How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
In short
Expedia Group makes money by taking a cut of travel booked through its sites and partners. In FY2025 it processed $119.6 billion of gross bookings and kept 12.3% as revenue, which came to $14.7 billion. Hotels drive most of it: lodging was 80% of revenue, and the merchant model, where travelers pay Expedia upfront, brought in $10.3 billion.
Born in 1996 as a travel platform of Microsoft, it would be spun off later on. Expedia became among the largest online travel agencies (OTAs) which comprises a set of brands that go from Hotels.com, Vrbo, Orbits, CheapTickets, ebookers, Travelocity, Trivago and others. Expedia business model follows a multi-brand strategy.
Lodging accounted for 80% of FY2025 revenue, and the 10-K says hotels generate the majority of it. Booked room nights grew 8%. Supplier contracts are mostly percentage-based, so room rates feed straight into what Expedia earns per night.
Expedia revenue by fiscal year, FY2021 to FY2025, from the company's filings. Chart: The Business Engineer.
By businessmodel, merchant revenue, where travelers pay Expedia and it pays the hotel later, was $10,256 million. Agency commissions brought in $3,183 million, and advertising, media and other $1,294 million. EG Advertising grew 19% to $758 million, and trivago’s third-party revenue grew 33% to $417 million.
How Expedia compares
Across its own segments, B2C (Expedia, Hotels.com, Vrbo) remains the largest, with $9,474 million of revenue, up 2%. B2B, which supplies inventory to airlines, travel agents, retailers and banks, grew 18% to $4,842 million, or 32.9% of the total (30.0% a year earlier).
B2B earns more per booking dollar: its revenue margin was 13.6%, against 11.3% for B2C. On Adjusted EBITDA, the company’s segment measure, B2C made $2,798 million and B2B $1,257 million. Revenue has risen from $8,598 million in FY2021 to $14,733 million in FY2025.
Revenue rose 8% and operating income rose 42% to $1,871 million, lifting operating margin from 9.6% to 12.7%. The company credits revenue growing faster than costs: cost of revenue fell to 9.9% of revenue from 10.5%, and technology and content spending fell by $37 million.
Expedia revenue by line, prior year against FY2025, as reported. Chart: The Business Engineer.
Direct marketing rose $503 million to $7,349 million, which the company attributes mainly to B2B partner commissions. Expedia reinstated its dividend, paying $1.60 per share, and spent $1.9 billion acquiring shares. It also booked a $178 million Italian withholding tax settlement.
What to watch
Distribution is the main exposure. With direct marketing at 49.9% of revenue, the 10-K says Google’s own travel products and AI search platforms may cut traffic or force Expedia to replace unpaid traffic with paid traffic.
The company says that if consumers move to AI-driven platforms where it lacks a significant presence, it could lose market share and face higher marketing costs. Hotel chains pushing direct bookings and disputed IRS transfer-pricing adjustments are also flagged.
Frequently asked questions
How does Expedia make money?
It takes a cut of travel booked through its brands and B2B partners. In FY2025 that cut, the revenue margin, was 12.3% of $119.6 billion in gross bookings, giving $14.7 billion of revenue. Lodging made up 80% of that revenue.
What is the difference between merchant and agency revenue?
In the merchant model, travelers pay Expedia when they book and Expedia pays the hotel later. In FY2025 this brought in $10,256 million. In the agency model, Expedia earns a commission and the traveler usually pays the hotel. This brought in $3,183 million.
How big is Expedia's B2B business?
B2B revenue was $4,842 million in FY2025, up 18%. That is 32.9% of total revenue. B2B gross bookings grew 20% to $35.7 billion.
How much does Expedia spend on marketing?
Direct selling and marketing was $7,349 million in FY2025, or 49.9% of revenue. Including indirect costs of $836 million, the total was $8,185 million, about 55.6% of revenue.
Born in 1996 as a travel platform of Microsoft , it would be spun off later on. Expedia became among the largest online travel agencies (OTAs) which comprises a set of brands that go from Hotels.com, Vrbo, Orbits, CheapTickets, ebookers, Travelocity, Trivago and others.
Over the years Expedia has become a portfolio of brands, which spans across several verticals:
Brand Expedia: a full-service online travel brand with localized websites in over 40 countries covering 27 languages offering a wide selection of travel products and services.
Hotels.com: marketing and distributing lodging accommodations.
Vrbo (previously HomeAway): an online marketplace for the alternative accommodations industry.
Expedia Partner Solutions: a white label or co-branded ecommerce template solutions (Hotels.com for partners; or Expedia.com for partners; or a agent booking tool, Expedia TAAP).
