How Does Expedia Make Money?

By Corbin HartwickUpdated on March 14, 2022

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You’ve learned about the basics of Expedia, but you may still have some questions about how it generates revenue. In this article, we’ll explain how makes money, so you know what you’re dealing with when you decide to book with Expedia.

So, how does Expedia earn its profits?

Expedia’s revenue model

Expedia makes the majority of its money through booking accommodations in bulk at a cheap price, and then selling them to their users with a slight markup. Expedia makes a profit off of the increased margin, and also occasionally makes commission fees from hotels increasing their exposure through the Expedia website.

This is the same model used by many travel websites, as they often have the connections necessary to rent out entire blocks of hotel rooms and resort units due to their online marketing and returning user-ship. It also makes money through its many partner websites, which sell reservations in a similar way. It generates some revenue by charging fees for certain circumstances as well, though they avoid doing this in most cases, and so this does not make up a large portion of their revenue.

The Expedia website itself costs no money to use, and neither does signing up for an account. Merely searching for vacation accommodations on the website or app never costs money; you simply need to pay for the total of your accommodations when you confirm your booking.

What kinds of fees does Expedia charge?

Expedia itself doesn’t charge fees for booking accommodations, unless you violate their terms of booking. For example, you may be charged cancellation fees if you cancel your accommodations outside of the standard 24-hour window. Also, because Expedia is partnered with so many other travel accommodations companies, any of these services could potentially charge fees that you may not have been aware of when booking with Expedia.

Some examples of additional fees that users sometimes incur when booking accommodations include:

  • Cancellation fees for cancelling an accommodation booking more than 24 hours after booking it
  • Fees for extra or overweight baggage, on certain airlines
  • Fees for using guest Wi-Fi in a hotel room
  • Fees for excursions off of a resort
  • Parking fees for parking at a particular venue
  • Fees for meals at a hotel (such as breakfast)
  • Fees for the ability to use facilities at a hotel such as a spa, gym, pool, etc.

To avoid these sometimes hidden fees, be sure to read all of the terms of your accommodations booking on Expedia carefully before completing your transaction. For a complete description of situations in which you may incur fees, read Expedia’s Terms of Use.