Expedia’s One Key loyalty program is a strategic initiative to drive future growth. A strong liquidity position and commitment to reward shareholders would further enable the travel giant to capitalize on market opportunities while improving the company’s prospects as an investment.
Expedia Group, Inc. is a global online travel technology leader that offers nearly everything in one platform when it comes to booking, travel accommodations, and experiences. Headquartered in Seattle, Washington, the company operates under various brands such as Expedia.com, Hotels.com, Vrbo, Orbitz, and Travelocity.
A traveler walking along a white-sand beach, a luxury resort in the background.
What really sets Expedia apart in its industry is the broad portfolio of services related to travel and its capacity to aggregate options from multiple suppliers, which consequently allows travelers to plan and book an entire trip under one roof.
It offers a wide range of products and services, such as hotel book-and-buy, air tickets, car rentals, vacation packages, cruises, and destination services. Most of Expedia’s revenue comes from commissions paid by suppliers on bookings related to travel on its platforms. It has other revenue sources, though not as significant, such as advertising services to businesses and travel management solutions.
Expedia caters to various customer segments, including leisure or business travel clients as well as corporate customers with needs for travel management. The end market consists of customers who require affordable yet accessible travel options. It seeks to cater to both domestic and international customers. Through its powerful brand and easy-to-use technology, Expedia Group serves a broad customer base in the global travel market.
Expedia stock is up over 60% from its 52-week lows. That is a sign of increasing investor confidence in the business. The key to this renewed confidence? The unification of loyalty programs under its One Key platform, aligning its bookings growth with that of competitors like Booking Holdings. One Key is a game-changer in the travel space, as it is the only rewards program offering a cash-back option, which is something Priceline and Booking.com do not offer. And it just so happens, that when prices are roughly similar, many travelers view the Expedia offers as the most cost-effective.
There is, however, more to Expedia’s new strategy: They have partnered with Wells Fargo and Mastercard to roll out a co-branded One Key credit card with fee-based and no-fee versions, in addition to sign-up rewards valued up to $600 in One Key Cash. It’s all about nudging more spending across Expedia’s family of brands, and that is paying off. Stronger booking trends in the U.S. and U.K. are proof that the One Key roll-out is a success, and with these new incentives, Expedia is putting itself up for even bigger wins.
We are bullish on Expedia because of the success of its One Key program, thus allowing the company to capture real value in cash-back rewards. Furthermore, the giant’s recent partnerships and launch of credit cards are just fueling more bookings. Overall, a unique loyalty offering that is different from the competition sets up Expedia well for long-term growth and continues to gain market share in the travel game.
Expedia does not rank on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held EXPE at the end of the second quarter which was 56 in the previous quarter. While we acknowledge the potential of EXPE as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as EXPE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.