When ChatGPT opened its Apps marketplace to 800 million users, Booking.com and Expedia were already there. Day-one partners. Ready to intercept travelers at the moment they start planning.
NB: This is an article from Lighthouse
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If that sounds familiar, it should.
OTAs have perfected this playbook over two decades: move fast on new distribution channels while hotels deliberate.
They did it with metasearch. They did it with mobile. And now, they’re doing it with AI.
But something different is happening this time. The economics that made OTAs powerful are starting to work against them.
The $14 billion question
Here’s what most hoteliers don’t realize: Expedia and Booking.com spend a combined $14 billion annually on marketing, most of it buying visibility in Google search results.
That’s not a typo.
Expedia alone dedicates more than half its revenue to marketing. Their entire business model depends on intercepting travelers at the earliest stage of discovery and converting that attention into bookings.
AI is scrambling those economics. As Harvard Business Review recently noted, travelers are increasingly getting what they need inside AI interfaces rather than clicking through to external sites.
Discovery is drifting away from the platforms OTAs have spent billions to dominate. And, as planning moves into AI conversations, OTAs have fewer opportunities to shape intent, cross-sell products and capture the guest relationship.
This matters because it creates an opening that hasn’t existed in years. New agentic AI tools are being designed to connect directly to hotel supply, giving properties a potential channel that bypasses OTAs entirely.
Where travelers are starting their search
According to Phocuswright, nearly four in ten travelers are already using AI tools to research and plan trips, and more than half of active travelers now use AI in some capacity. Skift’s research reinforces the trend, showing that generative AI has moved quickly into mainstream travel planning behaviour.
When someone asks ChatGPT for a boutique hotel in Lisbon or a family resort near the coast, the entire conversation takes place within the AI. Not on Google. Not on an OTA homepage.
Without a direct presence on these platforms, hotels are reduced to whatever the AI can scrape from the web: generic descriptions, outdated details and no booking capability. The guest relationship starts and ends with someone else, and hotels pay 15-25% commission for the privilege.
