Expedia's different bet

Booking.com sells visibility. Expedia sells plumbing. In an AI-disrupted market, plumbing may be the better business—but it's still plumbing

Booking.com and Expedia look like the same business. They're not.

Booking.com optimized for consumer margins. Expedia built infrastructure for others. That difference may determine which company survives AI disruption intact—and which doesn’t.

The plumbing business

Expedia Partner Solutions powers travel for 70,000+ businesses. When you book through Chase Travel, United Airlines, or Walmart+, you're often using Expedia's backend without knowing it. Chase Travel—which sources hotel inventory from Expedia—did $11.3 billion in sales in 2024.

The economics are counterintuitive. B2B eliminates marketing costs—Expedia doesn't bid on Google keywords to reach Chase cardholders. Even after splitting commissions with partners, Expedia keeps more margin than on consumer bookings because there's no marketing spend to recoup. In Q1 2025, B2B delivered a 22.8% EBITDA margin versus 11.1% for consumer. The segment has posted double-digit growth for 17 consecutive quarters.

This is why Booking Holdings hasn't gone all-in on B2B. Booking.com's consumer margins are far higher than Expedia's—so B2B would be a step down for Booking.

Why this matters for AI

When OpenAI launched ChatGPT Apps in October 2025, the travel partners were Expedia and Booking.com. When Perplexity built its Comet browser, Expedia was there. When Microsoft integrated travel into Copilot, Expedia again.

AI platforms need aggregated inventory, standardized APIs, real-time availability, and payment processing. Hotels can't provide this at scale. The technology stack required to be an AI booking partner is exactly what OTAs spent two decades building—and exactly what Expedia has been selling to banks and airlines since before ChatGPT existed.

Booking.com had to learn how to be a backend supplier. Expedia already was one.

The catch

These partnerships may be surrenders disguised as wins.

When ChatGPT recommends a hotel, that recommendation has value. Today, Booking.com collects visibility premiums through placement fees. Tomorrow, OpenAI or Google might collect them directly—while Expedia processes bookings at commodity rates.

The exceptional value in OTAs was never booking infrastructure. It was visibility control. B2B trades that power for volume. You're no longer the gatekeeper; you're the plumbing.

And the plumbing itself isn't permanent. Model Context Protocol is creating standardized connections that let AI platforms access hotel inventory directly. Apaleo launched the first PMS-based MCP server in September 2025. Selfbook partnered with Perplexity to enable direct bookings across 140,000 properties—no OTA commission.

GDS providers, CRS vendors, and hotel brands are all building or planning MCP integrations—each positioning to become AI's preferred booking pipe. AI platforms will have multiple paths to inventory—OTAs won't be the only ones.

The investment case

Expedia trades at 13-14x forward earnings versus Booking's 19-21x. The discount reflects years of underperformance: weaker margins, messier brand portfolio, painful technology migrations.

But the discount assumes both companies face the same AI risk. They don't.

Booking.com faces the risk of losing travelers entirely—its interface becomes irrelevant when AI handles discovery. Expedia faces a different risk: becoming invisible infrastructure while AI platforms capture the customer relationship and the premium economics.

Both outcomes are worse than the status quo. But Expedia's is more survivable. Infrastructure providers don't command visibility premiums, but they don't disappear either. Amadeus and Sabre have operated as travel plumbing for decades.

Expedia made a different bet than Booking.com. If it works, the company becomes the Amadeus of accommodation: essential infrastructure, modest multiples, and a business that survives disruption by not being worth disrupting.

by Markus Busch, Editor and Publisher of Hospitality.today.

Read also: The erosion of Booking.com

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