The Fight for Control of Online Travel Has Started

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Online travel agencies still dominate how people book travel. But that dominance is starting to face pressure from multiple directions at once.

In this episode of the Skift Travel Podcast, Seth Borko is joined by Dennis Schaal to break down a week that touches nearly every corner of the online travel ecosystem. The conversation starts with Booking Holdings’ latest earnings, where the company revealed just how much geopolitical disruption can impact demand, including an estimated loss of millions of room nights tied to the war in Iran.

From there, the discussion moves into a deeper look at competition and strategy. Booking continues to gain share in the U.S. while expanding its connected trip offering across hotels, flights, and alternative accommodations. At the same time, Expedia is navigating leadership changes, and new developments in B2B travel raise questions about whether parts of the industry are starting to look more like infrastructure than consumer brands.

The episode also explores Capital One’s move to bring travel technology in-house by acquiring key assets from Hopper, a shift that could reshape how banks and financial platforms compete in travel distribution. That leads into a broader conversation about whether online travel agencies risk becoming commoditized in a world where AI changes how travelers discover and book trips.

Despite all of this, the data still shows that online travel agencies remain the most widely used booking channel globally. The question is not whether they matter today, but how their role evolves as new technologies, new entrants, and changing consumer behavior begin to reshape the landscape.

Watch This Episode

Your number of the week is 6 million. That’s 6 million room nights, a loose estimate for about how many room nights Book and Holden’s lost due to the war in Iran in the first quarter of 2026.

That is according to their latest earnings call announced earlier this week. Welcome back to The Skift Travel Podcast.

I’m your host, Seth Borko, the head of Skift Research, and today we’re going to be discussing Book and Holden’s earnings, Capital One acquiring Hopper’s travel tech, Expedia’s new CFO, and much, much more.

If you’ve picked up on a theme that is a lot of online travel topics, we are chock full of OTAs today. That’s because my normal co-host Sarah Coppitt is in Bangkok at the Skift Asia Forum. She’s having a wonderful time in Thailand.

1:05

Meet Dennis Schaal

So instead, we are going to be joined by a guest host today, the legendary, the one, the only, Dennis Schaal. Welcome to The Skift Travel Podcast, Dennis. We’re so happy to have you.

Thank you, Seth.

It’s great to be here, but Thailand would be nice, too.

Well, you know, Thailand would be nice. It would be nice. We’ll hear from Sarah when she gets back, just how nice Thailand was.

I mean, you don’t have it too bad yourself either, Dennis. I mean, you’re in the warm weather yourself. You’re our foreign correspondent from Dominican Republic today, right?

Absolutely.

I’m in Punta Cana.

You thought I was going to say Puerto Rico, but that wouldn’t be a foreign correspondent. That’s part of the United States.

That’s sharp of you, Seth.

Well, we are so, so glad to have you here, Dennis, to talk about all things online travel. If you, as a listener, are not familiar with Dennis, where have you been? How long have you been covering online travel now for Dennis?

Twenty-six years.

That is your second magic number of the day, twenty-six.

Twenty-six years. Wow. Wow.

So you’ve seen a lot of online travel agencies come and go.

The biggest issue when I started, Seth, was what was the better OTA? Travelocity or Expedia or Orbits?

Now all owned by Expedia Group, I think we know the answer to that question. Sometimes these questions do get answered. I want to start us off today, and this is going to be a fairly online travel heavy episode.

This is what we specialize in, me and you, Dennis.

2:42

Booking Earnings Breakdown

Let’s start with Book and Holdings. They just reported earnins last night. You wrote the story on their earnins.

I’ve been through their earnins call, and that was that number of the week I highlighted.

They discussed the Iran War quite a bit, and they really started to give some color and put some context into just how much damage, we can use the word damage, how much damage the Iran War is doing to the travel industry.

Here was the back of the envelope, the Iran War math that Book and Holden’s shared with us. They said RuneNight sold on the Book and Holden’s platforms. That includes Agoda, Priceline and booking.com.

They said RuneNight growth was about 6% growth year over year in the first quarter of 2026. They said it was about 2% lower than it should have been. They think that without the war, it would have been 8% growth.

So they went from 8% to 6%, and we can basically do that math on what it should have been. They sold 319 million room nights in the first quarter of 2025.

6% growth puts you at 338 million room nights sold, but 8% growth would put you at 344 million room nights sold. And we can just do that math, that subtraction. 6 million missing room nights.

An average, I don’t know what the right average daily rate is, but let’s say a room night sells for around 200 bucks these days. 200 times, you know, we do that math, it’s about something like $1.275 billion worth of gross bookings.

And we’re not doing loose math. I’m using the actual numbers. It’s an Excel spreadsheet I’m looking at.

