Expedia stock drops 12% as CEO says AI has not yet changed booking habits

Expedia Group shares slid approximately 12 percent on Thursday following a statement by Chief Executive Ariane Gorin that artificial intelligence agents have not yet altered how customers finalize travel reservations. Gorin made the comments in an interview, noting that while the technology is useful for initial inspiration, the core booking process remains unchanged.

The remarks come as personal AI tools, including Meta's Muse and OpenAI's Dots, gain traction with everyday users. These applications are designed to handle scheduling and shopping tasks, positioning them as potential competitors to traditional online travel agencies. Industry observers view travel planning as a key area where these tools could eventually capture market share from established platforms.

Gorin stated that Expedia is actively working with AI developers to ensure its listings appear in generated results. The company is also examining how these agents gather information and implementing necessary technical integrations. She acknowledged that AI agents could eventually build independent travel programs and take share from current market leaders.

However, the executive argued that the complexity of travel services makes full automation difficult. She emphasized that customers need confidence in the accuracy of amenities and pricing. Furthermore, she noted that if issues arise, users expect a human to answer the phone and resolve problems, a service level she believes AI agents are not yet equipped to provide reliably.

The stock decline followed the company's release of fourth-quarter guidance, which fell short of Wall Street expectations. Expedia projected revenue between $3.69 billion and $3.75 billion for the final three months of the year. The midpoint of this range is lower than the $3.74 billion analysts had forecasted, according to data from FactSet.

Gorin attributed the softer outlook to geopolitical events in the Middle East and Europe, the midterm elections, and a strategic decision to move the fall sale from the fourth quarter into the third quarter. She pointed to strong results from the third quarter, where total gross bookings increased by 11 percent and revenue rose by 12 percent.

The company's next scheduled financial update will detail how these AI integrations progress over the coming months. Investors will watch to see if the shift in customer behavior begins to impact revenue figures as the year closes.