Bank of America industry checks spanning the US, China and India indicate online travel agencies (OTAs) worldwide are stepping up investments in artificial intelligence to improve how customers discover, plan and complete travel. The research finds this push is taking place even as investor doubts about AI's implications have contributed to valuation pressure across the sector.
Year-to-date stock moves show a broad de-rating among major OTAs that Bank of America attributes primarily to AI-related investor concerns. Booking and Expedia have fallen despite receiving earnings upgrades, while MakeMyTrip has experienced the largest multiple compression at 35%. On Bank of America’s numbers, OTAs now trade at about 13 times calendar year 2027 estimated price-to-earnings. MakeMyTrip continues to trade at a premium relative to global peers, although that premium has reduced toward a more normalized level.
Investors, the checks indicate, are focused on three principal risks arising from AI adoption:
- Potential disruption of the discovery funnel, which could change how consumers find travel products.
- Compression of take rates as distribution and transactional models evolve.
- Rising costs associated with hyper-personalization that could squeeze margins if not offset by efficiency gains.
Despite these investor worries, Bank of America’s analysis notes several structural cushions for incumbent OTAs. Fulfillment of travel services - including ticketing and post-booking support - largely remains with these platforms, allowing them to capture delivery economics. Their proprietary data sets provide seasoned OTAs with an ability to continue adding value, and demand-side dynamics, particularly in Asia, suggest many consumers still require hands-on assistance while traveling.
Regional implementation varies. In the United States, the emergence of agentic AI capable of end-to-end trip planning and booking is identified as a core structural trend. Google and OpenAI are cited as rising ecosystem gatekeepers in this scenario, and OTAs are responding by embedding directly into these AI ecosystems. The goal is to secure AI-driven traffic and preserve distribution leverage through partnerships and integrations with large language model providers.
In China, Trip.com is described as building a full-stack AI layer intended to span the travel experience from inspiration and itinerary creation to booking and post-booking support. The company’s stated aim is to develop scalable AI infrastructure that improves partner efficiency, increases visibility and enables more personalized customer interactions.
MakeMyTrip is singled out for its agentic AI, Myra, which assists users from initial planning through ticket booking. Myra offers voice and text interfaces and supports non-English languages. MakeMyTrip has integrated OpenAI APIs into Myra, shifting the platform’s capability from AI-assisted search toward AI-led conversational commerce. Bank of America’s checks indicate these AI investments are contributing to cost efficiency for MakeMyTrip.
The research frames a market in transition: OTAs are embedding into emergent AI ecosystems to capture future distribution and engagement opportunities even as investors weigh the potential margin and take-rate implications of these technologies.