We’re using the actual numbers of what it should be, about $1.25 billion of gross bookings that Book and Holdings thinks they could have sold that they didn’t sell because of the Iran War in the first quarter of 2026. What do you think of that?

I mean, what’s your take there, Dennis? What do you think?

Well, Seth, that was a pretty dour earnings call, but that 6 million rooms, that was just a one-month impact because the war started late February, something like that.

So they project that, well, first of all, they project that the war will be over in June and there’ll be a travel recovery after that. And they mention, well, a lot of people can disagree with that June number.

And they admit, they don’t really know when it’s going to end. But they say the impact will be three percentage points in the second quarter, if it goes to the full second quarter, and ADRs will be lower.

So that’s going to have even more of an impact in the second quarter. But yes, they’re hopeful about a rebound in the second half of the year.

5:26

US Share Gains

The bright spot, though, was the US. So, for years and years, Booking has been saying, booking.com has been saying, we’re launching in the US, we’re trying to gain share, we’re under-indexed in the US. So now, they are finally making some progress.

They said there was low-teen growth in room nights in the first quarter, and we are taking share. So that was definitely a highlight of the call.

And I think we know it, the people on the call probably know it, but let’s just make this assumption explicit, who are they taking share from? It pretty much has to be the Expedia group. That’s sort of the-

Oh, and Airbnb.

Because their alternative accommodation seems to be doing well also.

Yeah. I mean, you’re right. That’s a great point.

6:23

Brand Strategy Debate

So I guess because we have you, Dennis, I don’t want to delve too much on history, but I do think the historical context is interesting just to recap it and talk about it a little bit, right?

Book and Holdings is an interest in conglomerate because, well, you did the oral history of booking.com, which was founded in the early 2000s, really grew up in Amsterdam. They were bought by a small US company in Connecticut called Priceline.

Which was number four OTA at the time.

Now, and so in theory, it’s kind of funny every time booking.com talks about, we need to gain market share in the US, it’s like, you were bought by a US OTA, you’re owned by Priceline. I don’t know.

I mean, this is not that ancient history, but it used to be Priceline was the parent company. They actually rebranded and renamed their parent company to be Book and Holdings to reflect the ascendancy of the booking.com brand.

Whereas Expedia Group contains many, many smaller OTAs, including, I mean, they’re not that small, they’re big OTAs, including Orbitz, hotels.com, Travelocity, and of course Expedia, they have a multi-brand strategy.

In theory, Booking had the opportunity to do a multi-brand strategy as well, grown Priceline in the US, grown booking.com in Europe, and grown Agoda, which is their other subsidiary in Asia.

Instead, they’ve really chosen to pursue a single brand strategy and said, even though we are technically Priceline, we’ve renamed ourselves Booking Holdings, and actually we really want to grow the booking.com brand in the United States, despite the

Do you think it’s a single brand strategy?

Because they still do have Priceline. I do. Okay.

I do.

I mean, that’s just my opinion, but I do. And I think they’re succeeding at it. And I think they are showing one of the, I mean, yeah, I do.

As we both have talked about before, you could have chosen Priceline as the lead brand, but they’ve told me they really had to be strong in international travel and Priceline wasn’t.

So that’s one of the reasons that they chose booking.com.

Yeah. And I think it’s paid some dividends.

8:35

Genius Loyalty Power

I mean, they were talking on this call about their loyalty plan, which is a very hotel-like or airline-like conversation to have. What’s the number now? I think they gave a number over some large, I’ll pull up the number.

You can do a little tip-tap, stall for me, Dennis. But I’ll pull up the number. But they get a large amount of bookings from their genius member.

Yeah, I think they said tier two and tier three loyalty program members were, I don’t know if I remember correctly, something like half of the repeat bookings or an enormous number.

I think so too.

Let me get you the exact quote. Over the last four quarters, level two and level three genius members, there are only three levels of the genius program. So these are the two highest tiers.

Over the last four quarters, level two and level three genius members represented over 30% of our active base and accounted for a high 50% share of room nights up from the prior year.

In other words, they are seeing branded hotel level of loyalty-driven bookings. This is about the same level of loyalty-driven bookings that a Marriott or a Hilton or a Hyatt might see from their loyalty program members.

On the other hand, Expedia Group, which had an incredibly strong loyalty program in hotels.com, but has really struggled to have a unified loyalty program across all of its many brands.

That was the rollout of One Key, which has faced some fits and starts. So I do think they have a single brand strategy. I think they have a single brand strategy tied to loyalty and tied to genius, and they’re seeing market share gains.

It seems to be working.

I have two thoughts there. So, will the LLMs be able to tear those genius members away from booking.com? That’s one thing.

What a great question.

