What could it mean for travel?

In a move that could reshape the global travel and technology industries, Uber is rumoured to be exploring a potential acquisition of Expedia Group, with a portfolio that includes Expedia.com, Hotels.com, Wotif, Vrbo, and Orbitz.

Although no official confirmation has been made, a Financial Times report indicated that Uber has been working with advisors to evaluate the feasibility of this mega deal, which could transform both companies’ futures and their roles in the travel industry.

What would this deal signify for Uber, Expedia, the broader travel industry, and travellers across the globe? And more intriguingly, how could Uber CEO Dara Khosrowshahi’s past role as Expedia’s former CEO influence its outcome?​

How Uber and Expedia fit together

At first glance, Uber and Expedia may appear to have different business models. Uber is best known for its ride-hailing services and its Uber Eats food delivery platform. At the same time, Expedia’s 22-year legacy and strength lie in the online travel booking sector, managing everything from hotel reservations to flights and holiday rentals.

Expedia’s popular Travel Agent Affiliate Program (TAAP) reportedly has over 70,000 travel advisors enrolled in Australia and globally. It’s become a significant part of Expedia’s outreach to the travel advisor community, enabling them to leverage Expedia’s extensive network and booking tools.​

But there’s more overlap than meets the eye. Both companies operate at the intersection of mobility and travel. If Uber acquires Expedia, consumers could potentially book flights, arrange hotel stays, and schedule rides to the airport, all within a single Uber app.

CEO, Dara Khosrowshahi: The key to the deal?

Uber CEO, Dara Khosrowshahi.

One of the most fascinating aspects of this potential acquisition is the history between Uber and Expedia. Uber’s current CEO, Dara Khosrowshahi, was the CEO of Expedia for over a decade, from 2005 to 2017. During his tenure, Expedia expanded its portfolio significantly, cementing itself as a leader in the online travel space.

Khosrowshahi’s intimate knowledge of Expedia’s operations, culture, and leadership could be the key to making the deal work. His insights into Expedia’s business model, combined with his experience leading Uber through rapid expansion and diversification, give him a unique advantage. Plus, to date, he still remains an Expedia non-executive board director.

What could this mean for travellers?

If Uber does acquire Expedia, travellers will feel the most immediate impact. With Uber already dominating urban mobility, integrating Expedia’s travel services would mean more streamlined travel experiences. This convenience could make planning trips much more manageable, particularly for business travellers and frequent fliers.

The acquisition could also bring personalisation to the forefront. Both Uber and Expedia have access to vast amounts of user data, which could be leveraged along with AI to provide tailored recommendations and services.

For example, Uber could use travel history data from Expedia to suggest personalised experiences for users, such as recommending restaurants or activities at a traveller’s destination based on their preferences.

As of 2023, Uber reported having around 3.8 million active riders in Australia alone. The company operates in most major cities across the country, making it the key player in the Australian ride-hailing market.

Meanwhile, Expedia Group’s platforms attract over 100 million unique visitors per month globally across its various brands, including Expedia.com, Hotels.com, Vrbo, Wotif, and Orbitz, making Expedia Group one of the largest online travel agencies in the world.

How has the news been received?

Industry reactions have been mixed. Some have expressed enthusiasm for the synergies between the two companies, while others point out the challenges involved in merging two massive platforms.

Sarah Hunter, a travel analyst with Teneo Consulting in the U.S., noted that the deal could bring significant opportunities but also warned, “If this deal happens, it will definitely shake things up in the travel sector. There are huge opportunities here, especially in the post-pandemic landscape where seamless, integrated travel solutions will be key.”

However, Mark Okerstrom, who succeeded Khosrowshahi as Expedia CEO in 2017, offered a more cautious perspective: “Integrating two platforms of this scale will require a massive commitment of resources and careful navigation of regulatory hurdles. It’s not just a matter of adding travel bookings to Uber; it’s about merging two complex ecosystems.”

What’s the strategic value for Uber?

This potential acquisition could help Uber diversify its revenue streams at a time when the company is under increasing pressure to show profits. The pandemic naturally hit both Uber and Expedia hard. Still, with travel demand continuing to rebound and reset, this merger could be an opportunity for both companies to capitalise on the long term.

While Uber’s core ride-hailing business remains a lower-margin industry, expanding into the lucrative travel industry could provide Uber with a new avenue for growth. Colin Sebastian, senior analyst at Baird, suggested that “the acquisition of Expedia would provide much-needed diversification for Uber and help reduce its reliance on ride-hailing, especially as travel picks back up post-pandemic.”

Many challenges ahead

However, the deal would not come without its challenges. Integrating Uber’s relatively straightforward services with Expedia’s vast and complex platform would be no small feat. Uber would need to navigate a minefield of potential regulatory issues, especially given the scale of such a merger in the international travel and tech sectors.

Moreover, travel tech competitors like Booking Holdings and Airbnb would likely respond with innovations of their own, potentially intensifying competition. Smaller travel tech companies may also struggle to compete against a combined Uber-Expedia giant, which could lead to a more consolidated online travel industry landscape.

What’s Next?

As the rumours of Uber’s potential acquisition of Expedia continue to swirl, the industry waits with bated breath. If the deal were to go through, it could represent a transformative moment for both companies—and the travel industry as a whole.

For now, however, the acquisition remains speculative, though the connection between Dara Khosrowshahi and his former company makes this deal feel more possible than most.

Either way, it’s a development worth watching closely.

Hot on the heels of the speculation, Expedia’s share price was up more than 11 per cent in after-hours U.S. trading yesterday after the Financial Times published its report.

The Expedia Group has declined to comment on the rumours to date.

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