Duff on Hospitality Law

Good Sunday morning from Seattle . . . Our weekly Online Travel Update for the week ending Friday, October 31, 2025, is below. Booking Holdings garnered most of the attention this past week as it reported its third quarter earnings and updated investors on its ongoing artificial intelligence efforts. A copy of the earnings release call transcript is linked below. Enjoy.

• • Updates on Booking.com’s Payments Business. With so much attention being paid these days to Booking.com’s AI announcements, we’ve all lost track of Booking.com’s ongoing efforts to stand up a successful payments’ platform. Anyone remember “Facilitated Payments?” Payments remain a critical component of Booking.com’s overall connected trip strategy and is likely one area (at least according to Booking.com) where AI platforms won’t be racing to displace existing players or structures.
  • Is Organic Search Dead? According to Kayak’s CEO, Steve Hafner, organic search is at least dying. In a recent Skift interview, Haftner shared that large language models (LLMs), including Google’s AI Overviews, are to blame for rising customer acquisition costs. With Google’s placement of entirely self-contained AI driven responses at the top of users’ search results, organic search is becoming less relevant and forcing advertisers like Kayak to invest more in paid search. According to Haftner, anyone who has previously relied on organic links is likely to suffer the same consequences. The result? At least for Kayak, the changes resulted in a recent $457 million accounting write down on its brand. With these important changes in search being brought about by AI (and in particular, Google’s AI Overviews and AI Mode), one must ask how relevant are Google’s newly proposed search boxes (see story below) other than to satisfy EU regulators?
  • Booking Holdings Updates Investors on AI Efforts (and Reports Quarterly Earnings). Booking Holdings released its third quarter earnings report this past week and while Booking reported a relatively strong third quarter (including some first time comments on its growing B2B business), most of the industry’s attention was focused on CEO Glenn Fogel’s comments on AI. A few takeaways . . .
    
    • It remains far too early to say with any certainty that AI is the travel industry disrupter that everyone claims it is. Yes, Booking.com is enjoying great PR (“first wave”) with regard to its new ChatGPT app, but what that app actually means for new customer acquisitions or direct channel growth remains unknown.
    • Bookings generated through AI enabled platforms reflect higher user engagement – better conversion, fewer cancellations and high customer satisfaction. All good things.
    • Booking believes that irrespective of where travelers may actually begin their search, platforms like Booking.com will continue to serve a critical (irreplaceable?) role in fulfilling and servicing the bookings (and the many complex relationships that are required to create and pay for those bookings) that ultimately result from those searches.
    • My two cents . . . Despite Glenn Fogel’s seemingly dismissal of the threat posed by AI platforms, I believe Booking.com is as afraid of AI and its possible disintermediation of travel intermediaries like Booking.com as it is excited about the potential opportunities presented by AI. I also believe that the outcome here will depend more on the aspirations (and existing or future business models) of the AI platforms versus anything that Booking or other intermediaries might ever do. Walking away from billions of dollars of ad revenue (or possible revenue) generated through the intermediaries will be difficult for any platform player. Google never made that kind of leap with traditional search. Will Google (or other newcomer AI platforms) behave differently with AI?
  • TripAdvisor to Soon Launch Its Own ChatGPT App. How relevant will this app actually be? See discussion above.

Have a great week everyone.