Why AI Is Unlikely to Kill OTAs

Online Travel Agency (OTA) stocks such as Booking and Expedia both reacted very positively yesterday after The Information reported OpenAI’s retreat from direct checkouts. From The Information:

OpenAI is scaling back its plan to introduce shopping directly inside ChatGPT, marking a change in its high-profile effort to put checkouts inside the chatbot. Instead of allowing users to make purchases directly from product listings that show up in ChatGPT search results, the company is now focused on having checkouts take place inside of specific apps that plug into ChatGPT, an OpenAI spokesperson said.

The stock reaction following this reporting makes it apparent that disintermediation has been a top-of-mind concern among investors. In fact, I too received multiple emails over the last month or so asking me about my thoughts on OTA’s disintermediation risk. In response, I have largely reiterated that disintermediation risk is highly likely to be overstated for OTAs, especially for Booking even before OpenAI’s retreat. I will elaborate my thoughts on why Booking’s disintermediation risk is likely overstated behind the paywall.

In addition to “Daily Dose” (yes, DAILY) like this, MBI Deep Dives publishes one Deep Dive on a publicly listed company every month. You can find all the 66 Deep Dives here.