What a great question, Dennis.

10:20

Airbnb Loyalty Questions

And then the other thing is Airbnb publicly said a few months ago that they were testing some kind of discount program, not in the US.

They were incentivizing hosts to offer discounts to see if it would be a needle mover. They haven’t said anything. Maybe they’ll say something in their upcoming earnings call.

But I know those tests aren’t under way right now, so maybe they weren’t that much of a difference maker. Maybe Airbnb won’t launch a loyalty program like everyone thinks it does. It will.

Well, the interesting thing is, are we coming to–I mean, this is a controversial take.

I don’t think we are coming to the end of it. But the question, are we coming to the end of the loyalty program? Are LLM going to rip people away from their loyalty plans?

I don’t know. I mean, Airbnb, we will say this about Airbnb, and they’ve always been very proud of this. They have a very high share of direct traffic.

I haven’t updated in a while, but we look at similar web. You can quibble with whether similar web is right or not. But if it’s wrong, it’s probably wrong in the same ways across the same websites.

So we look at similar web direct traffic at Expedia, at Bookin, at Airbnb. Airbnb gets twice the direct traffic of the other two. And so you do have to, they keep saying the loyalty plan is coming, it’s coming, it’s coming.

You almost see the loyalty plan as a counter signal. Right now, they don’t need loyalty because they get so much direct. They’re only going to need a loyalty plan if they’re screwing up.

Which, I mean, we can talk about Airbnb, but…

Well, they are getting more into hotels now, and hotels have loyalty programs. So I totally hear what you’re saying. Why launch something if you don’t need it?

Maybe as the hotel competition ramps up, maybe they’ll need something.

Yeah, and I think that’s right. I mean, the hotel… Well, I don’t even think…

I’m not trying to quibble with you too much here, but I think hotels are more competitive, period. We say hotel competition ramps up.

They are trying to grow into a hotel space that is far more mature, far more crowded, and where a lot of people in the vacation rental industry will, of course, disagree with me when I say the controversial statement that Airbnb sort of invented the

modern short-term rental, but Airbnb sort of invented the modern short-term rental. Come at me.

When it comes to primary homes.

And they have that. I mean, they are the Kleenex of the short-term rental market, which even though there are companies that have been around for 50 years before them, no one can claim that.

Whereas in the hotel space, they are not going to have that. And that’s going to be a challenge. And there’s a lot of competition.

They are definitely moving. Airbnb is definitely moving to hotels.

13:02

Connected Trip Expansion

I think it’s worth noting that Book and Holdings has been, and I mean, I remember talking about this in the office before we still in office, Dennis, back in 2019.

Book and Holdings has been moving aggressively for half a decade now into alternative accommodations as well. They reported in their Q1 earnings 8.8 million alternative accommodation listings.

And they reported 9% growth in alternative accommodations listings year over year. So this is really notable.

Q1, alternative accommodations room nights grew in line with the total bookin.com room night growth with mix increase in year over year to about 38%.

So about 38% of room nights sold on the Bookin Holden’s platforms were sold as alternative accommodations.

Yep. And they claim to be growing faster than Airbnb in alternative accommodations quarter after quarter after quarter.

I mean, could you imagine Airbnb saying the opposite, that a third of all of their room nights were hotels?

That would be a game changer.

And meanwhile at Bookin, they sell flights now. Traditionally, bookin.com was just selling rooms. I mean, they have been very strong.

You just had Priceline selling flights in the group.

And I believe now, at least as of Q4 2025, that Bookin Holden sold more airline tickets than Expedia Group did in the last, not maybe not this quarter, but certainly in 2025 they did.

Right.

Well, perhaps we’ll discuss AI separately, but Glenn Fogle of bookin.com, Omri Morgenstern of Agoda claims that AI, the AI revolution is going to enhance their ability to expedite the connected trip. So that’s flights and hotels and attractions.

I’m a little skeptical overall, but they claim it’s going to be a positive.

Well, let’s talk about that. I’ll ask you this question, because I mean, I guess the point I’m saying is that Bookin Holden, they’ve seen their room nights decelerate. They used to grow in the double digits, in the teens and 20s.

Now they’re in the single digits, but they’ve expanded in the US, but they now sell alternative accommodations, but they now sell flights. The connected trip seems to be working.

Other than the Iran war and other than some structural compression in the growth, Bookin does seem to be coming out on top. Is AI going to disrupt that? That is the question.

I think they’re growing in attractions, or at least they’re giving more attention to attractions than they have in recent years.

15:58

Glen Fogel Insight

Well, let me ask you just before we move on to this topic, we’re not trying to be Bookin Holden’s fanboys here.

You’ve been plenty critical of Bookin Holden’s on stage. I actually want to ask you this. What do you think, you interview Glenn Fogel every single year at the Skift Global Forum.

