How Do We Expect Expedia’s Hotels Division To Trend?
Expedia’s hotels division contributes around 70% of its revenues and around 78% of our stock price valuation for the company. Being the second largest online travel agency (OTA) in terms of revenues, Expedia has one of the most extensive network of accommodations on its platform. The company grows through both organic and inorganic means. Expedia’s 2015 acquisitions included big players including Travelocity, Orbitz, and HomeAway, which helped in the consolidation of the U.S. OTA market. Internationally, Expedia entered into a partnership with China’s OTA leader, Ctrip, and sold its stake in the loss-making Chinese OTA, eLong. As a growing number of people move to buy their travel online, and the online penetration of travel expenditures increases, companies like Expedia will tend to benefit further. We expect the growth story of Expedia’s hotel segment to continue in the future with a CAGR of ~14% over the next 7 years.
Have more questions on Expedia? See the links below.
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