Interview: Expedia CEO Envisions Direct Competition With Airbnb Over Next Few Years
Expedia Inc. CEO Dara Khosrowshahi thinks the competition with Airbnb has been a sideshow but will be increasingly direct in coming years as Expedia and HomeAway build up apartment and home inventory in cities.
Context & Ripple Effects
In this 2015 interview, Expedia CEO Dara Khosrowshahi frames the Airbnb fight as a sideshow about to get serious: Expedia's plan runs through HomeAway, building apartment and home inventory inside cities rather than ceding urban short-term rentals to Airbnb. The prediction set up the next half-decade of moves covered here — by 2017 Expedia and Priceline were both ramping home-rental inventory to challenge Airbnb, with Booking.com lifting vacation-rental supply 50% year over year.
What followed complicates the thesis: Expedia bought Pillow and ApartmentJet in 2018 to accelerate exactly the urban push Khosrowshahi described, only to shut that business down in 2020. Meanwhile Airbnb answered in the other direction, with Brian Chesky pitching an experience-economy platform well beyond home rentals — so the direct competition arrived, but bidirectionally and messier than the 2015 framing implied.
First-order effects
- HomeAway's city-apartment buildout puts its supply directly against Airbnb's densest urban markets, ending the geographic separation that had made the rivalry a sideshow.
- Airbnb now faces OTA-scale distribution attacking its core listing base while it simultaneously expands outward, stretching it on two fronts at once.
Second-order effects
- Priceline's Booking.com answers with its own 50% surge in vacation-rental inventory, turning short-term rental supply into a three-way land grab among Expedia, Booking.com, and Airbnb.
- Airbnb counters by widening its own footprint past lodging — Chesky's experience-economy ambitions aim to compete with OTAs' broader travel bundles rather than defend listings alone.
Third-order effects
- Expedia's acquisition-then-shutdown of Pillow and ApartmentJet is the cautionary data point: bought inventory alone hasn't been enough to dislodge a native marketplace, suggesting the structural edge sits with community and brand rather than raw unit count.
- If both sides keep crossing into each other's categories, online travel consolidates around a few full-stack platforms where lodging, experiences, and services blur — the endgame Khosrowshahi's 'direct competition' framing pointed toward.
The trend: Online travel is converging as OTAs buy their way into short-term rentals and Airbnb expands beyond them, with each player discovering the other's home market is harder to win than predicted.