You maybe have interviewed him more than anyone else in the world potentially. Give us some insight into Glenn. What do you think?

I mean, arguably, there’s been a lot of Bookin’s successes. Are they all attributable to Glenn? Like what’s going on there?

Like what’s your, what’s the, is there a human insight into Glenn Fogel that you think explains what’s happened in the bookin.com story?

Yeah, I don’t think you can give him all the credit. But I don’t know what I have to say about that. That’s super insightful.

But he remain, I think he is 64 years old or 65 years old, and he clearly remains passionate about his job. He, don’t forget, he’s the CEO of both bookin.com and Booking Holdings. I don’t see him leaving anytime soon.

Yeah, that’s what I would say.

17:03

AI Disruption Debate

And let’s talk AI because you just said you were skeptical of AI.

Glenn and Omri, so Booking Holdings, bookin.com and Agoda, effectively 80% of the business, or maybe not 80%, but a large share of the business, both feel that AI is going to enhance their ability to win. You just told me you’re skeptical.

Why are you skeptical?

Well, I think you have some research that OTA market share versus hotel direct market share is fairly even. And I would think, you know, the OTAs are gearing up now for performance marketing and the LLMs, they’ve been great at that.

But I would think that the disruption ahead is gonna, with new entrants, is gonna change the pecking order somewhat. You know, how could it stay the same? I guess it could, in theory.

Glenn said yesterday that he thinks that it will increase the addressable market for online travel. That booking travel will become easier to do, the trip planning with the LLMs will become easier, and that more people will be traveling and booking.

I guess it makes sense. I mean, Glenn’s point makes some, I mean, at some point, there is only so much addressable market, and his point makes sense.

I mean, I think that, you know, when people, when you still have to plan your trips in guidebooks on pen and paper, it was a lot harder to go a lot farther because you didn’t know what to expect.

The Internet made people feel more comfortable booking the kinds of hotels, the kind of destinations, the kind of experiences that you previously never would have booked sight and seen.

All of a sudden, you could go online and read about them, or even more recently, go on YouTube and watch a YouTube video and see someone explain exactly how to do X, Y, and Z.

And all of a sudden, it doesn’t seem so scary because you’ve seen someone walk you through how to board the train in Japan and how to navigate the Tokyo Metro, which is, as someone who tried to do that 20 years ago, incredibly intimidating.

And as someone who’s tried to do it again recently, incredibly much easier. And I suppose AI will clad in the world even further in that sense, make travel easier, make it more accessible.

But I think your bigger point, and it’s not backed up by any fancy research of, but how could things stay the same? If this is going to be so transformative, how can we possibly expect it to stay the same?

Well, as people say, if the LLMs capture travel discovery, I mean, Google had it before, pretty much, won’t that weaken the financials for the OTAs as they become a little less relevant? So goes the argument.

In my opinion, it has to. I mean, it just has to.

19:44

OTA Marketing Arbitrage

In some ways, the OTA is not entirely this business model, but the OTAs, I think, have like three or four business models kind of wrapped into one nice little business. And one of those is marketing arbitrage.

There are a lot of small hotels all over the world that would like to spend money to acquire customers in different countries from them, in different cultures than them, who don’t speak their language and they don’t know how to reach them.

And basically, the online travel agencies in some form act as a marketing clearinghouse where 100,000 small hoteliers give them some form of their market and budget in the form of commission.

And then, they take that market and budget and they spend it on Expedia groups, and they combine to one giant Expedia group market and budget, and then they spend that market and budget on Google, and they use that giant long-tail aggregated market

and budget to outbid everyone else, including brands. And then, you know, they split, you know, that’s in some way the economics of what’s happening here. And that works because the world starts their travel searches on Google.

And so, you can take that long-tail aggregated market and budget, spend it on Google, performance advertising, and get a nice ROI. And, you know, some of that ROI goes to bookings profits, and some of it goes to the hotel years.

If that basic transaction does not work, that’s a big pillar of the OTA’s value proposition, in my opinion.

Right. And they would argue, we’re experts, we excel at Google, we talk to all the LLMs, we’re ready, we’ll be there, we can do it, but we don’t know how the visibility will change and the competitive landscape there.

21:38

Skift Path to Purchase

Let’s pull up some research that my team has done on the path to purchase.

I think this will kind of go into this conversation. This was a recent survey we just published. We published it this week.

It’s live right now on research.skift.com. And it’s our global traveler survey.

So we’ve been doing these regional surveys, Middle East and North African travelers, Latin American travelers, North American travelers, European travelers, Asian travelers. We can find those all together.

