Dan
Small-Fund Manager
As consumer AI agents become the new battleground, booking aggregators Booking and Expedia look like clear losers, facing margin compression and more comparison shopping. Ad platforms such as Meta should thrive on entertainment-first ad consumption, while businesses that depend on humans using their own interfaces face pressure. OpenAI and Anthropic are expected to launch consumer agents to compete with Muse and Grok Bot in the coming weeks. x.comÂ
Personal AI agents such as Muse and Grokbot look set to make Expedia the next big loser as consumer and business engagement moves to new channels. Intermediary stocks such as EverQuote sold off and Expedia came under some pressure earlier in the day, but the next level appears to be Expedia, some insurance brokers and then phone communication systems such as RingCentral and Five9, which seem at the top of the losers. x.comÂ
Booking Holdings' valuation is quite clearly attractive, though AI agents may roam around and book hotels directly for people. Google I/O raised concerns about most internet names, leaving it unclear whether agentic AI will really hurt Booking. x.com x.comÂ
Booking Holdings faces a big risk from Meta's Muse and other AI agents that will find bookings without a middleman. x.comÂ
AI agents threaten Booking Holdings' margins. That view could change if the company adapts, pivots and proves otherwise. x.comÂ
AI price-comparison risk to Booking Holdings is a big nothing burger, since Google and Google Maps have offered comparisons for ages. Personal checks find Google showing no better price than Booking about two-thirds of the time, and saving a few euros is not worth another spam account or the lost time. Having all bookings in one app is also far more convenient than digging through a messy Gmail inbox. x.com x.comÂ
Meta's Muse is gaining a potential toll booth on online checkout, which squeezes Booking and Airbnb. Within 48 hours Shopify, PayPal and Expedia joined Muse checkout, since each merchant has reason to join early if agents steer demand. For Booking and Airbnb, joining could mean paying fees on bookings that would have come direct anyway, about 90% of Airbnb's traffic as of Q3 2023; staying out bets booking habits won't move to Muse. No deal has disclosed economics, the number to watch. x.comÂ
Booking Holdings faces a valid long-term bear case as AI agents could take a share of the 13-18% online travel take rate. Testing Meta's Muse and Instinct for a hotel search showed them drawing on Booking and Expedia inventory for now, but agents could eventually build direct ties with long-tail hotels, better reviews and pre- and post-booking service at lower fees. OTAs' own agents look mediocre and lack users' context. At 13x 2027 EPS it tempts as a contrarian long, but looks too tough. x.com … Show more
Booking Holdings looks ridiculously cheap against its own history, and its business and moat inspire much more confidence than Uber's even with AI risk. Its P/FCF is 11.94, versus a ten-year median of 18.85. x.comÂ
AI agents such as Muse, Dot and Instinct are a huge opportunity for Meta, Alphabet and the AI labs, because the more capable they become, the more tasks they take off people's hands. Dot uploaded expenses and generated customer invoices on a portal it had never seen, with no guidance; agents could also handle recurring shopping, trip booking, insurance paperwork, subscription cancellations and refunds. The entire AI infrastructure chain benefits too. x.comÂ