The Backdoor Conquest: How Expedia is Breaking Booking.com’s European Monopoly

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Distribution StrategyDistribution Trends 2026·12 January 2026·20 min read
The Backdoor Conquest: How Expedia is Breaking Booking.com’s European Monopoly
The European online travel market, long considered the impregnable fiefdom of Booking Holdings, has undergone a profound structural transformation over the eighteen months leading into early 2026.
For nearly two decades, the narrative of European travel distribution was singular: Booking.com’s agency model and superior execution allowed it to aggregate fragmented hotel supply more effectively than any competitor, creating a network effect that marginalised Expedia Group to a distant second-tier status in Europe although they dominated in the US.

However, a confluence of regulatory interventions, strategic pivots, and macroeconomic shifts has fractured this monopoly. As of the first quarter of 2026, Expedia Group has not only stabilised its position in the Europe, Middle East, and Africa (EMEA) region but has engineered a sophisticated, backdoor conquest of market share that is fundamentally altering the competitive dynamics of the industry.

This article identifies that Expedia’s improved performance is not the result of winning the traditional war for direct consumer traffic—a battlefront where Booking.com remains dominant—but rather the successful execution of an asymmetric strategy focused on Business-to-Business (B2B) infrastructure, regulatory arbitrage, and the integration of high-margin verticals such as experiences and fintech.

While Booking Holdings has been forced into a defensive posture by the European Union’s Digital Markets Act (DMA), which designated it a “gatekeeper” and dismantled its price parity enforcement mechanisms, Expedia has exploited its non-gatekeeper status to secure aggressive partnership deals and offer opaque pricing structures that its rival is legally barred from matching.

The divergence in financial performance throughout 2025 serves as the primary quantitative evidence of this shift. While Booking Holdings delivered a modest 10.3% stock return in 2025, weighed down by rising compliance costs and margin compression, Expedia Group surged 55.6%. This valuation gap reflects a market repricing of Expedia’s pivot from a volatile, high-marketing-cost B2C model to a “sticky,” high-margin B2B platform model. By powering the travel ecosystems of Europe’s largest financial institutions (Revolut), airlines (Ryanair, British Airways), and corporate travel managers, Expedia has effectively encircled Booking.com, capturing high-value demand at the source before it ever reaches a search engine.

Looking forward to 2026, the separation between these two giants will be defined by the “Battle for the Connected Trip.” Expedia’s pending acquisition of Tiqets  and its successful deployment of the “Open World” technology stack positions it to own the “experiences” and “fintech” layers of the travel stack, areas where Booking.com has historically struggled.

Conversely, Booking Holdings faces a precarious year of defending its core hotel margins against direct-booking campaigns emboldened by the DMA. This report provides an exhaustive examination of the actions, features, and macro-trends driving this divergence, offering a definitive assessment of Expedia’s strategic resurgence in the EMEA region.

The European Battlefield

To fully appreciate the magnitude of the shift observed in 2024 and 2025, it is necessary to deconstruct the historical market architecture of the European online travel agency (OTA) sector. Europe differs significantly from the North American market in its supply fragmentation. Unlike the United States, which is dominated by large hotel chains, the European lodging market is characterised by tens of thousands of independent, small-scale hoteliers.

Historically, Booking Holdings (formerly The Priceline Group) won Europe by perfecting the “agency model.” In this model, the consumer pays the hotel directly at the time of stay, and the hotel subsequently pays a commission to Booking.com. This was highly attractive to cash-strapped European hoteliers compared to Expedia’s “merchant model,” which required the OTA to collect payment upfront and remit it to the hotel later. By 2023, Booking.com commanded an estimated 60-70% share of the European OTA market, creating a “flywheel” where deep supply attracted consumer traffic, which in turn enforced supplier compliance.

However, by late 2024, the efficiency of this flywheel began to degrade. The very dominance that fuelled Booking’s rise attracted the scrutiny of regulators, while the post-pandemic normalisation of travel demand exposed the vulnerabilities of a pure-play B2C model.

The 2025 Performance Divergence

The divergence in performance between the two entities became undeniable in 2025. Financial data from the third quarter of 2025 highlights a stark contrast in growth vectors. Expedia Group reported a 12% increase in gross bookings year-over-year, driven primarily by a 26% surge in its B2B segment. This indicates that while Expedia’s consumer brands (Expedia, Hotels.com, Vrbo) grew at a steady pace, its enterprise business was expanding at more than double the rate of the market.

