revenue from 4 specific types of service during the quarter. It received about 82% of total revenue from Lodging, which includes revenue generated through the facilitation of hotel and alternative accommodations. Air, which includes airline ticket sales, comprised just 2% of revenue. Advertising and media, which primarily includes ad revenue generated by trivago, comprised 6%. Expedia received 10% of its revenue from car rental, insurance, destination, and other services.

Expedia's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a non-GAAP metric used by the company to gauge the profitability of its different business segments, fell 66.7% to $304 million in Q3 2020 compared to the year-ago quarter.

Expedia's Business Segments

Starting in Q1 2020, Expedia's reportable business segments include: Retail, B2B, and trivago. The company provides a breakdown of revenue and adjusted EBITDA for these three segments. The breakdown excludes revenue generated through intersegment transactions.


The Retail segment aggregates a variety of operating segments and is focused on the provision of a range of travel and advertising services to global customers through a number of different brands. Those brands include: Expedia.com and Hotels.com in the U.S., as well as localized websites throughout the world. Retail also includes other brands such as Vrbo, Orbitz, Travelocity, CheapTickets, CarRentals.com, CruiseShipCenters, and more. Revenue for the segment fell 52.3% in Q3 2020 to $1.2 billion, comprising about 83% of Expedia's total revenue. Adjusted EBITDA fell 51.0% to $429 million, making up about 98% of the total.


The B2B segment consists of the company's Expedia Business Services organization. It includes Expedia Partner Solutions, which provides travel services to leisure travelers via third-party company branded websites, and Egencia, a travel management company that offers travel services to businesses and their corporate customers. Revenue for the B2B segment plunged 72.2% in Q3 2020 to $203 million, comprising about 13% of Expedia's total revenue. The segment posted an adjusted loss before interest, taxes, depreciation, and amortization of $52 million in the third quarter, a significant change from the adjusted EBITDA of $149 million posted in the year-ago period.


Expedia's trivago segment is comprised of its hotel metasearch, or search aggregator, websites. The segment generates ad revenue primarily by sending referrals from those sites to online travel companies and travel service providers. Revenue for the segment sank 71.1% in Q3 2020 to $55 million, comprising about 4% of Expedia's total revenue. Adjusted EBITDA fell 41.7% to $7 million, making up about 2% of the total.

(Note: Expedia also provides a separate breakdown for a "Corporate and Eliminations" category, which includes certain shared expenses among its different segments, such as accounting, human resources, and other costs. It also includes business from Bodybuilding.com, which Expedia sold in May 2020. The financial results for this category were immaterial during Q3 2020 and are not included in the pie charts above.)

Expedia's Recent Developments

Expedia noted in its Q3 2020 earnings report that, although demand for travel continues to be significantly adversely impacted by the pandemic, it did see an increase in demand during the third quarter compared to earlier in the year. But with case counts of COVID-19 still rising, it will take some time before the travel industry fully recovers.