Artificial intelligence is starting to reshape the mechanics of how hotel rooms get searched and booked. Platforms like DirectBooker are working to give AI agents real-time access to hotel rates, availability, and amenities, cutting out some of the traditional middlemen in the process.

But here's the twist: according to BTIG analyst Jake Fuller, the big online travel agencies—Booking Holdings Inc. (BKNG), Expedia Group, Inc. (EXPE), and TripAdvisor, Inc. (TRIP)—are actually well-positioned to thrive in this new AI-driven landscape, not get disrupted by it.

Fuller recently spoke with DirectBooker co-founder and CEO Sanjay Vakil, a former Alphabet Inc. (GOOG) hotel product leader who's worked on both the platform and supplier sides of the travel industry. The conversation reveals why building a better mousetrap in travel booking isn't quite as simple as it sounds.

The Fragmentation Problem Nobody Talks About

There are over 1.1 million hotels scattered across the planet. The top 15 hotel chains? They control roughly 4% of that supply. This is a wildly fragmented market, and that fragmentation is the entire game.

Fuller points out that aggregating all that long-tail inventory—the boutique hotels, the regional chains, the independent properties—remains the core technical challenge for any AI booking platform. And it's exactly the problem that Booking and Expedia have spent decades solving, property by property, contract by contract.

Investors are increasingly excited about the idea of AI agents autonomously booking travel "on your behalf," Fuller notes. But without intermediaries who've already done the grunt work of aggregating global supply, that vision runs into serious technical walls. He maintains Buy ratings on both Booking and Expedia, emphasizing that their scale provides immediate, reliable access to global listings that newer platforms simply can't match yet.

Vakil argues that lower-cost distribution models could eventually lure hotels toward newer aggregation platforms. Fuller's counter? Speed and scale still matter more, and the incumbents have both in spades.

AI Monetization Will Look Familiar

Fuller expects AI-driven booking monetization to mirror the paid search auction models that already dominate digital advertising. Historically, those systems reward platforms with the broadest selection and the strongest conversion rates—exactly where Booking and Expedia already excel.

That structural advantage should carry over into AI booking economics. TripAdvisor also benefits from extensive hotel content and strong brand trust, though it doesn't match the transactional scale of the two larger players.

What It Means For Valuations

Fuller sets a 12-month price target of $6,250 for Booking Holdings, applying a 2026 price-to-earnings multiple of 25 times. He's basing that on earnings growth comparable to other large-cap internet companies.

For Expedia, the $275 forecast reflects about a 17-times multiple on 2026 GAAP EPS, aligned with an expected earnings growth rate around 25%.

The takeaway? AI might be changing the interface through which people book hotels, but the messy, unglamorous work of aggregating millions of properties worldwide still matters enormously. And right now, the companies that have already done that work are the ones best positioned to win in the AI era.