In contrast, Booking Holdings, while still growing revenue at 13% in Q3 2025, faced a 15% increase in operating expenses. This inversion—expenses growing faster than revenue—signalled to the market that the cost of maintaining its dominance in Europe was rising. The “moat” was no longer free; it required expensive maintenance in the form of legal fees, compliance teams, and increased marketing spend to counteract the loss of price parity.

The Macro-Economic Backdrop: Inflation and the Search for Value

The macroeconomic environment in Europe during 2024 and 2025 provided a fertile ground for Expedia’s resurgence. Persistent inflation across the Eurozone eroded consumer purchasing power, leading to a shift in booking behaviour. European travellers, traditionally brand-agnostic when it comes to OTAs, became increasingly price-sensitive and value-driven.

This shift favoured Expedia’s “package” capabilities. Because Expedia owns a robust air ticketing platform (unlike Booking.com, which relies heavily on third-party aggregators for flights), it could offer “bundled” pricing—opaque discounts where the price of the hotel and flight are merged. In an inflationary environment, the ability to hide a 20% hotel discount inside a package proved to be a decisive competitive advantage. Data from Q2 2025 showed a significant increase in the “0- to 13-day” booking window in EMEA, suggesting consumers were hunting for last-minute deals, a segment where bundled offers often convert best.

The Regulatory Earthquake - DMA

The single most significant external factor driving Expedia’s relative outperformance in EMEA is the asymmetric application of the European Union’s Digital Markets Act (DMA). This legislation has fundamentally re-engineered the rules of engagement in the European digital economy, creating a regulatory handicap for the market leader while leaving the challenger unencumbered.

The Gatekeeper Designation

On May 13, 2024, the European Commission officially designated Booking Holdings as a “gatekeeper” under the DMA. This designation is reserved for digital platforms that serve as a critical gateway between businesses and consumers, effectively acting as a bottleneck. Crucially, Expedia Group was not designated as a gatekeeper in Europe, as its user numbers and revenue in the region did not meet the specific thresholds set by the Commission.

This created a “two-tier” regulatory environment. From November 14, 2024, the compliance deadline, Booking.com was subject to a stringent set of obligations and prohibitions that did not apply to Expedia.

The Abolition of Price Parity (MFN Clauses)

The most consequential impact of the DMA was the prohibition of “price parity” or “Most Favoured Nation” (MFN) clauses. For two decades, Booking.com’s contracts with hoteliers included clauses that forbade the hotel from offering a lower room rate on their own website or on rival channels than the rate offered on Booking.com. This ensured that Booking.com always had the “best price,” protecting its conversion rates.

Under the DMA, Booking.com was forced to strike these clauses from its contracts in the European Economic Area (EEA). The immediate consequence was a “pricing revolt.” European hoteliers, eager to reduce their dependence on Booking.com and avoid the 15-20% commission fees, began aggressively undercutting the OTA on their direct channels. By mid-2025, industry analysts noted that Booking.com had lost its price leadership in key markets like France, Germany, and Italy.

Expedia’s Strategic Advantage: Because Expedia is not a gatekeeper, it faces fewer restrictions on its contracting capabilities. While it generally avoids enforcing wide parity clauses to stay in the good graces of regulators, it has doubled down on opaque pricing strategies. Expedia can negotiate “Member Only” rates or B2B rates that are not publicly viewable on a metasearch engine but are available to logged-in users or through partners like banks and airlines. Since these rates are “fenced,” they allow hoteliers to discount inventory without violating their own public rate integrity, funnelling volume to Expedia while Booking.com is left exposing the higher public rate.

Data Portability and the “Free Rider” Threat

Article 6(10) of the DMA mandates that gatekeepers must provide business users (hotels) with real-time, continuous access to data generated by their activity on the platform. This has armed European hoteliers with granular intelligence on Booking.com’s customer base. Hotels are now using this data to retarget guests after their first stay, encouraging them to book directly for their next visit.

This phenomenon creates a “free rider” problem for Booking.com: the platform incurs the massive cost of acquiring the customer via Google Ads (Performance Marketing), but the hotel captures the Lifetime Value (LTV) of that customer via direct bookings. Expedia, insulated from these strict data-sharing mandates and relying more on B2B partners who own the customer relationship, is less exposed to this specific erosion of LTV.