We have this huge global survey size as a sample. And we did some research into path to purchase, into how these travelers kind of in aggregate and on average book. If you’re watching on YouTube, you’ll see it show up right now.

If you’re listening, I’ll talk you through it, but we’re going to pull this one screen right now. It starts with the scroll. As we like to say, it starts with the scroll.

The doom scroll, 36% of travelers are using social media for discovery. So one-third globally starting there. Then we get to desire.

Again, social media is the main platform here. 63% tell us they find I travel ideas on social. Nearly 40% watch vlogs online.

22:41

Search Phase Shift

We go from scrolling and desire. So we start with scrolling on social media, then we get that desire, then we convert to Google. We get to the search phase.

The traveler moves to Google to anchor and validate their idea. Google search remains the number one discovery channel globally.

22:57

AI Enters Decision

But then scroll, desire, search. The next step in our path purchase is decide. And here we see increasingly AI validating the different options, building itineraries, and even starting to compare prices.

63% of travelers report using AI to plan. Finally, the actual conversion, the actual booking. And interestingly enough, we find here 58% book via an online travel agency.

So obviously, these phases of the journey from inspiration to desire, to search, to comparison and research to booking, there’s multiple, multiple tools, multiple, multiple logic points. Those are the most prominent.

It’s interesting that, at least for now, AI and OTA do coexist as the most prominent channel.

So the question is, does the hotel share become greater with the advent of AI? Does it make it easier for direct bookings? Will the OTAs lose some clout?

So that all remains to be seen.

There are people building tools for all this. I think it does raise these, in some ways, very existential questions.

24:08

Trust and Intermediaries

If AI and especially AI agents are capable of doing all this translation and all this work for you, you may not need as many intermediaries, and especially if the trust in the AI is strong.

Right now, I intermediate my trust through booking.com, or expedia.com, or hopper.com, or whoever.com. I don’t know, I’m looking at a small hotel in Greece, and I don’t know you from a hole in the wall.

But I know booking.com, or I know Expedia, and they kind of help me make those decisions. They’re online travel agents.

They’re still the travel agent part of their job, where they help you do things that travel agents have always done, help you compare, decide, and trust the partners that you’re booking with in destination in a very far away place.

There’s probably still a need for that role, but there’s also a question of can an AI algorithm play the travel agent role, which is, of course, an AI agent?

Well, Seth, as you know, the OTAs are building their own AI tools, so it’s not just going to be the ones on the LLMs.

25:16

Customer Service Reality

The other question is, when you arrive at your hotel in Thailand or Singapore, and it’s under reservation and there’s construction outside your window, are you going to call Sam Altman to fix the problem?

No, wait, he’s on trial this week with Elon Musk. But who’s going to handle customer service for the LLMs? I guess they could hire, they could contract with outside call centers and stuff like that, but do they really want to get into that?

I’m playing devil.

They definitely don’t, by the way. I’m sure that Sam Altman does not want to be run in a travel call center. That’s an opportunity for intermediaries and service providers across the travel ecosystem to provide that.

I would simply play devil’s advocate by saying, right now, when you call booking.com or expedia.com or any online travel agency, are you really getting great customer service?

I know we can ask Ariane Agorin or Glenn Fogel this on stage, and they’ll say we invest a lot, and they definitely do invest a lot, but we all know the joke is like, you don’t get the greatest customer service through an online travel agency.

You don’t get the best customer service through a bank either. I’ve booked through some of these bank booking platforms, and you kind of hope they’re going to do a better job, and they do even worse.

And you call them and you get the chatbot, and you are so friggin frustrated, you’re pulling your hair out.

And it’s even worse because now you’re trapped between a bank customer service and then they have some intermediary, and so there’s actually two levels of intermediary now because there’s the bank intermediary, there’s the actual book and service

provider intermediary, and then there’s the supplier. And all three of them are passing the buck to the three of them. I’ve been in that situation, I’m sure many of our listeners have. And yet, these bank platforms are growing by leaps and bounds.

You know, Dennis, you just reported on Capital One. I mean, Capital One is– American Express is big in this business, Case is big in this business, and Capital One is trying to get into this business. Actually so is Citi.

And Capital One was working with Hopper. Dennis, you can follow on a story there. Tell us about that.

27:29

Capital One Buys Hopper Tech

Yeah, so we broke the news.

You know, Capital One was Hopper’s flagship customer, its largest customer. Hopper has pivoted towards B2B. It’s no longer focusing on the consumer side of the business like it was years ago.

And Capital One just did a deal to buy out the tech that they built together to power Capital One travel. They hired 150 or so Capital One employees, Hopper employees, and they became Capital One employees. And Hopper is in a weakened condition.

It did win a bank contract with RBC in Canada last week. Expedia says it bowed out of the competition because the bank wanted exclusivity, which it didn’t want to go for. But one has to wonder about the future of Hopper.

