On news that a very well-capitalized and famous rival is substantially expanding its travel offerings, Booking Holdings (BKNG 4.83%) stock took a hit on Monday. The online travel agency's (OTA) share price dropped by nearly 5% during that trading session, which was a notably more pronounced decline than the 0.9% slide of the benchmark S&P 500 index.
A competitor gets more competitive
That rival is no less an enterprise than Alphabet's Google. The tech behemoth announced that day it's enhancing its travel research and booking services.
Image source: Getty Images.
Google announced in its official company blog that Flight Deals, an artificial intelligence (AI)-enhanced search feature it's testing within Google Flights, is now available to users worldwide (previously, it was accessible only in the U.S., Canada, and India). Since bargain-hunting is one of the primary drivers of traffic to OTA sites, the competitive threat to Booking and other incumbents is clear.
Additionally, Google wrote, it has introduced travel planning capabilities within its Canvas AI tools. Using the service, the company said, a person can build a travel itinerary custom-tailored to his or her needs and desires for a trip.
NASDAQ: BKNG
Key Data Points
The direct approach
Furthermore, Google has pledged that its AI Mode will be able to directly book flights and accommodations, eliminating the need for extra steps to switch between different websites for trip arrangements.
Booking and other top OTAs are leaders in their industry, while Google Flights (and Alphabet's other travel offerings) aren't as well-known. If the global rollout of Flight Deals and the enriched power of Google Flights catch fire with travelers, however, those companies could very well lose market share. Hopefully for their investors, they're coming up with innovative ways to compete as we speak.
