Why Booking Holdings Is a Better Investment Than Expedia

Booking Holdings (NASDAQ: BKNG) and Expedia (NASDAQ: EXPE) are both online platforms that facilitate the process of making travel arrangements such as buying airline tickets and making hotel reservations. However, the two companies are quite different and their financial results show it.

The key difference between Booking Holdings and Expedia is the markets they serve. Expedia derives a majority of its business from the United States while Booking Holdings primarily operates in Europe. At first blush, this might seem like a minor detail, but it is crucial to understanding the financial performances of the two companies.

Although online travel booking websites help users book a wide variety of accommodations including flights, rental cars, and local excursions, commissions on hotel rooms provide them with the vast majority of their profits due to higher commission rates. Websites like Expedia.com can collect as much as a 20% commission on the price of a hotel accommodation.

Source Fool.com