Expedia Group sees both reward and risk in the rise of AI-powered travel
More than 30% of Expedia Group’s automated customer support interactions are now handled by AI. Its rapidly growing sales channel makes its products visible in AI responses. And the company now has travel booking integration across ChatGPT and Claude.
Expedia Group CEO Ariane Gorin provided new information about the Seattle-based internet giant’s AI on the company’s first-quarter call Thursday, outlining a strategy that includes both internal cost reductions and a bet on chatbots as a new source of customers.
The company reported revenue of $3.43 billion, up 15% year over year, and adjusted earnings of $542 billion, up 83%. Its first quarter profit was 15.8%, the highest in 15 years.
Expedia stock fell about 6.5% on Friday, however, as investors reacted to the company keeping its full-year guidance unchanged despite strong first-quarter results.
In addition to its Expedia portal, Expedia Group includes Hotels.com, Vrbo, and a B2B business that enables hotel bookings for partners including airlines and corporate travel companies. Last week, it became Uber’s exclusive hotel partner, which will integrate Expedia’s lodging listings into its app.
Impact of AI: The AI push is an opportunity and a defensive necessity for Expedia. The company lists “AI-powered platforms” among its competitive threats, reflecting concerns that chatbots could cut online travel agencies out of the booking process entirely.
OpenAI recently reversed plans to allow opt-outs directly within ChatGPT, a decision that sent the OTA’s stock higher in March. Gorin said he was not surprised by the pushback, saying that booking and providing services is too complex for AI platforms to handle on their own.
If the market is moving toward a premium model, he said, “that’s a space we know very well.” Expedia was among the first travel brands to launch as an app within OpenAI’s ChatGPT last October. The company went live with ads on ChatGPT in February.
In addition to the travel booking integration on ChatGPT and Claude, Gorin said Expedia is also working on appearing on Google’s Gemini.
He noted that traffic and bookings on AI-driven channels are low but the company is encouraged by the mix of new users, conversion rates, and average purchase size.
New functionality: Gorin said Expedia handles about 250 million customer interactions a year, more than half of which are resolved through self-service and a growing share powered by AI.
The company has reduced customer service agent onboarding time by nearly 60%. When customers need a human agent, AI generates summaries of previous conversations so agents don’t have to start over. The program now works in more than 30 languages.
At the same time, Expedia has cut hundreds of engineering, product, and technology jobs in the past two years, including 162 roles at its Seattle headquarters earlier this year.
Cost of AI: Outgoing CFO Scott Schenkel said the company expects AI spending to rise in the second half of the year but is funding the investment with cuts elsewhere. The company did not disclose specific AI costs as a line item in its earnings report or conference call.
Gorin said that the company is not holding back on the adoption of AI but is also strategic about its use, considering where the technology is used to ensure that it returns.