Egencia: a full-service travel management company offers travel products and services to businesses and their corporate travelers
Orbitz, CheapTickets, ebookers.
Travelocity.
Hotwire travel booking service that matches flexible, value-oriented travelers with suppliers who have excess seats, rooms and cars they offer at lower rates than retail.
Wotif Group: a leading Australian online travel company, comprised of the Wotif.com, lastminute.com.au and travel.com.au brands in Australia, and Wotif.co.nz and lastminute.co.nz in New Zealand.
trivago: majority-owned hotel metasearch company, based in Dusseldorf, Germany.
Expedia Local Expert: online and in-market concierge services, activities, experiences, attractions and ground transportation.
CarRentals.com: online car rental marketing and retail firm offering.
Classic Vacations: full line of accommodations, from mid-tier to luxury (including suites, villas and residences), competitive pricing
Expedia CruiseShipCenters: North Americaโs leading cruise specialist
SilverRail Technologies, Inc: ecosystem of rail carriers and travel distributors around the worldโs most comprehensive rail search and booking platform
Here some of the brands part fo Expedia facilitate the booking of hotel rooms, alternative accommodations, airline seats, car rentals and destination services. For those transactions Expedia acts the merchant of record (it processes the transactions making sure they are compliant to standards of privacy and security). Most of Expedia merchant transactions relate to lodging bookings.
The agency model
Here some the brands part of Expedia portfolio facilitate travel bookings and act as “the online agent” in the transaction. In turn Expedia receives commissions or ticketing fees from the travel supplier and/or traveler.
The advertising model
Here Expedia offers travel and non-travel advertisers through its various media and advertising offerings across its websites, as well as through meta โ as explored in the interface layer wars reshaping consumer tech โ search site, trivago .
Marketing channels used by Expedia in the pre-COVID era
Over the years Expedia used primarily online advertising in the form of search engine marketing and optimization, metasearch, social media websites, brand advertising through online and offline channels, loyalty programs, mobile apps and direct and/or personalized traveler communications on its websites and direct e-mail communications.
Post-Google Travel era
In February 2018, Google launched Google Trips. As Google explained at the time:
Planning a trip involves lots of searching for flights, hotels, things to do, itineraries and more. The process is often cumbersome because we have to use multiple tools to gather everything we needโespecially on a mobile phone.
So Google Trips was announced as a way to โhelp users explore options and make decisions on their smallest screens.โ
In 2019, Google Trips got even better, much much better:
In short, Google entered at full speed and force the travel industry by enabling end users to perform the whole travel navigation from searching to booking.
As reported on skift.com, Expediaโs CEO, while answering questions in a media briefing at the Expediaโs Explore โ18 conference in Las Vegas, Okerstrom announced, โThe internet has been littered with the bodies of companies put out of business by Google.โ
As Peter Maxwell Kern – Expedia Group, Inc. – CEO & Vice Chairman explained in the Q1 2020 press releases:
As far as the bigger cutting back marketing, OTA story. I recognize, as Google and others have pushed their way to disintermediate all of us, that has created challenges. I think there’s also been challenges as we’ve all tried to continue to drive growth and weren’t finding other ways to drive it as effectively.
How did Expedia react? And how is it reorganizing? Peter Maxwell Kern explained:
I would say the things that give me encouragement are, first of all, while we don’t have the volumes to test it right now, we do have an opportunity of an entire reset because we’ve essentially gone to virtually no marketing. And as we wade back in, we’re able to be more precise, be more constrained, watch and learn and grow into it and not just dive back in head first and spend back to the levels we were at.
As Expedia had to cut back on marketing activities due to the fall of bookings in the travel sector, during the COVID, Expedia is now rethinking its whole marketing (and business) strategy. Peter Maxwell Kern further explained:
We’ve chased unhealthy growth over the years. And Google and other performance marketing channels have tried to disintermediate us and we’ve made some not terribly smart choices along the way. We believe that this reset of the virus will give us an opportunity.
While Expedia has always been pushing on online marketing, it also invested substantially in paid performance marketing, which over the years proved inefficient. And this came out as the crisis hit, and Google itself entered the travel space with an enhanced Google Travel.
As Peter Maxwell Kern highlighted:
I mean, we’ve been talking about this for a while that as we wade back into the marketplace, to be much more disciplined to only chase real growth, real valuable growth, healthy growth and not be stuck chasing performance marketing and entering into dis-economic auctions. So we intend to be much better about that. We intend to keep those customers longer. We intend to serve them better and keep those direct relationships going strong.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
