Study Finds AI’s Real Threat to OTAs Lies in Profit Margins, Not Customer Loss

Consumer Adoption of AI in Travel

Recent research from BTIG, an investment bank, highlights the growing use of artificial intelligence by U.S. leisure travelers for trip inspiration, planning, and booking. The June 26 study found that over 60% of travelers have experimented with AI tools. Specifically, 76% are very or somewhat willing to use AI for travel inspiration, 80% for research, and 65% for itinerary building.

These findings align with a February survey by Phocuswright, which reported that 56% of U.S. travelers had used AI for some aspect of travel in the past year. This reflects a steady increase from 33% in the first half of 2025 to 43% in the second half of 2025. BTIG’s survey of 250 travelers also found that 38% would use AI to book flights and 42% to reserve hotel rooms.

Current Limitations of AI Tools

Despite consumer interest, the study notes that current AI trip planning tools are limited in their capabilities. BTIG describes the tools as “rudimentary,” citing a lack of personalization, minimal pricing information, and an absence of direct booking functions. Partnerships between OTAs and AI platforms have not significantly advanced these features compared to a similar study conducted in 2023.

BTIG’s analysis of AI offerings from major OTAs like Booking.com and Trip.com, as well as platforms such as Google Gemini, OpenAI’s ChatGPT, and Anthropic’s Claude, found that most tools are effective at providing destination information and creating itineraries. However, they lack real personalization and booking functionality. Travel startups tend to focus on inspiration and itinerary building, but are also limited in pricing and availability information.

Impact on OTA Business Models

The report argues that the main risk AI poses to OTAs is not disintermediation—where customers bypass OTAs entirely—but rather a potential squeeze on profit margins. BTIG suggests that AI is more likely to evolve as a customer acquisition channel, with OTAs serving as preferred partners due to their extensive behavioral data, property listings, and marketing budgets.

In 2025, the largest OTAs—Airbnb, Booking Holdings, Expedia Group, and Trip.com Group—spent over $20 billion on sales and marketing, up from $17.8 billion in 2024. This significant investment underscores the importance of customer acquisition and retention in the sector.

AI Platforms and OTA Traffic

Currently, AI platforms account for only about 0.4% of OTA traffic. The report questions whether this could grow enough to impact the roughly 40% of OTA traffic that comes from traditional paid search. BTIG concludes that price comparison sites may be more at risk from AI than OTAs themselves.

Industry Outlook

The debate over AI’s impact on the travel industry is ongoing, with differing opinions on which players stand to gain or lose. The BTIG study suggests that OTAs are likely to remain central to the travel booking process, especially as AI tools continue to develop. Partnerships between OTAs and AI platforms are seen as the most viable way to bridge the gap between consumer intent and available technology.

Overall, the study finds that the threat of AI disintermediating OTAs has been overstated, with the more immediate concern being the effect of AI on profit margins as consumer adoption of these tools grows.

Discover more at PhocusWire.