Booking.com’s visibility model is under pressure as AI reshapes travel discovery

This piece examines why Booking.com’s control of travel discovery is fragmenting and how that change could affect hotels, OTAs, and related services like transfers and taxis.

Visibility versus transaction: the core of the business

Booking.com’s economics rest less on processing a hotel reservation and more on selling visibility. Base commissions (typically 10–25%, commonly around 15%) are only the entry point. Greater margins come from a layered set of paid placements: Preferred Partner fees, participation in Genius loyalty discounts, sponsored placements, and mobile-first positioning. Each pixel of the interface can be monetised.

At the same time, Booking.com has pushed into a merchant model — collecting payment from travelers and paying properties later. Merchant operations produce float income and foreign-exchange spreads, with Virtual Credit Cards adding cost pressure on hotels. Merchant revenue is now estimated to account for roughly 60% of total revenue, while marketing spend remains large: in 2024 Booking Holdings reported marketing outlays roughly 31% of revenue.

How these streams fit together

AI platforms: the new gatekeepers of discovery

Major technology platforms — Google, OpenAI, Perplexity, Microsoften Amazon — are building agentic travel assistants that change how travelers ask for options. Instead of typing into a booking site, users will ask an AI for recommendations and receive a curated list or a booking action handled by the platform itself.

When discovery shifts to these agents, the hierarchy of visibility that Booking.com currently monetises still exists, but the platform capturing that hierarchy will likely be the AI provider. That means control over which properties appear first — and who collects the payment — may move away from Booking.com to the AI platforms themselves.

What hotels and suppliers can do

• Connect inventory directly via CRSs, channel managers, or GDS feeds to reduce dependence on a single OTA.
• Negotiate clear terms for merchant settlements and Virtual Credit Cards to protect margins.
• Diversify distribution and build direct booking incentives for loyalty and repeat customers.

Market valuation and timing risk

Investors currently price Booking.com’s future under assumptions of sustained margins and growth (valuation multiples reported near 34x earnings in recent commentary). If visibility economics migrate to AI platforms within a few years, margin compression could follow quickly — a risk the market may not yet have fully priced.

Practical implications for travelers and transfers

For travelers, the changing discovery landscape means the path from search to booking may shorten and shift away from familiar OTAs. That has immediate implications for related services: airport transfers, local taxis and private drivers often sell alongside hotel bookings or as add-ons. If AI bookings consolidate payment and cross-sell, transfer providers will need direct distribution channels or partnerships with platforms that let customers pick exact vehicle types and view driver details.

Platforms that offer transparency about vehicle make, model, driver ratings, and exact pricing will be advantaged. Choosing a transfer through a service that lets you select the car, confirm the number of seats, and see fare breakdowns reduces surprises at arrival.

• Always check the vehicle class and seat count before booking a transfer.
• Confirm driver license and provider verification when possible.
• Compare exact fares and cancellation terms rather than relying solely on branded OTAs.

These adjustments are not only practical for travelers but also for taxi and transfer companies preparing to work with AI-driven discovery channels.

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In summary, Booking.com’s historic advantage — control of what travelers see — is being challenged by AI platforms that can own discovery and payments. Hotels and OTAs must rethink distribution, payments, and partnerships; travelers and transfer providers should prioritise transparency, direct channels, and clear pricing. Platforms that let users choose the exact car, view driver licenses and ratings, and compare fares will be better placed in this new landscape. LocalsRide.com supports this shift by offering global, user-friendly booking of personalised transfers, trips, and deliveries with transparent pricing, vehicle details, and verified drivers, helping travellers get the best match of service, price, and convenience in city-to-airport and point-to-point journeys.