Duff on Hospitality Law

Good Saturday afternoon from Seattle . . .  Our Online Travel Update for the week ending February 21, 2025, is below. If any of our readers still question the profound (dare I say, disruptive) effect that AI will have on online travel (and in particular, distribution), I encourage you to take the time to listen to (or read) the many comments Booking Holdings CEO, Glenn Fogel, in the latest Booking Holdings’ earnings call. A transcript of the call is attached. What should we make of Glenn’s comments? Do they reflect the unbridled optimism of a CEO who is confident in his company’s position to once again leverage the latest and greatest technology (like the many technological developments that preceded AI) to maintain his company’s position in online travel? Or, perhaps the comments were offered in anticipation and defense of the participants’ inevitable questions (and maybe doubts) about the role of online intermediaries in a post AI world? The stories below in this week’s Update seem divided on the issue.    

A few key takeaways from Glenn’s comments . . .

“Adapting to and leveraging new technologies has been in our DNA from the start, and Generative AI is pushing the pace of technology innovation faster than ever.”

“We see the development and use of AI agents [e.g., Operator] and those agents working with other AI agents as a potential way, to more quickly bring together the different elements of travel into a truly connected offering on our platform.”

“We are also excited to be working with leading Generative AI organizations on their Agentic developments. These collaborations reflect our commitment to staying at the forefront of this rapidly developing field and are consistent with our long-standing approach to work with different sources of new customer traffic.”

“ . . . as I mentioned, and we've talked about this in the past, that we're working with all of the major players in the Valley and elsewhere, that we are working together to do things that would be better as togetherness instead of trying to do separately.”

“And I'm just pleased to be in the position we are with all the data we have, with the resource we have, with the people we have, the worldwide network of consumers who trust us, which is also a very big deal.”

I hope you enjoy this week’s Update. 

• • Booking Holdings Reports Strong Fourth Quarter Results.  Glenn and his team had a lot to be positive about beyond Booking Holdings’ AI efforts this past quarter and year.  Some highlights for me were . . .
    • Many key financial metrics were at or above the high-end of previous fourth quarter expectations – room nights, gross bookings growth, revenue growth and adjusted EBITDA.
    • Full year financials reflected similar strong growth – gross bookings (10% YOY growth), revenue (11% YOY growth), adjusted EBITDA (17% YOY growth) and adjusted earnings per share (23% YOY growth).
    • Fifty nine percent (59%) of gross bookings at Booking.com are now “merchant bookings” processed through Booking.com’s payment platform.
    • Additional future layoffs are possible as Booking Holdings continues its previously announced Transformation Program. 
    • Looking forward, Booking Holdings expects a year of “normalized growth” for the travel industry allowing Booking to deliver constant currency gross bookings, revenue and earnings per share growth at targeted (though lower than 2024) levels.
  • Details on TripAdvisor’s Partnership with Perplexity and OpenAI Revealed.  Will AI become intermediaries’ next customer acquisition channel (like Google, metasearch sites and social media are today)?  You bet, at least according to TripAdvisor’s CEO and CFO.  In last week’s TripAdvisor four quarter earnings call, both expressed optimism over the recently announced partnership between TripAdvisor and generative AI platform, Perplexity.  As part of the agreement, Perplexity licenses TripAdvisor data.  According to TripAdvisor CEO, Matt Goldberg, users who come to TripAdvisor via Perplexity are both “incremental” and “high intent.”  Also discussed during the earnings call was TripAdvisor’s recent partnership with OpenAI’s agentic product, Operator, which according to Goldberg allows TripAdvisor “to be best-positioned favorably as agentic AI emerges.”  According to Goldberg, TripAdvisor expects to make more AI announcements in the near future.

Have a great week everyone.