Travel demand remains strong, but a quieter battle is unfolding over who controls your next vacation. Hotels want customers booking directly through loyalty programs, while online platforms are expanding their reach across accommodations, transportation, and experiences.
Booking Holdings reports Tuesday, putting five travel companies and their competing business models in focus.
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Theme: Online Travel Platforms, Hotel Bookings, Loyalty Programs, Alternative Accommodations, and Travel Distribution
Everyone Wants to Own Your Reservation
When someone books a hotel room, several companies might compete to earn money from that transaction.
The hotel provides the accommodation, but an online travel agency might handle the reservation, collect payment, and receive a commission.
Platforms like Booking.com and Expedia generate billions by connecting travelers with hotels. Meanwhile, hotel chains are investing heavily in loyalty programs and direct-booking technology to keep customers within their ecosystems.
The latest numbers demonstrate the scale of this competition.
Booking Holdings processed $51 billion in gross bookings during the second quarter, up 9% year over year. Room nights increased 5% to 325 million, while revenue grew 8% to $7.4 billion.
Expedia reported 12% gross booking growth, with its business-to-business division expanding 21%.
The opportunity is substantial, but so are the costs of attracting customers.
Booking alone spent approximately $2.4 billion on marketing during Q2, equivalent to 4.7% of gross bookings.
For investors, the central question is which companies can continue growing without surrendering too much profit to customer acquisition.
What's Driving It
Booking Reports Tuesday
Booking Holdings releases third-quarter results Tuesday, November 3, after the market closes, with its earnings call scheduled for 4:30 p.m. ET.
The company enters earnings with momentum across hotel reservations, alternative accommodations, and international travel.
But the more interesting development involves customer relationships.
During Q2, roughly the mid-50% range of Booking's total room nights came through direct channels on a trailing 12-month basis, similar to the previous year.
That matters because customers returning directly to Booking.com are less dependent on paid advertising or outside search engines.
Booking is also investing in its Connected Trip strategy, designed to integrate accommodations, flights, transportation, and other travel services into a single platform.
If customers increasingly book entire vacations through one application, the opportunity extends beyond hotel commissions.
Hotels Are Fighting Back
Marriott and Hilton are pursuing a different strategy.
Rather than relying exclusively on third-party booking platforms, they're using loyalty programs to strengthen customer relationships.
Marriott Bonvoy exceeded 295 million members during Q2, while its worldwide development pipeline reached approximately 629,000 rooms.
Hilton's third-quarter results showed 5.8% revenue per available room growth, while its development pipeline reached 543,100 rooms.
Both companies benefit from asset-light business models that generate management and franchise fees without owning most of their hotels.
Direct reservations can also help hotel owners reduce distribution costs.
The Chain Reaction
Travel demand increases → booking platforms capture more reservations → hotels invest in direct-booking incentives → loyalty programs become more valuable → customer acquisition costs influence profitability → companies with stronger customer relationships gain an advantage
The risk is that competition for travelers drives higher marketing spending and lower margins.
What's Working
Travel Platforms Are Expanding Their Reach
Expedia's business-to-business operation is becoming an increasingly important growth engine.
Its Q2 B2B revenue increased 23%, demonstrating how the company's technology can power bookings through airlines, financial institutions, and other travel businesses.
Airbnb is also moving beyond its traditional vacation-rental model.
Second-quarter gross booking value increased 16% to $27.2 billion, while revenue grew 17%.
The company is expanding into boutique hotels, experiences, and additional travel services. Hotel nights booked grew approximately three times as fast as its homes business during Q2, although hotels remain a relatively small part of the platform.
AI Could Change the Booking Process
Artificial intelligence introduces another competitive variable.
Travel platforms are developing tools that can recommend destinations, compare accommodations, and simplify complicated itineraries.
But AI assistants operated by search engines and other technology companies might eventually direct customers toward competing reservation services.
That makes control over customer relationships increasingly valuable.
What to Watch
Tuesday's Booking report should focus on room-night growth, gross bookings, marketing spending, direct reservations, and operating margins.
Watch whether Booking's expanding services and loyalty programs are improving customer retention without requiring substantially higher advertising expenses.
Expedia follows with earnings Wednesday after the close, providing another comparison.
The strongest signal would be sustained booking growth alongside improving profitability and greater direct customer engagement.
Booking Holdings (BKNG)
What it does: Operates Booking.com, Priceline, Agoda, KAYAK, and other global travel platforms.
Why it fits: A leading online travel distributor with exposure to accommodation bookings, transportation, and travel services.
What stands out: Q2 gross bookings increased 9% to $51 billion, while adjusted EBITDA reached $2.6 billion.
The Takeaway: Buy this if you want the established online travel leader with substantial scale and opportunities to expand customer relationships.
The risk is rising marketing costs and competition from AI-powered travel services.
Expedia Group (EXPE)
What it does: Operates Expedia, Hotels.com, Vrbo, and a large business-to-business travel technology platform.
Why it fits: Benefits from consumer travel demand while expanding its distribution services for other businesses.
What stands out: Q2 B2B gross bookings increased 21%, while total revenue grew 14%.
The Takeaway: Buy this if you want a travel platform benefiting from both consumer reservations and growing B2B partnerships.
The risk is intense competition and weaker travel demand.
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Airbnb (ABNB)
What it does: Connects travelers with vacation rentals, boutique hotels, experiences, and travel services.
Why it fits: Offers an alternative distribution model that increasingly competes with traditional hotel booking platforms.
What stands out: Q2 gross booking value increased 16%, while adjusted EBITDA grew 21%.
The Takeaway: Buy this if you want a differentiated travel platform expanding beyond vacation rentals.
The risk is regulatory restrictions, accommodation competition, and slower booking growth.
Marriott International (MAR)
What it does: Operates and franchises global hotel brands, including Marriott, Sheraton, Ritz-Carlton, and Westin.
Why it fits: Its loyalty ecosystem encourages direct reservations and supports recurring franchise and management fees.
What stands out: Marriott Bonvoy surpassed 295 million members in Q2, while its development pipeline reached approximately 629,000 rooms.
The Takeaway: Buy this if you want an asset-light hotel leader with powerful brands and customer loyalty.
The risk is weaker hotel occupancy and slowing international travel.
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Hilton Worldwide (HLT)
What it does: Operates and franchises hotels across luxury, full-service, and economy accommodation markets.
Why it fits: Its direct-booking ecosystem and expanding hotel network support recurring fee revenue.
What stands out: Q3 revenue per available room increased 5.8%, while its development pipeline reached 543,100 rooms.
The Takeaway: Buy this if you want hotel-industry exposure through an expanding portfolio and established loyalty network.
The risk is weaker room pricing and a slowdown in hotel development.
The Booking Is Becoming the Business
Travel growth creates opportunities for hotels and digital platforms, but they don't capture value in the same way.
Booking and Expedia focus on distribution, Airbnb expands accommodation choices, and Marriott and Hilton use loyalty programs to retain customers.
Tuesday's Booking results will offer another test of their competitive positions.
The biggest long-term winner may be whoever owns the customer relationship, not necessarily whoever provides the room.
Best Regards,
— Adam Garcia
Elite Trade Club
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