You think this deal weakens Hopper?

I think it definitely weakens Hopper.

I mean, I think maybe numbers wise, the smaller Hopper just cut a hell of a lot across, losing 150 employees. But reputationally, you go out to try to do a B2B deal and your largest customer pulled away, that can’t be a good look.

Yeah.

28:50

Hopper and B2B Arms Race

I mean, so Hopper was this insurgent, is this insurgent online travel agency. They were growing like crazy. They had a lot of gamification.

I do. They do. I shouldn’t talk about them in the past tense.

They have a lot of gamification. They have a very young Gen Z customer base. They have expanded into many, many travel products.

And by all means, they were successful in growing. And they really struck gold in their B2B business. And in many ways, I mean, again, you will quibble.

Many listeners will quibble with my what I’m about to say. But I won’t say they pioneered the B2B business model. I mean, Expedia had been doing it for decades.

But they made it sexy. They brought sexy back to the B2B business. Let’s put it that way.

And they really showed that this would be a powerful driver of growth. They signed Capital One as the flagship customer. They basically built Capital One’s travel booking platform, as I understand it, effectively from scratch.

If you’re an insider there, let me know and correct me where I’m wrong. But that’s how I understand it. And then they started shopping this B2B tech around.

Expedia has also done a huge pivot. I mean, not even a pivot, but a huge reinvestment in its B2B business. Ariane Gorin, the current CEO of Expedia, actually came from their B2B business just to show how prominent it is.

And it sort of sparked this B2B OTA arms race. And so it’s so interesting that this whole thing that was strategy, that was an arms race just a couple of years ago, has now ended in Hopper losing. I mean, they got a nice payoff.

I mean, I should have gone, do we know how much they paid, Dennis?

We don’t know how much they paid. It’s going to be buried in some other financial numbers for the second quarter.

Promise Capital One is too big, that even a big number that’s big for us is small to Capital One.

Interestingly, there’s a smaller US OTA, a cheapo air and one travel owned by Fair Portal. They announced today they’re getting into the B2B business, although they weren’t ready to name any customers.

But it shows that other companies are seeing the opportunity. Booking Holdings, as they’ve said for a year now, they’re reevaluating how their B2B business works.

Priceline has a B2B business, booking.com does, Settles and Gota, and they want to work better together, but they will put more attention towards B2B, it looks like, as well.

31:14

B2B OTAs vs GDS

I have to tell you, in an AI world, isn’t a B2B OTA just a GDS?

Which is to say, in plain English, isn’t an online travel agency which operates in the business-to-business channel just playing the role of a global distribution system?

Of sorts, yeah. They’re distributing their inventory.

Yeah, a global distribution system, their job is to be behind the scenes, to white-label everything, to collect inventory, and to distribute it to all comers, whoever wants to buy that inventory, they’re willing to sell it.

An online travel agency exists to both collect the inventory, but also to have a brand, to have all the things that we’ve actually discussed in this episode, to have customer service, to have marketing arbitrage, to have return on investment to their

market and spend, to have trust, to have a face, to have a loyalty program, right? Customer service, loyalty, marketing budgets, these are things that GDSs don’t have. These are things that online travel agencies do have.

As a result of those things, online travel agencies trade at significant premiums in the stock market to global distribution systems. But it feels to me like some of these B2B deals are just, again, a GDS by another name.

Seth, are you saying there’s something wrong with being a GDS? Just kidding. But I would argue that, or the OTAs would argue that the B2B business also enables them to grab customers that they would not normally get.

A lot of it is international. It’s a bank customer somewhere in Europe that they wouldn’t be able to attract on their own.

Totally.

They’re making money.

And it’s definitely a flywheel. The more money they make, the more they can invest in their marketing. The more they make, the better value they are to their partners.

The more partners they have, the more they can offer consumers. So I see it. But I just worry that.

I mean, I worry for them. I’m not saying there’s anything wrong with being a GDS. But I don’t think that Bookin or Expedia should be a GDS.

They should be a brand.

Maybe you should be worrying about Expedia’s consumer business instead, since the B2B business seems to be outshining it at the moment anyway.

33:26

Expedia CFO Shakeup

And Expedia just got a new CFO.

You also reported on that, right, Dennis?

Yeah, that was so weird because the CEO, Scott Schenkel, had been there for just 16 months. And last month, actually in March, he appeared at a financial conference.

And he said that he and his team since coming in had really changed the game for Expedia in terms of their financial metrics and reporting, that sort of thing. And Expedia named a new CFO just about one month later. No clear explanation.

I think one factor could be, I’m not sure, is that the new CFO is going to be based in Seattle, along with Ariane, and Scott Schenkel was based in Bay Area.

