COVID-19 hit several sectors, such as specialty retail and automobiles, fairly hard. However, none has been as adversely affected by the pandemic as the tourism sector. Travel restrictions and lockdowns led to a plunge in international travel demand and put over 100 million tourism jobs at risk. Fortunately, 2023 looks much brighter for the tourism sector as international tourist arrivals are projected to reach 80% to 95% of pre-pandemic levels this year. The airline industry is the first beneficiary that comes to mind, with the NYSE Arca Airline Index (NYSE: XAL) returning 14.6% year-to-date as of end February. In addition, the MSCI World Hotels, Restaurants and Leisure Index also rose by 10.2%, showing a nascent recovery for the hospitality industry. Air transportation and hospitality, in turn, fuel the growth of online travel agents (OTA). We examine how two heavyweights, namely Booking Holdings Inc. (NASDAQ: BKNG) and Expedia Group Inc. (NASDAQ: EXPE), stack up against each other.

Highly similar business models

Both companies have largely similar business models classified under travel and advertising....