Booking CEO Says AI Chatbot Referrals Are 'Pretty Darn Small' As It Guides Room Nights Up Just 1% To 3%
Glenn Fogel and CFO Ewout Steenbergen say AI agents may lower customer costs, while fourth-quarter room-night growth is guided to 1% to 3%.
Booking Holdings CEO Glenn Fogel told analysts on the company's third-quarter earnings call that referrals from AI agents are "pretty darn small," and that a more fragmented AI discovery landscape could let Booking win customers more cheaply. The online travel company guided fourth-quarter room nights to grow just 1% to 3%, after 7% growth in the third quarter.
Small today, possibly cheaper tomorrow
Asked by a Morgan Stanley analyst about travel activity on early AI agents, Fogel said the company believes it is capturing a good share of the referrals that exist. Over time, he said, agents may become another significant source of business, and the reduced friction might even lift conversion.
He called greater fragmentation in how people begin discovery "a wonderful thing" in his own words, because it "enables us to actually be able to obtain customers at a lower cost."
CFO Ewout Steenbergen said referrals from large language models, the engines behind chatbots, have accelerated over recent weeks but still account for significantly less than 1% of Booking.com's room nights. He said the AI platforms are still working out their economic models and like to connect to aggregators, which he called good for Booking and a source of diversification across third-party channels.
Steenbergen also said Booking.com's daily AI search visitors rose tenfold in the third quarter from the second.
A three-part AI plan
Booking, which runs Booking.com, Priceline, Agoda, KAYAK and OpenTable, laid out three prongs: build its own AI agents, join outside channels that bring incremental demand, and use AI to cut costs. Fogel cited the Lola and Aveo launches so "people can come to us first."
On partners, Fogel said the company works with all the major players, including Meta, OpenAI, Google, Anthropic and Amazon, and told an Evercore ISI analyst not to read Agoda's Muse launch in Singapore as a sign of priority over a US deal.
On costs, third-quarter customer service costs fell despite higher booking volumes. At Agoda, the blended cost per million AI tokens dropped by more than 25% between June and September.
A sharp fourth-quarter slowdown
Third-quarter room nights grew 7%, up from 5% in the second quarter. Gross bookings rose 10%, adjusted revenue 9%, and adjusted EPS 17% to $4.66. Results topped the high end of guidance on each key metric, management said.
For the fourth quarter, Steenbergen said guidance assumes the direct and indirect effects of the Middle East conflict persist through year-end. He guided room nights up 1% to 3% against what he called the toughest prior-year comparison of 2026, with gross bookings up 2% to 4% as reported.
He also pointed to October disruptions to Middle East travel, elevated airfares and localized unrest in certain European cities. Booking's market value stood at $115.5 billion after the call.
Steenbergen said Booking will give 2027 commentary in February with fourth-quarter results, and plans to launch a combined B2B business on January 1, likely with separate reporting.
