Duff on Hospitality Law

Good Sunday morning from Seattle . . . Our weekly Online Travel Update for the week ending Friday, November 7, 2025, is below. Expedia’s quarterly earnings report garnered most of the attention this week as Expedia reported relatively strong third quarter results. We’ll include a transcript from this week’s earning release call in next week’s Update. Enjoy.

• • Expedia Posts Better Than Expected Quarterly Earnings. Expedia’s third quarter earnings reflected continued strength in its B2B business and a stabilizing B2C business. Here are a few of the key numbers:
    • Company-wide revenue grew 9% YOY to $4.4 billion (B2B revenue grew 18% YOY)
    • Advertising revenue grew 16% YOY
    • Company-wide gross bookings grew 12% YOY (B2B bookings grew 26% and B2C bookings grew by 7%)
    • Booked room nights grew by 11% (outpacing competitors Airbnb and Booking.com for the quarter)

When asked during the earnings call about Expedia’s current AI efforts, CEO Ariane Goren noted that the Company had two primary priorities – ensuring that its brands and content appeared in responses to users’ prompts on the major AI platforms and directing traffic from those platforms back to Expedia. Goren’s comments regarding the leads received by Expedia from popular AI platforms mirrored those of Booking Holdings’ Glenn Fogel just a week earlier - few leads today but growing and good quality.

• • AI, AI Agents and Corporate Travel. For the past few months now, the industry (us too) has focused almost exclusively on AI and AI agents and their effect on leisure travel. What about managed and corporate travel? What complexities do travel policy compliance, expense management and duty of care obligations introduce? According to recent comments from some of the largest corporate travel players, these added complications will make it impossible to replace TMCs and expense platforms entirely. Sounds like self-preservation talk to me. From my perspective, as AI tools are perfected in leisure travel, their extension into corporate and managed travel (and their complex data sets, which seem like natural fits for AI) seems inevitable. Anyone agree?
  • What Lessons Can Be Learned from Airlines and ChatGPT? According to recent research conducted by PROS, an airline retailing and revenue management company, referrals from leading AI platforms to airline websites is growing quickly. In September of this year, ChatGPT accounted for 2.3% of all referral traffic from search engines to airline websites (this number is up from 1.8% in August). While the importance of AI platforms may be increasingly generally, airlines may have a hard time benefitting from the increased usage. According to PROS, a wide margin of the traffic generated through ChatGPT today goes to OTAs and metasearch sites and not airlines themselves. Note that these results are quite different than the results of the AI behavioral study by Propellic that we featured in an earlier post, but they may be indicative of where hotel search is going in the future.

Have a great week everyone. 

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.