And one financial analyst said to me, it doesn’t work having a CEO and CFO in two different cities. You and I, Seth, work excellent remotely, but maybe it’s different for a CEO and CFO.

Maybe. Yeah. I mean, wouldn’t you just move to Seattle though, Dennis?

I don’t know. If I was the CFO of a public company, let me put this out there right now for any listeners. If you want me to be your CFO, if you’re publicly traded company, I will move to whatever city you want me to move to.

Yeah, because the CFO is often the CEO in waiting, right?

That’s right.

I mean, you spoke to financial analysts of this. Did they say that this was cause for concern or just, and it’s just we don’t know, it’s personnel?

They said they didn’t know what it signals. And with a little hyperbole, I will say it’s sort of like Pete Hegseth firing the secretary of the Navy in the middle of the Iran War.

I mean, this is not the current climate to change CFOs, if you want to project stability. And by the way, I think Expedia is going to be less impacted than booking.com was by the Iran War because it has less exposure in the Middle East.

Because it’s such a bigger, US is such a bigger part. I mean, it makes perfect sense. And I mean, the fact is, I mean, booking.com talks about taking some share, but we don’t actually know who they took the share from.

For all we know, they took it from Airbnb or Hopper, or cheapo tickets. But they did report positive consumer travel spending growth in the United States.

In fact, that was one of the big positive read-throughs for me of Booking.com’s earnings, was that in Europe, Asia and the US, they saw strong room night growth, with the big impact being Middle East transit through, or travel to or travel from the

Middle East, which is huge, but it’s good to know that it’s relatively, isolated and yes, that should bode very well for Expedia, which is significantly less exposed than their peer. They’re going to report later in the next couple of weeks, so it

will be exciting to hear from them. So what do you think, Dennis? I mean, let’s wrap up, we’re talking a lot.

36:29

Airbnb Services Debate

Any thoughts on Airbnb to close?

Yes. I think here’s my prediction in the next couple of years, in the next two years, I think you’ll see Airbnb shut down either experiences or services or both. That’s my guess.

Oh, I don’t think so, Dennis.

Okay.

That’s a good bet. Don’t you think they’re trying to do too much at once?

No, I don’t. Okay, this is a good debate, Dennis. We should have gone to this earlier.

Okay. Well, one, we do a bet the coffee segment. This will not be a weekly one, but let’s put a bet on this.

What? You want to put a date on it for Airbnb shuts down? Like you said, a year, two years?

We have long memories here.

2028.

2020. I’ll buy you a big coffee because it’s a long bet. We got to lock you up for a bit.

See, I think Brian Chesky has too much invested in this. Oh, he does. They can’t back down.

The only way through is forward at this point for them.

You’re saying that an ego play, they can’t back down from an ego play if it’s not performing well and it’s wasting money?

But it’s not even an ego play because they bet on it for growth. And so if they are going to provide the growth that is baked into their stock, I mean…

Look, we started this conversation talking about book and holdings and how it has succeeded in expanding to alternative accommodations. I mean, they’re not the dominant player by any means, but they’ve grown, they continue to grow.

Same thing with flights. They don’t sell anywhere, you know, they’re not the largest seller of flights in the world, but they’ve slowly but steadily grown flights. And you even said earlier, they’ve done experiences.

Expedia has done experiences. They’ve always done flights. They even sell crews.

All of the, you know, same thing with trip.com. In China, we don’t talk about Trip as much, but, you know, they sell package tours, they sell flights, they have hotels.

All of the pantheon, the big three of the most successful online sellers of travel in the world have done it by expanding into multiple products.

Two points.

Yeah, please.

Maybe the growth will come from hotels. They’re doing ground transportation now. They’re talking about flights.

We know that attractions is a rough business. So that’s one thing.

And then the other thing is, imagine you’re launching, as Airbnb, you’re launching all these products, and you’re trying to remake the company at the same time for AI, which Airbnb has been slower than the other OTAs in terms of consumer-facing

technology. So they have a new CTO recently. Perhaps the outgoing CTO wasn’t making the cut with all this going on.

Well, I would be… I mean, it’s hard to argue with you, Dennis, and it’s hard to bet against it. You’ve seen it all, but I would be very surprised.

Let me put it that way.

Well, 2028, Seth, I’m buying you a coffee, a large coffee, or you’re buying me one.

Yeah, absolutely. Absolutely.

40:04

OTAs Still Dominate Booking

So let’s wrap this up. And I have one more piece of research to share. And it’s this thing about channels and what channels we use for booking.

You know, we’ve talked a lot on this episode about online travel agencies and booking platforms. And in some ways, Dennis and I are a bit of backseat drivers. We’re being critical and we’re here on the sidelines.

