Waterworld Capital
Public Markets Commentary
Booking Holdings is a good long in travel at 15x earnings, where it has historically bottomed. That answers @PegasusFund's bearish case of an EU summer travel nightmare and LLMs attacking online travel agents; there are much better shorts in travel, such as airlines with their large margin risk. x.com 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
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 threaten Booking Holdings' margins. That view could change if the company adapts, pivots and proves otherwise. 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
Airbnb is off-limits because AI agents could disrupt bookings. That view could change if the company adapts, pivots and proves it wrong. 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
Airbnb is losing ground to hotels and other aggregators that compete without hidden fees. Over five years, Marriott returned 173% and Hilton 163% versus 18% for Airbnb, per @Fiscal_ai. x.comÂ
Airbnb is heading toward becoming an AI-native travel platform with inventory nobody else has. Q2 gross booking value rose 16% year over year, with $27.2 billion of bookings, as experiences and services attach to the core and hotels gain traction. As shoppers move to AI-native search, Airbnb's largely non-commodity inventory positions it well, and adding commoditized hotels and car rentals lets it connect trips end to end. 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
Uber's move into hotels looks smart because aggregating more demand through adjacent, complementary categories makes it more valuable to potential competitors like Waymo. Many travelers end up booking a hotel last minute on their phone, exactly the moment an Uber app with hotels could serve. @CatNyanpital counters that Uber is built for time-sensitive needs, which may not fit hotel booking. x.com x.comÂ