Airbnb is starting to lose its grip on the online travel market. As for first quarter revenue, the company still posted a stronger than expected performance, but its latest guidance hinted at a momentum slowing down which investors hadn’t dealt with for years. Following the company’s warning that geopolitical instability in the Middle East would hinder bookings growth shares fell about 1.5%.
The timing couldn’t have been more worse for Airbnb, especially when its rivals like Expedia Group and Booking Holdings continue diversifying beyond the traditional vacation-rental playbook. Expedia’s second quarter is expected to gross bookings between $32.5 billion and $33.1 billion, despite the company’s acknowledgement of cancellations tied to the conflict. But it's a matter that they can afford to brush off since the Middle East represents only about 2% of Expedia’s business. small enough to sting but not derail the broader machine.
By 2025 Booking Holdings’ trailing twelve-month revenue reached $27 billion, followed closely by Expedia at $15 billion. Airbnb, in comparison, gathered $12 billion, reinforcing how its rivals are doing better across the global travel market.
Yielding to rivals
While Airbnb continues to remain tied with discretionary leisure demand, Expedia’s business mix is building a stronger portfolio. The company cut down its quarterly loss and sustained it to just $6 million, as opposed to the $200 million loss they incurred just a year before. But its business-to-business division, which is responsible for powering hotel and travel infrastructure, saw a 25% surge in the quarter, compared to the 8% growth in its consumer-facing operations.
That diversification advantage is becoming more palpable across the travel sector on a broader scale. While Airbnb’s revenue did grow 12.0% year over year, Booking Holdings slightly did better with a margin of 12.7% growth. Coupled with the fact that Booking’s revenue growth over the past 12 months reached 13.0%, ahead of Airbnb’s 10.3%. In terms of profitability the gap is even larger with Booking posting a last-twelve-month margin of 34.5%, alongside a three-year average margin of 31.4% further cementing the fact that travel platforms are increasingly winning on operational scale, not just bookings growth.
For Airbnb, the challenge is that the post-pandemic travel boom is fading at a time when their rivals are becoming bigger, broader, and more resilient.
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