Skift Take
Hotels and the big online travel agencies will have to adapt to the sharing economy. Booking.com is already doing so in the form of nearly 300,000 vacation rentals and Expedia is taking its sweet time and will make a move when it has to.
The sharing economy will put a bigger hurt on Booking.com than Expedia.
That's the questionable view espoused by Deutsche Bank analyst Lloyd Walmsley, who several days ago downgraded Booking.com's parent, the Priceline Group, to "hold" from "buy," and upgraded Expedia Inc.'s stock to "buy" from "hold," according to published reports.
There were numerous reasons for the disparate ratings, including the concern that the Priceline Group may have topped out on its upside and that Expedia Inc. would make strides in its hotel business because of better monetization and its acquisitions spree.
But the opinion that the Priceline Group and its Booking.com unit would feel the wrath of Airbnb and its peers to a greater extent than Expedia doesn't make sense -- especially over the long term.
"We believe investors are underappreciating the risk that Airbnb eventually adds more professional hotel supply to its product offering," said Walmsley, according to Investors.com. "Could Airbnb disrupt (Priceline's) Booking.com with lower take-rates on long-tail inventory in ways similar to how Booking.com disrupted Expedia?
"With this new risk in mind, we put the vacation rental space — which we have followed closely through coverage of HomeAway — back under the microscope with a broader perspective on ho
