Artificial intelligence is rapidly transforming how travelers search, plan, and book trips—disrupting traditional online travel agencies (OTAs) like Booking Holdings, Expedia, and Airbnb. According to Bernstein Research, this evolution could raise global online travel penetration to 80%, up from the current 66%, but may also compress profit margins as AI-driven platforms reshape user behavior.
AI integration is no longer a futuristic concept. ChatGPT now hosts booking tools from Booking.com, Expedia, and Tripadvisor, while Airbnb aims to introduce natural language search features by 2026. This shift enables travelers to plan entire trips conversationally—without navigating multiple tabs or price comparison sites.
Bernstein analysts identify three possible outcomes for the sector, each offering both opportunity and risk.
Three Scenarios for AI’s Impact
1. AI-Enhanced Travel Platforms
Traditional OTAs could embed AI-powered search and personalization into their ecosystems, improving booking efficiency and user experience. However, greater automation may erode paid placement revenue, which currently makes up 10% of OTA sales and 25% of EBITDA.
2. AI Platforms as Gatekeepers
AI tools like ChatGPT and Google Gemini could become the primary gateways for travel searches, routing traffic to preferred partners under exclusive deals. While this could lift OTA market share, it risks reducing take rates as AI limits upselling opportunities. For example, Expedia’s stock jumped 7% when named a ChatGPT partner but later fell 10% after investors assessed the longer-term impact on margins.
3. AI as Aggregator (Most Likely)
Bernstein sees a blended model emerging—where AI aggregates real-time prices and availability from OTAs, hotel chains, and global booking systems.
- Online penetration could reach 80%
- Transparency would pressure commissions
- Price discovery would become instantaneous
While this could mask some market-share losses, it may also lower margins across the industry.
Profits Rise, Margins Tighten
Bernstein estimates that a 1% improvement in conversion rates could boost OTA EBITDA by 30%, while losing paid placement income could reduce EBITDA by 20%. Expanding online penetration alone could add 20% to sector revenue.
Among major players, Booking Holdings ($5,419.87) remains the most exposed due to its reliance on sponsored listings. Airbnb ($120.35) is developing in-house AI systems, while Expedia ($223.83) stands to benefit from its B2B partnerships as booking models evolve.
Bernstein concludes that OTAs will survive AI disruption, but the market’s new equilibrium will take time to form. The firm notes that “today’s slow-growth outlook is clearly outdated—but the direction of change depends entirely on how AI platforms evolve.”
