Skift Take
It may just be speculation, but if it were to go through, it would be one of the biggest shakeups the travel industry has seen in years.
Last week, the travel industry was abuzz after a Financial Times report reported that Uber may be exploring an acquisition of Expedia. While nothing has been confirmed, the speculation alone is enough to stir up significant debate. If this deal materializes, it could mark one of the biggest transformations in travel services in years.
Skift Research talked through 4 key questions:
1: So, What do we Know About the Deal?
In short, not much. All of this remains speculative. However, the ties between the two companies are hard to ignore. Uber’s current CEO, Dara Khosrowshahi, was the CEO of Expedia from 2005 to 2017. He worked closely with Barry Diller, Expedia’s Executive Chairman, who still holds considerable influence over the company, with 29% of Expedia’s voting power.
2: Why Would Uber Want Expedia?
One of the clearest reasons is Uber’s existing dominance in airport transportation, generating over $10 billion a year in bookings from this sector alone — that’s around 15% of the company’s total ridehailing business. Plus, Uber told Skift it logs nearly 700 million trips globally from users who are hailing rides outside their home cities, in other words travelers.
Uber has even trialed a travel booking service in the UK, offering flights and train tickets directly through its app. Early results suggest strong potential, with 60% of users rebooking trains and 30% rebooking flights, Khosrowshahi said at the Skift Global Forum in 2023.
With a growing airport business, hundreds of millions of travelers already using their app, and a successful UK booking trial, the company appears to be well-positioned to expand its travel services.
3: What’s In It For Expedia?
For Expedia, the benefits could include access to Uber’s massive user base. Expedia’s biggest challenge today is acquiring and retaining customers. It spends billions of dollars in marketing to bring customer’s onto its platform. It has also dedicated a large amount of time and resources to launching a new loyalty program, called One Key.
Perhaps incorporating Expedia’s travel offerings into a superapp could help reduce its marketing costs and edge out competitors like Booking.com and Airbnb.
4: What Could Go Wrong?
Expedia has heavily invested in its B2B platform, which helps third parties sell travel products. If Uber acquires Expedia, the future of this business model could be uncertain, and it might impact their partnerships with other travel companies.
Plus it raises the question of why Uber needs to buy Expedia outright. Today Uber has a partnership deal with Hopper to provide travel inventory. Why wouldn’t Uber expand the Hopper partnership or sign a similar agreement with Expedia? Both of those options are much cheaper than Expedia’s ~$20B price tag.
Finally, a merger of this scale could face major regulatory hurdles. In 2023 the European Commission blocked the proposed acquisition of eTraveli by Booking Holdings due to antitrust concerns.
