Travel Is Back, but This Stock Still Has a Bumpy Road Ahead

Airports are maxed out because travelers are finally getting out after a two-year hiatus. During the lengthy layover in the global travel market, a new competitor -- Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google Travel -- was born. The growing Google Travel service has advantages over Expedia (NASDAQ: EXPE) and other online travel platforms. As travelers return to business as usual, Expedia may not. Here's why.

Online-travel platforms, like Expedia and its subsidiaries -- Hotels.com, Vrbo, Travelocity, Hotwire, Orbitz, and trivago -- grew their top lines rapidly for over a decade. For instance, Expedia generated just over $3 billion in revenue in 2010. Through acquisitions and organic growth from travelers embracing online platforms, Expedia grew its revenue at an impressive 16.7% annual rate to $12 billion in 2019 before the coronavirus put the brakes on travel altogether.

Most online-travel platforms are commodity-like in that hotels, airlines, and car-rental companies list their services on the platforms for a fee. In return, Expedia and other platforms generate traffic to their websites and sell services that otherwise would not have been sold.

Source Fool.com