The Legal Quagmire: 10,000 Hotels vs. Booking.com

The regulatory shift has also emboldened legal action. In August 2025, a pan-European class-action lawsuit was filed against Booking.com, representing over 10,000 hotels. The suit seeks damages for “abusive” parity practices spanning the period from 2004 to 2024. The scale of this litigation—backed by 30 national hotel associations—has created a toxic environment for Booking.com’s supplier relations team.

Expedia has deftly capitalised on this animosity. By positioning itself as the “partner of choice” and emphasising its B2B enablement tools rather than its B2C dominance, Expedia has successfully wooed disgruntled hoteliers. The “Us vs. Them” narrative in Europe has shifted to “Hotels vs. Booking,” with Expedia positioning itself as a neutral infrastructure provider.

Financial Performance

The strategic shifts described above have manifested in concrete financial results. A forensic analysis of the quarterly earnings from late 2024 through 2025 reveals the extent of Expedia’s operational improvements.

Revenue and Gross Bookings (Q3 2025)

In the third quarter of 2025, Expedia Group delivered financial results that exceeded analyst expectations, signalling that its European strategy was bearing fruit.

Table 1: Comparative Financial Performance (Q3 2025)

Metric Expedia Group (EXPE) Booking Holdings (BKNG) Analysis
Gross Bookings Growth (YoY) +12% +14% (10% ex-FX) Parity in volume growth, closing the historic gap.
Revenue Growth (YoY) +9% +13% Booking retains top-line lead, but cost of revenue is higher.
B2B Revenue Growth +18% N/A (Segment not reported separately) Expedia’s growth engine is structurally distinct.
B2B Gross Bookings +26% N/A Explosive demand for white-label solutions.
Operating Expense Growth Controlled (Margin expansion) +15% Booking facing negative operating leverage.
Adjusted EBITDA Margin Expanded >200 bps 47.0% (Expanded 120 bps) Expedia driving efficiency faster from a lower base.

The standout metric is the 26% growth in B2B gross bookings for Expedia. This confirms that the company’s growth is coming from “wholesale” channels—selling inventory to Ryanair, Amex, and banks—rather than just retail channels. This revenue stream is characterized by lower marketing costs (no Google Adwords bidding) and higher contract stickiness.

Stock Performance and Valuation

The market’s reaction to these divergent paths was decisive in 2025. Expedia Group’s stock price increased by 55.6% over the year, compared to a modest 10.3% for Booking Holdings.

  • The Narrative Shift: Investors began to view Expedia not as a “broken” B2C brand, but as an infrastructure play. The high-margin B2B business warrants a higher valuation multiple because it is less susceptible to the volatility of search engine algorithm changes (SEO) or advertising price inflation (SEM).
  • Capital Allocation: Expedia aggressively returned capital to shareholders, repurchasing approximately 7.9 million shares for $1.4 billion in the first nine months of 2025. This confidence in its own cash flow generation stood in contrast to Booking’s more cautious approach amidst regulatory uncertainty.

Margin Expansion via Cost Discipline

Expedia’s margin expansion was also driven by rigorous cost discipline. The “One Key” platform unification allowed the company to retire legacy technology stacks, reducing server costs and engineering overhead. In Q1 2025, Expedia reported that its adjusted EBITDA increased 16% with 105 basis points of margin expansion, despite softer demand in the US. This operational leverage is a direct result of the multi-year technology migration that concluded in 2024, allowing the company to serve three brands (Expedia, Hotels.com, Vrbo) from a single code base.

The B2B Revolution: Rewiring European Distribution

If regulatory arbitrage provided the opportunity for growth, Expedia’s B2B division, Expedia Partner Solutions (EPS), provided the mechanism. The company’s strategy to “power the industry” rather than just compete with it has been the primary driver of its European success.

The “Open World” Ecosystem

Expedia’s B2B strategy is branded as the “Open World” platform. It involves unbundling the company’s massive technology stack—payments, fraud detection, customer service, and inventory—and selling these components via API to partners. This effectively turns Expedia into the “AWS of Travel”.

In 2025, Expedia introduced a new wave of APIs specifically designed for the European market:

  • Vrbo Inventory API: For the first time, over 1 million Vrbo vacation rental properties were made available to B2B partners. This was a critical development for Europe, where alternative accommodations (villas, apartments) are a massive segment. Previously, B2B partners like airlines could only sell hotels. Now, a partner like British Airways can sell a villa in Tuscany powered by Expedia/Vrbo.
  • Cancel For Any Reason (CFAR) API: Recognising the post-pandemic anxiety of European travellers, Expedia launched an API for CFAR insurance.16 This high-margin ancillary product drives significant revenue per transaction.