We’re taking pot shots and what’s a very hard business. And we’re being critical and we’re questioning about the future of AI. And the reality is, and we’ll pull up this chart, the death of the OTA, I think, has been much exaggerated.

And what’s interesting, we talk about direct bookings, we talk about AI, we talk about all these things. Globally, the most popular booking channel in the world, period, full stop, is the Online Travel Agency.

And we see that in our data, we see almost 58% of, this is percentage of travelers using each booking channel. This is a select all that apply, so you can book more than one, you can book multiple hotels, multiple flights per trip.

This is select all that apply, but 58% of travelers globally have told us that they have used an Online Travel Agency. 50% say they’ve gone directly with a Hotel the Airline, 25% with a professional travel agent, and 16% as part of a package tour.

Ultimately, these are the four core channels with all the world of social, AI and all the other stuff. These are the four core ways to actually get a place to stay and to get there and a place to sleep and how to get to your destination.

At the end of the day, the online travel agency remains the most popular.

Now, there are shifts happening all over the world, but this is global and this includes Asia, this includes Middle East, this includes North Africa, this includes Latin America, which are very online travel agency heavy markets.

For all our hand, Regan, and all of our worries and concerns and all this stuff, it does seem like, at least for now, it’s still an OTA’s world. So I think that’s a good reminder to close on, maybe. I don’t know, Dennis, what do you think?

Absolutely, there’s a lot of staying power there, a lot of disruption ahead.

They’re confident that they could weather the storm and are well-equipped to deal with what’s ahead. We’ll see. It’s interesting that with the traction of social media that you haven’t seen any inroads in booking on those platforms.

Well, we still see them.

I mean, we see some conversions to social media, and certainly there are some niche booking tools. But ultimately, you can’t really book through Facebook. You’re booking through.

A lot of people tried over the years, yeah.

And what was it?

I think it was Glenn Fogel. I think it was Glenn Fogel. He said this to you on stage at the Global Forum where he said, aren’t we tech companies?

Isn’t AI tech? Why are people thinking that the travel tech companies will be disrupted by travel technologies? Didn’t he say something to that effect to you, Dennis?

I think so.

And if you would have heard on Wednesday, the Agoda CEO talking about how they’re remaking the entire company from the bottom up, using multiple agents, talking to one another, you have to think they’re well positioned tech-wise for the AI

Well, certainly there’s a lot at stake.

Given the fact that they are the most popular channel globally, there’s a lot of dollars at stake for whoever succeeds here.

Incumbent challengers, third parties, B2B white labeling, cross category multiple products, lots and lots happening in this space. Dennis, thanks for joining me.

43:44

Winners Losers and Lessons

We got to play one last segment. We got to play the winners and losers of the week. Do you have a winner or a loser for this week?

Wow, that’s tough.

Well, I guess you would have to say that booking is somewhat of a loser for this week. They took a big Iran hit in the quarter. They project a larger one in the second quarter.

But they’ve seen this game before, and they’re confident that travel will come back and so will they.

We haven’t heard from Expedia and their earnings yet, but presumably if booking is a loser, that makes them the bit of the winner. Like we were saying earlier, they are much less exposed to Iran, and the enemy of the enemy is my friend. I don’t know.

Well, maybe, we’ll can expect they aren’t truly enemies. I think, this is the different one. Me and Sarah sometimes, we’ll talk about this pop culture travel stuff.

I think one of the losers this week is probably the State Department and its new US Passports Special Edition with Donald Trump’s face on them. What do you think of that, Dennis?

Well, speaking of Donald Trump, another loser of the week is Scott Kirby and United Airlines, because he proposed a merger with American. Supposedly, he asked Trump about it, who wasn’t crazy about the idea.

That airline stuff, man, Dennis, you’re an online travel journalist, but that airline stuff, what’s going on there? I just want to close with this. I just want to ask you one more.

I mean, you’ve been covering this for 26 years. What do you think is, give us a big, what’s your biggest lesson, biggest piece of advice to any of our listeners in travel and tourism, 26 years of journalism covering online travel agencies?

What do you think we need to know?

I would say that success or failure, a lot of it is about the resiliency of your management.

You know, whether you have really good people in there, rather than the business model, your ability to pivot and reinvent yourself, that’s what it’s all about.

I think that’s great advice, especially in this time when there’s so much technology changing, so many business model changes, people are what makes sense. Dennis, hey, thanks for joining me on this podcast. I really enjoyed talking to you, man.

Totally fun, Seth.

Really enjoyed it.

All right. Hopefully, we’ll do it again soon. Enjoy, Dennis, and thank you for listening.

We’ll see you next time on another episode of The Skift Travel Podcast.