How Booking Holdings and Expedia Are Taking Opposite Bets on AI Shopping Agents
How Booking Holdings and Expedia Are Taking Opposite Bets on AI Shopping Agents
Omor Ibne EhsanThu, October 1, 2026 at 1:05 PM UTC
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Expedia partnered with Muse while Booking refused, protecting a direct channel mix holding in the mid-60s that Expedia has already ceded.
Meta's Muse hit 560,000 daily users in 11 days, leading Truist to cut OTA price targets while admitting Muse's full booking impact stays highly uncertain.
About 90% of Booking's room nights come from independent hotels AI agents can't bypass directly, keeping Booking embedded in 73% of gross booking transactions.
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Meta Platforms (NASDAQ:META) launched Muse, a shopping agent that reached 560,000 daily active users within 11 days.
Truist then cut price targets on Booking Holdings (NASDAQ:BKNG) and Expedia Group (NASDAQ:EXPE) on the same day, citing Muse.
Both online travel agencies (OTAs) kept their ratings. Booking stayed at Buy with its target cut from $242 to $216, and Expedia stayed at Hold with its target cut from $309 to $288. The two companies responded to Muse differently, and Booking's approach likely holds up better.
Expedia Joined Muse While Booking Kept Its Direct Channel
EXPE Analyst Ratings — 24/7 Wall St.
Expedia partnered with Muse and is integrated for travel booking there. That suits a company whose B2B revenue, which powers other brands' travel sites, grew 23% last quarter.
Booking stayed out. Its consumer direct mix held in the mid-60% range for four quarters, and large language models send "significantly below one percent" of its room nights.
Partnering risks teaching Meta how travelers shop, which could help it bypass Expedia later, and declining risks missing agent-first travelers, a smaller cost while that traffic stays tiny.
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Independent Hotels Keep Booking Essential to AI Agents
The same firm estimated that only about 10% of Booking's room nights come from the top global hotel brands. Big chains run loyalty programs and booking systems an AI agent can plug into directly, but independent hotels lack that technology, so an agent seeking their rooms still needs Booking. Booking also processes payment on approximately 73% of gross bookings, which keeps it inside the transaction.
Both stocks have already absorbed similar damage.
Booking fell 17.98% over the past month, and Expedia fell 16.95%, nearly identical damage. Booking's 25-to-1 stock split effective April 2, 2026 explains why its $162.91 shares look small beside Expedia's $263.36. On forward earnings, Booking trades at 13 times and Expedia at 11 times.
Target Cuts Came With an Admission of Uncertainty
The firm warned that Meta poses "greater downside risks to OTAs given the company's strong consumer position," but admitted the "extent to which Muse or other AI agents will affect OTA bookings share remains highly uncertain."
Retail shows the same split: Amazon (NASDAQ:AMZN) blocked Muse, while Walmart (NASDAQ:WMT), Wayfair (NYSE:W) and Sephora joined as launch partners. Meta's chief executive said Meta will profit from a small transaction fee, a toll that would likely come out of travel sellers' margins.
Booking Looks Better Positioned to Withstand Muse
BKNG Analyst Ratings — 24/7 Wall St.
Booking looks better placed of the two. Revenue of $7.35 billion beat estimates, Transformation Program savings now target about $650 million by the end of 2027, and its hotel base sits further from Muse.
Expedia posted 14% revenue growth and raised guidance, but its partnership strategy leaves it more exposed if Meta's fee pressures partner economics.
My view changes if Booking reports large language model traffic climbing well above 1% of room nights. Pair that with a direct mix sliding below the mid-60s, and Booking would be paying for customers it once owned.
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