Expedia Doubles Down on AI as It Faces Rising Competition from Agentic Platforms

In a clear signal that the artificial intelligence revolution is reshaping the travel industry, Expedia has significantly escalated its focus on AI—both as a competitive threat and as a core driver of its own product and operational strategy.

The Seattle-based travel giant’s newly filed annual 10-K report contains a telling update: for the first time, Expedia explicitly cites “generative and agentic AI” as a competitive risk. The company warns that these technologies could intensify competition by shifting consumer behavior toward AI-driven platforms where Expedia “may lack a significant presence.” This marks a notable shift from previous years, when AI was mentioned only in passing. Now, the company names “companies offering AI agents” as a distinct competitive category—underscoring how rapidly the landscape is evolving.

This isn’t just corporate caution. It reflects a real and accelerating change in how travelers are beginning to plan and book trips. Instead of typing queries into Google or browsing travel websites directly, a growing number of consumers may soon rely on AI assistants—intelligent agents capable of researching, comparing, and even booking travel autonomously. Expedia is positioning itself to ensure it remains visible and functional within these new ecosystems.

On its recent fourth-quarter earnings call, CEO Ariane Gorin emphasized the company’s aggressive experimentation with AI integration. “We’re working with all the major platforms to ensure our brands are surfaced in generative AI searches and function effectively with agentic browsers,” she said. While AI-driven bookings remain a small fraction of overall volume today, each partnership provides Expedia with critical data on shifting traveler behavior.

Internally, Expedia is moving fast to bake AI into its own products. The company is rolling out conversational tools and natural language interfaces, including an AI agent within Hotels.com, as well as AI-powered filters and property Q&A features. Gorin hinted at more to come, promising later this year to share how Expedia plans to use AI “to allow people to go from trip planning all the way into booking” in a seamless, conversational flow.

In October, Expedia took a concrete step by launching its own app for conversations within ChatGPT, allowing users to plan trips directly within the AI interface. This move positions Expedia at the intersection of traditional travel booking and the emerging AI-driven discovery experience.

But Expedia isn’t just adapting its customer-facing tools—it’s also deploying AI aggressively behind the scenes. Gorin described “tangible benefits” from internal AI adoption, with product and engineering teams using AI to build features faster, supply teams accelerating inventory onboarding, and customer service teams resolving traveler issues more quickly. The company reported record levels of self-service resolution, a direct result of these AI investments. “We’re deploying AI internally to give our teams superpowers,” Gorin said, “and make our offerings to travelers and partners even more competitive.”

At the same time, Expedia is doubling down on its direct relationship with customers as a competitive moat. Two-thirds of bookings already come from travelers who start directly with Expedia’s brands, and those direct bookings are growing faster than indirect channels. This focus on direct engagement is crucial as AI agents could otherwise bypass traditional travel sites entirely.

The company’s 10-K filing also raises a new red flag: “agentic booking capabilities that may lack strong consent controls” could significantly increase fraud risks. This suggests that as automated booking systems become more prevalent, new challenges around consent, authorization, and security will emerge—areas where Expedia sees both risk and opportunity.

Expedia’s headcount dropped 3% to 16,000 employees as of December 31, with about half in tech-related roles. The company recently laid off 162 workers in Washington state as part of a broader workforce reduction. However, CFO Scott Schenkel clarified that the company is simplifying its product and technology organizations and will “use much of the savings to strategically rehire in key areas like AI and machine learning.” This pivot underscores Expedia’s commitment to building AI expertise even as it streamlines other areas.

Financially, Expedia is in a strong position to fund this transformation. The company reported fourth-quarter gross bookings and revenue up 11% year over year, providing the resources needed to invest heavily in AI capabilities.

As the travel industry stands at the crossroads of tradition and technological disruption, Expedia’s strategy is clear: embrace AI both as a tool for innovation and as a force to be reckoned with. By integrating AI deeply into its products, operations, and partnerships—while also shoring up its direct customer relationships—Expedia is positioning itself not just to survive the AI era, but to lead it. The race is on, and for Expedia, the message is unmistakable: adapt, innovate, and deploy AI everywhere.

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