The Ryanair Partnership: A Historic Pivot

Perhaps the most symbolic and impactful B2B win in the last 18 months was the partnership with Ryanair. For years, Ryanair was openly hostile to OTAs, engaging in litigation and “screen-scraping” wars. However, in mid-2024, Ryanair signed a deal to make Expedia Group an “Approved OTA”.

  • The Mechanism: Ryanair’s flight inventory is now directly integrated into Expedia’s vacation package engine.
  • Strategic Implication: In Europe, Ryanair is the dominant carrier by volume. A vacation package (Flight + Hotel) is the most profitable product for an OTA. Before this deal, Expedia’s European packages were uncompetitive because they lacked the region’s cheapest flights. With Ryanair inventory, Expedia can now offer “Flight + Hotel” bundles that are price-competitive with any other operator. Booking.com, which has struggled to build a seamless flight product, lacks this depth of integration with the low-cost carrier sector.

Fintech and Loyalty Partnerships

Expedia has aggressively targeted the European financial sector, recognising that banks are seeking to increase app engagement by offering travel services.

  • Revolut Stays: Expedia powers the “Stays” feature within the Revolut app, Europe’s leading fintech with over 65 million customers. When a Revolut user books a hotel to get cashback, they are technically booking through Expedia. This partnership funnels millions of high-spending, digital-native European users to Expedia’s supply without Expedia spending a cent on marketing.
  • IAG Loyalty (British Airways): Expedia secured a long-term agreement to power the redemption of Avios points for hotels and cars. This partnership locks in the high-value corporate travellers of the UK and Spain (Iberia), a demographic that Booking.com’s mass-market brand struggles to capture.

The “Merchant of Record” Advantage

In many of these B2B deals, Expedia acts as the “Merchant of Record,” handling the payment processing and fraud checks. This is a capability Booking.com is still building out. Expedia’s expertise in handling complex, multi-currency transactions (critical in fragmented EMEA) has made it the preferred partner for banks and airlines who do not want the regulatory headache of being a travel merchant.

Product Innovation

While B2B has been the engine of growth, Expedia has not abandoned the consumer front. The last 18 months have seen significant, albeit controversial, changes to the product experience aimed at increasing customer lifetime value (LTV).

The “One Key” Loyalty Programme: A Strategic Pause

The unification of Expedia’s three loyalty programmes (Expedia Rewards, Hotels.com Rewards, and mere account creation on Vrbo) into a single currency called One Key was the flagship product launch of 2023/2024.

  • The Concept: A user earns “OneKeyCash” on any brand and can redeem it on any brand. Ideally, a family books a Vrbo summer house and uses the rewards to book a business hotel on Expedia in the winter.
  • The UK Launch & Backlash: One Key launched in the UK in September 2024. The reception was mixed. Heavy users of Hotels.com, who were accustomed to the simple “Buy 10 nights, get 1 free” (effectively 10% cashback) model, revolted against the new model, which offered only 2% cashback.
  • The European Pivot: Recognising the risk of churning high-value customers in competitive European markets, Expedia made a critical strategic decision: It paused the rollout of One Key to Continental Europe (France, Germany, etc.).
    • Why this was a success: By halting the rollout, Expedia demonstrated agility. It preserved the “Hotels.com Rewards” program in mainland Europe, which remains a powerful retention tool against Booking.com. This decision likely saved significant market share in 2025, preventing disgruntled users from defecting to the competition. It shows a company prioritising regional market realities over global corporate standardisation.

Artificial Intelligence: “Romie” and the Agentic Future

In May 2024, Expedia unveiled Romie, an AI-powered travel assistant. While Booking.com also has an AI trip planner, Romie’s architecture is fundamentally different and better suited to the European market.

  • WhatsApp Integration: Romie can be invited into SMS or WhatsApp group chats. In Europe, WhatsApp is the default communication tool for families and groups. Romie “listens” to the chat, summarises plans, and suggests real-time booking options. This places Expedia inside the conversation stream, upstream of the search engine.
  • Smart Search: Romie uses natural language processing to filter results based on complex queries (“Find a hotel in Paris near the Metro with a view of the tower for under €300”). This reduces the friction of applying multiple filters, an area where Booking.com’s UI has traditionally been superior.

“Set-Jetting” and Media-Led Commerce

Expedia’s “Unpack ’26” report highlights a massive trend in “Set-Jetting”—travel inspired by TV shows and movies (e.g., White Lotus driving travel to Sicily).

