Expedia benefits from volume-based discounts, which means that the more rooms they book with a particular hotel, the lower the rates they can negotiate. This allows them to offer customers lower prices than if they were booking directly with the hotel.

The price difference between Expedia and Booking.com is often an illusion of "bundling" versus "a la carte" pricing. Expedia belongs to the Expedia Group, which specializes in "Merchant Model" pricing; they often buy blocks of rooms and flights in advance at a discount and then "bundle" them together (Flight + Hotel), allowing them to offer a lower total price that hides the individual cost of the room. This makes Expedia frequently cheaper for travelers booking an entire vacation package. In contrast, Booking.com (owned by Booking Holdings) primarily uses the "Agency Model," where they act as a middleman between the traveler and the hotel. While the "sticker price" on Booking.com might look higher, it often includes taxes and fees that Expedia hides until the final checkout screen. Additionally, Booking.com focuses heavily on its "Genius" loyalty program, which offers deep discounts to frequent users that aren't visible to the general public. Ultimately, Expedia is often the winner for "flight-inclusive" packages, while Booking.com tends to offer better rates and more flexible "pay at property" options for standalone hotel stays.