Booking Holdings shared updates about its test program with OpenAI during its third-quarter earnings call on Oct. 28.
At its developer conference earlier this month, OpenAI announced the launch of apps within ChatGPT. Expedia and Booking.com are among its first partners, effectively creating a new distribution channel to plan and book travel.
CEO Glenn Fogel conceded that it's still early, but Booking.com is "very happy to be in the first wave of apps with OpenAI."
"I think that says something about us and the value we bring to partners, that they would do it with us to get going," Fogel said.
Booking Holdings CFO Ewout Steenbergen also said that in terms of impact, Booking.com is measuring "faster search, better conversion, lower cancellation rates and high customer satisfaction."
When asked about strategy if more people opted to start travel discovery with artificial intelligence (AI) solutions, Fogel expressed confidence in Booking's position.
"Even though people may change over time how they want to start their travel inspiration discovery, I believe that we will always be there in the area to provide what is really necessary, which is going beyond that and executing and doing the actual transaction fulfillment, working to make sure they're getting the best value, the area of making sure you're doing the right types of payments, the area making sure you're following all the regulations -- very complex," Fogel said.
Steenbergen also addressed the potential economic impact of a shift, noting that travel clicks from traditional search continue to increase year over year and the portion of leads from large language models (LLMs) is small but growing.
"Probably, over time, these two worlds might become more hybrid because we are seeing, of course, more AI being built into browsers at this point in time," he said.
Analysts also asked about hotels looking to bypass OTAs and how Booking would address such a disruption.
Fogel said this isn't necessarily a new problem, as some people already book directly with hotels.
"That will probably happen in an LLM world too," he said. "But this idea that this is going to cause a giant shift, I just think that that's not the way the world's going to work -- and the proof is that it hasn't happened in the whole day of Google."
According to Fogel, the company's approach is to continue to provide value and build trust to encourage customers to book on Booking's sites.
Booking's Q2 results
Steenbergen highlighted specific growth in U.S. bookings, which "accelerated to high single digits, supported primarily by stronger outbound travel and momentum in our B2B business."
Europe was another region with high single-digit growth, while Asia and the rest of the world each delivered low double-digit growth.
"Our globally diversified portfolio proved its value once again as we continue to see robust growth in certain travel corridors, including Canada to Mexico and Europe to Asia, which effectively offset softer demand in certain inbound corridors to the U.S.," Steenbergen said during his opening remarks.
Additionally, Booking Holdings saw growth in its direct channel in the U.S. and normalization of the booking window in the U.S. However, Steenbergen also noted "slightly lowers ADRs and a shorter length of stay versus the prior year" -- an indication of continued moderation of discretionary spending.
Executives highlighted growth in Asia, which was fueled by Agoda and Booking.com. Steenbergen said Asia is the most important market in the long and medium term.
"That is where we will see over the next few decades the largest growth in the world because the GDP growth is going to be the highest there. There will be very large parts of the population that will start to travel and travel more."
Booking Holdings, which owns Priceline, Booking.com, Kayak, Agoda and OpenTable, reported 8% year-over-year growth in room nights, which reached $323 million. Gross bookings grew 14% to $49.7 billion, while revenue increased 13% to $9 billion.
Net income was up 9%, reaching $2.7 billion.
Overall, the company acknowledged lingering "uncertainty in the macroeconomic and geopolitical backdrop" but also said that it is seeing "continued momentum with steady travel demand trends" in the fourth quarter.
Source: PhocusWire