The OTA is proactively addressing AI disruption by building its own proprietary capabilities while also partnering with leading AI companies
Feb 27, 2025
Booking Holdings is strategically positioning itself for the future by embracing AI, expanding its merchant platform, and capitalizing on the growing alternative lodging market. The company’s leadership is committed to staying ahead of industry trends by integrating advanced technologies, improving operational efficiencies, and investing in new business opportunities. CEO Glenn Fogel and CFO Ewout Steenbergen have set clear goals to drive both short-term profitability and long-term sustainable growth.
Key takeaways
- Dual-pronged AI strategy: Booking is embracing AI through both internal development and partnerships with leading AI companies. The goal is to create personalized, AI-driven travel experiences while maintaining its market position through operational efficiencies, particularly in customer service. The company’s travel expertise, data, and trust are key assets in navigating an AI-driven future;
- Merchant platform expansion: Booking is transitioning from an agency model to a merchant platform, which will account for 59% of total gross bookings by 2024. By controlling payments, the company is able to offer more flexible options and create a seamless booking process. This shift is seen as an opportunity for significant growth, especially as fintech capabilities mature;
- Growth in alternative accommodations: Booking is seeing impressive growth in the vacation rental market, with alternative accommodation bookings increasing 19% in Q4 2024. The company’s ability to offer both traditional and alternative options side-by-side has resonated with consumers, contributing to its success in this segment;
- Strategic transformation for efficiency and growth: The Company is executing a transformation program designed to deliver $400 million to $450 million in annual savings. A portion of these savings will be reinvested in AI, fintech and connected travel initiatives, reflecting a balanced approach to both profitability and long-term growth;
- Looking ahead: Booking Holdings remains confident in its ability to navigate industry changes and plans to further develop its connected trip vision, expand merchant and fintech capabilities, enhance its loyalty program, and leverage AI to improve customer experience and operational efficiency.
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