Airbnb or what’s new in the travel site industry?

10. Hobby General
10. Hobby Generalessay

This article came out a few days ago.

エクスペディア、今度はオービッツを買収 – WSJ

This is the acquisition of Orbitz by travel site giant Expedia. There seems to be a lot of restructuring news related to travel sites recently. I wonder if the restructuring is accelerating. I also travel a lot, but I didn’t know about Orbitz. And I’ve never used Expedia in the first place.

It’s a good opportunity for me to think about travel sites again.

The world’s leading travel websites

First, a brief review of the three leading travel sites in the world.


It has a market cap of $57.7 billion and sales of $8.4 billion (as of February 2015, from Yahoo Finance). It is the number one company in terms of sales, and in terms of market capitalization, it beats out the second place and below by a wide margin.




With a market cap of $12.1 billion and revenue of $1.6 billion (as of February 2015, from Yahoo Finance). It is also very famous as the world’s largest review travel site. And it has become an indispensable part of everyday travel. By the way, TripAdvisor was originally a division of Expedia, but it was spun off from Expedia in December 2011. It is now the same size in terms of market capitalization as its original parent Expedia, which is an amazing growth.

In my case, I often use TripAdvisor to find good restaurants in my destination.

ちなみにフランス国内のレストラン予約に関しては、la fourchetというサイトと連携されているので、このサイトからフランスでのレストランを事前に予約したことがありましたが、基本的には現地での利用が多いです。


With a market cap of $11.3 billion and sales of $6.5 billion (as of February 2015, from Yahoo Finance). Compared to TripAdvisor, I was surprised to see that while its revenue is much higher than TripAdvisor’s, it is still small, albeit only slightly, in terms of market capitalization. Actually, I haven’t used this Expedia much. Why is that? I’m convinced by the difference in business models, which I’ll explain next.

But maybe it’s worth using more for me, so I’ll look into it again.

Agency type and merchant type

These are the two main business models of travel sites. The former, agency type, is a business model where the hotel side pays a fee to the travel site side. The user does not pay any fees to the travel site. As a general rule, the payment is made directly at the site. Priceline’s main service,, is exactly this type.

In the other type of merchant, all the user’s payments are made on the travel site. Expedia is the main player in this type. This is more of a traditional business model. Travel agencies with physical stores are basically of this type. I see, so that’s why I don’t use it much.

Of course, it’s not a complete split between the two, with Priceline offering merchant-type services and Expedia offering agency-type re-services. It’s just a difference of which one is the main player.

By the way, there is a business model by providing information, and the representative example is TripAdvisor. Pay per click, advertising revenue, affiliate, etc. are the main sources of revenue.

Agency type and merchant typeどっちがいい?

The good thing about merchant sites is that they offer a high commission rate for companies, partly because they have a payment function. However, for the more free and flexible traveler, I don’t think this service is very attractive.

For those who want to travel while flexibly changing their plans locally, I think agency type sites are by far the easiest to use. Especially when looking for a place to stay on the same day, the agency type is definitely more convenient. I think that’s why I also use Priceline’s service,

I wonder if there is a background to Expedia’s recent acquisition of Orbitz.

Initially, the industry pioneer Expedia was the largest player in the industry, but the rapid growth of Priceline in the 2000s has largely reversed that position, making it easier for independent travelers to use the agency model rather than the traditional merchant model. I guess.

Therefore, they must have felt the necessity to enhance their fast-growing agency-type website.

Aibnb momentum unstoppable?

These are the three main global travel sites, and their scale is outstanding compared to other travel sites. Other than these, there are a few sites such as, which operates in China and other countries, but they are basically smaller sites for local travel.


Airbnb’s momentum doesn’t seem to be stopping in 2014.

reference article

Airbnb guests triple, hurting Priceline, HomeAway

For the year 2014, Airbnb’s booking revenue (which I assume is the total cost of a booked hotel stay, not travel site revenue) was $5.5 billion, according to a research firm called Cowen and Co. was $5.5 billion, which is still not quite comparable to Priceline’s $46 billion or Expedia’s $20 billion, but it’s still a good share of the market there.

As I wrote in my blog before, I used Airbnb for the first time in Morocco where I am going to go at the end of this April, and I have booked 3 things immediately. From now on, I’m thinking to look for a place to stay with Airbnb as the first priority.

Airbnb’s, especially in cities, are by far the cheapest! And most importantly, they’re fun.

AirbnbはAgency type and merchant typeの良いとこ取り?

You might expect Airbnb to be an agency type based on its recent momentum and trends, but that is not the case. The credit card payment occurs as soon as the reservation is confirmed, so it can be said to be a merchant type.


Although Airbnb is a merchant in terms of business model, it is actually an agency in terms of the importance of this response factor. As mentioned above, the agency model is preferred by independent travelers who prefer a freer style.

I think Airbnb’s strength comes not only from the fact that it’s relatively cheap, but also from its business model, which is merchant-based but also has the flexibility of an agency-based model.

What is the market value of Airbnb?


(Source: Yahoo Finance, processed by

Is Airbnb or the future?

The travel website industry is also one of the most competitive. Even though it was still the early days of the Internet, the former Priceline quickly overtook Expedia in 2000, and now has more than quadrupled in size. Priceline can’t afford to rest on its laurels.

I’ve also switched to Airbnb-centric bookings for my GW trip this year, rather than the method I’ve always used. It’s interesting because it’s new, but for people who are used to traveling a lot and don’t have language barriers, this Airbnb method seems to be much more fun and convenient.

However, most still Airbnb is not enough. Especially in rural areas, it is not yet widespread. I think that is proud of the strength and the amount of information by far even in the countryside because of its long history. I also made a reservation by in a local city in GW of this year.

Of course, price is important as well as the number of places to stay, so I don’t think that Airbnb will become the center of the market just because it’s interesting and fun. In fact, Airbnb is not necessarily cheap.