Shoppable Storefronts: Expedia launched shoppable storefronts for content creators, allowing influencers to curate trips that followers can book with one click. This capitalises on the European trend of social-commerce, moving Expedia into the “inspiration” phase of the funnel.

The "Experiences" Vertical

A critical component of Expedia’s 2026 strategy is the conquest of the “Experiences” vertical (tours, museums, activities). Historically, this has been a fragmented market dominated by niche players like GetYourGuide and Viator.

The Tiqets Acquisition

In late 2025, Expedia Group entered into an agreement to acquire Tiqets, an Amsterdam-based ticketing platform for museums and attractions. The deal is expected to close in the first quarter of 2026.

  • Strategic Rationale: Tiqets has deep, direct connectivity with major European cultural institutions (The Louvre, The Vatican Museums, The Rijksmuseum).
  • Differentiation: Booking.com relies largely on third-party aggregators (Musement) for its attractions supply. By owning Tiqets, Expedia secures the “source code” for European culture.
  • The “Connected Trip” Application: Expedia plans to integrate Tiqets inventory into its “Open World” API. This means that soon, an airline partner like Ryanair or a bank like Revolut will be able to sell museum tickets directly to their customers via Expedia’s pipes. This cross-selling capability significantly increases the average order value (AOV) and margin of Expedia’s B2B transactions.

What Separates These Giants in 2026?

As we look toward the remainder of 2026, the competitive landscape in EMEA will be defined by three key battlegrounds where the strategies of Expedia and Booking Holdings fundamentally diverge.

Control vs. Enablement

  • Booking Holdings (Control): Booking’s strategy remains B2C-centric. It seeks to be the single app for all travel needs (“The Connected Trip”), controlling the customer interface and maximising the share of wallet from its massive user base. However, this strategy is under siege from regulators who view such control as anti-competitive.
  • Expedia Group (Enablement): Expedia’s strategy is to be the operating system for the travel industry. By powering the travel ambitions of banks, airlines, and influencers, Expedia enables others to sell travel. In 2026, this “Enablement” strategy will likely yield higher margins and lower regulatory risk than Booking’s “Control” strategy.

The “Opaque” Pricing Moat

With price parity dead in Europe, the ability to distribute “opaque” rates (rates hidden inside packages or behind login walls) becomes the primary weapon for securing the best inventory prices.

  • Separation Factor: Expedia’s superior air inventory (thanks to the Ryanair deal) makes its “Flight + Hotel” opaque packages far more compelling than Booking.com’s offering. In 2026, expect Expedia to dominate the “Package” market in Europe, while Booking fights a brutal price war in the standalone hotel market.

The Loyalty Endgame

The divergence in loyalty strategies will come to a head in 2026.

  • Expedia: Will likely operate a hybrid model in Europe—One Key for the UK and potentially a revamped, localized version for the EU that retains the high-value perception of the legacy Hotels.com program.
  • Booking.com: Will continue to lean on its “Genius” programme. However, as hotels revolt against paying commissions, Booking may struggle to force hoteliers to fund Genius discounts, potentially diluting the program’s value proposition.

So, is Expedia Getting Ahead in EMEA?

The evidence from the last 18 months supports a definitive conclusion: Yes, Expedia Group is achieving greater success in EMEA, but it is a success defined by profitability and influence rather than raw traffic or booking volume.

Expedia has not displaced Booking.com as the most visited travel website in Europe. However, it has successfully executed a strategic pivot that has allowed it to:

  1. Outperform Financially: Delivering superior shareholder returns (+55.6% vs +10.3% in 2025) and margin expansion.
  2. Exploit Regulatory Weakness: capitalising on Booking.com’s “gatekeeper” handicaps to secure better deals and partner relationships.
  3. Dominate the Backend: Becoming the indispensable infrastructure partner for the continent’s largest travel sellers (Ryanair, Revolut).

In 2026, the separation between the two giants is stark: Booking Holdings is fighting a defensive war to protect its B2C monopoly from regulators and hoteliers, while Expedia Group is fighting an offensive war to wire the B2B infrastructure of the European travel economy.

For the first time in decades, the momentum in Europe has shifted away from the incumbent. Expedia’s “Open World” is not just a slogan; it is a functioning, high-growth ecosystem that has finally cracked the code of the European market.

Sources:

Financial Performance & Market Analysis (2025)

Regulatory Environment (Digital Markets Act)

B2B Strategy & Partnerships

Product, Loyalty & Trends

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