AI Upends the Online Travel Search Business; Gatekeepers are Moving Closer to the Transaction

By HNR News Staff Reporter

Artificial intelligence is reshaping how travelers discover and book trips, posing a threat to the search-driven business model that has fueled growth at online travel agencies such as Expedia and Booking.com. Google’s AI Overviews and conversational assistants from OpenAI and Microsoft promise answers in the results page, potentially reducing clicks to aggregators. OTAs are racing to build their own AI planners and assistants while relying on traffic from platforms that are becoming more direct competitors. Early product launches and executive commentary suggest that the shift is structural, although its commercial impact will take time to unfold.

AI changes how travelers find options

For two decades, online travel agencies (OTAs) have captured demand by ranking highly in search engine results for terms such as “hotels in Paris” and “cheap flights to Miami.” Generative AI threatens to compress that funnel. Google’s AI Overviews can summarize the “best neighborhoods to stay in,” surface hotel categories and link out to sources without the traditional list of blue links. Microsoft and OpenAI are pushing similar conversational planning experiences that let users ask follow-up questions, refine itineraries and extract key details inside the assistant.

Google framed the shift clearly when it introduced its Search Generative Experience in 2023: “We’re taking more of the work out of searching, so you’ll be able to understand a topic faster, get to the heart of what you’re looking for and discover new insights and viewpoints,” wrote Liz Reid, Google’s vice president of Search, in a company blog post. At Microsoft’s debut of the AI-powered Bing that same year, CEO Satya Nadella underscored the change in user behavior to come: “It’s a new day in search.”

Why that’s a problem for OTAs

The backbone of the OTA model is paid and organic traffic from large platforms—especially Google—converted into bookings with a take rate. If AI answers more questions natively and keeps users engaged in the results page or inside a chat interface, fewer people may click through to aggregators to compare inventory. And when users do click, they may be steered into the platforms’ own travel verticals.

Booking Holdings CEO Glenn Fogel has long acknowledged the tension. “Google remains an important partner and a competitor,” he has said on earnings calls, a line that takes on new urgency as Google integrates AI deeper into Flights and Hotels and experiments with more conversational planning.

Gatekeepers are moving closer to the transaction

Google has steadily expanded Google Flights and Hotels, and AI Overviews can now stitch together suggestions that historically sent consumers to OTAs for discovery. Microsoft’s Copilot can draft day-by-day itineraries and refine them with prompts like “make it more kid-friendly,” while maintaining context—work that previously occurred on specialist travel sites. OpenAI’s ChatGPT can generate hotel shortlists with reasoning and include map links within the chat.

The strategic implication is that the gatekeepers are absorbing increasingly “upper-funnel” planning tasks where travel brands used to win consideration. As these assistants add structured data and shopping modules, they edge closer to the point of sale.

OTAs are racing to adapt with their own AI

The incumbents are not standing still. Booking.com introduced an AI Trip Planner in 2023 for U.S. users, enabling conversational searches that translate into bookable stays. Expedia integrated a ChatGPT-powered trip-planning experience into its app. It was among the first travel brands to launch a ChatGPT plugin, moving the trip discovery conversation onto its own platform. Trip.com introduced “TripGen” and later “TripGenie,” while Tripadvisor launched an AI itinerary builder that taps its reviews.

These efforts aim to keep travelers in branded environments and turn open-ended questions—“Where should I stay in Lisbon if I like food markets?”—into recommendations mapped to the company’s inventory. They also allow OTAs to collect first-party data, which may become increasingly important if referral traffic from general-purpose search engines declines.

Hotels and airlines see an opening

Generative AI may also accelerate a longer-running shift toward direct booking. Major hotel chains and airlines have been investing in loyalty programs, apps and customer-service automation. AI assistants layered on top of brand apps can answer policy questions, upsell ancillaries and offer personalized suggestions, making it easier to bypass intermediaries. If conversational interfaces become the default gateway to planning, suppliers with strong brands and data could regain share.

Early signals and unanswered questions

Because AI products are evolving quickly and are still rolling out market by market, it’s too soon to quantify the impact on OTA traffic and conversion. But the direction is clear: platforms are doing more answering and less linking, and consumers are experimenting with chat-first planning. Product launches from both gatekeepers and incumbents—often framed as “early days”—signal a structural shift in how demand is generated.

What remains uncertain is the revenue model around AI answers. If links still drive sufficient qualified clicks, OTAs can adjust their bidding and merchandising strategies. If assistants become robust shopping surfaces with fewer handoffs, aggregators may need deeper partnerships, new distribution agreements or differentiated content and guarantees to remain indispensable.

Regulatory and competitive backdrop

The power of platforms over travel discovery has been a recurring theme in antitrust discussions in the U.S. and Europe. Any design changes required by regulation could alter the frequency at which users see aggregator links versus first-party results, and AI may complicate transparency expectations. Meanwhile, the competitive field is widening: metasearch, supplier apps and social platforms are all layering in AI planning features, intensifying the fight to own the top of the funnel.

The bottom line

As AI turns search into answers and chat, the economics of online travel distribution are in flux. OTAs are building their own assistants and relying on loyalty to defend their share, even as the platforms that send them traffic aim to keep users within their own ecosystems. The winners will be those who translate conversational intent into trusted, bookable choices—before the user ever feels the need to click away.