Investors Are Nervous Google’s Next AI Agent Will Rival OTAs

Google has revealed that it is developing an agentic AI solution that will enable travelers to plan and book flights and hotels directly from the Google Search page.

The tool, part of Google’s emerging “AI Mode,” aims to streamline travel planning by integrating real-time flight and hotel data, pricing, availability, and local recommendations into a single conversational experience.

With this technology, travelers will be able to describe their travel preferences in natural language, compare relevant options, refine their choices, and complete reservations.

To support this capability, Google is working closely with major online travel agencies, including Booking.com and Expedia Group, as well as leading hotel groups such as Choice Hotels, IHG Hotels & Resorts, Marriott, and Wyndham.

The announcement has already generated market reaction. Analysts suggest that Google’s ability to position itself at the top of the travel search funnel may shift traffic away from traditional OTAs, forcing them to increase marketing spending. As a result, shares of Booking Holdings and Expedia Group fell between 4 and 7 percent following the news, reflecting investor concerns.

In response to rising speculation, Google clarified that it does not intend to become an online travel agency. Instead, it plans to collaborate with existing OTAs to facilitate bookings through its AI-driven interface.

Google has long had the technical capability and market position to integrate direct booking into its search experience, even before the emergence of agentic AI tools. However, there are two key factors that likely prevented Google from moving aggressively in this direction: its advertising revenue from OTAs and the risk of triggering major antitrust scrutiny.

For additional insights into how agentic AI tools may transform travel distribution and impact the competitive positioning of OTAs, read our explainer on AI travel agents.

Photo by BoliviaInteligente on Unsplash