Expedia put booking in travelers’ hands, moved into hotel economics, and built a second distribution business through partners.
Enabling technology shiftBarriers to participation
In 1996, consumers often relied on travel agents to compare and book flights. Reservation systems could hold extensive inventory while remaining difficult for an occasional traveler to use. The web created a route to put prices, schedules and booking in the same consumer interface. Hotels also needed ways to fill rooms, with many smaller properties lacking the distribution resources of large chains. EX1 EX2
Step 1 of 4 · 1996–99
Microsoft launched Expedia on the web in October 1996, combining flight, hotel and car reservations with travel information. In Skift’s oral history, Richard Barton describes moving away from a CD-ROM concept as the web became a practical distribution channel. The team worked on presenting fares and schedules in ways consumers could use. EX1 EX2
The change put an important part of the travel agent’s work directly in the customer’s hands. A traveler could examine tradeoffs and complete a booking in one session. Microsoft supplied resources and visibility, but the product still had to translate specialist reservation systems into a usable consumer experience. The oral history connects that interface work to the emerging opportunity. EX2
Rivals Travel agents and earlier command-driven reservation access were the actual alternatives. The improvement concerned the work required of the traveler, not the invention of electronic reservations.
Step 2 of 4 · 2000–05
Expedia acquired Travelscape in 2000. Participants in the Skift history describe how hotel merchant arrangements became central to the business, alongside the airline booking service. Expedia could obtain a hotel rate and earn a margin when selling the reservation to the traveler. EX2
Hotels made the commercial opportunity larger than a convenient interface for flights alone. Lodging suppliers wanted occupancy, while a distributor with demand could help fill rooms. Acquiring specialist capability accelerated entry into those economics. This should not be described as Expedia buying unsold rooms at its own risk: the 2024 filing explicitly says its merchant hotel business generally has no inventory risk. EX4
Rivals Booking.com’s early agency model instead emphasized travelers paying the hotel and the hotel paying a commission. These were different initial supplier and payment offers; both groups later operated mixed models.
Step 3 of 4 · 2006–24
Expedia’s B2B business supplied travel inventory and technology to partners, including financial institutions, airlines, other travel companies and travel agents. Its routes included the Rapid API, white-label services and the Travel Agent Affiliate Program. In 2024, B2B revenue reached $4.102 billion, compared with $3.388 billion in 2023. EX4 EX5
This gave Expedia a way to earn from travel demand that another company acquired. A partner could add booking to an existing customer relationship while relying on Expedia’s supply and technology. The revenue contribution shows that the channel was commercially substantial. A history focused only on Expedia.com, Hotels.com and Vrbo would miss this part of the business. EX4 EX5
Rivals A bank or airline could assemble accommodation supply and booking systems itself, work with another distributor or buy those capabilities from Expedia. Partner economics therefore differ from acquiring every traveler for an owned consumer brand.
Step 4 of 4 · 2020–24
Expedia moved Hotels.com and Vrbo onto a unified front-end platform in 2023 and introduced One Key across its principal consumer brands in the United States. One Key reached the United Kingdom in 2024, while further international rollout was paused. Total 2024 bookings were $110.921 billion and revenue was $13.691 billion. EX4 EX5
The work reveals a cost of growing through separate brands and acquisitions: customer relationships and technology do not automatically become one system. Shared tools and rewards were intended to make the combined portfolio more useful and efficient. The paused rollout prevents treating the intended benefits as fully realized. Meanwhile, the B2B business shows a different route for putting common infrastructure to work. EX4
Rivals Booking’s core accommodation business developed around a more concentrated booking engine. Expedia had to preserve distinct brands while trying to share more of the machinery behind them.
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