TL;DR: Google just unveiled an AI-powered travel planning suite that triggered an immediate drop in Expedia and Booking's stock prices. This isn't a feature update; it's a structural attack on the entire Online Travel Agency (OTA) model. By leveraging its massive ecosystem (Maps, Flights, Search) and Gemini AI, Google is building a closed loop from inspiration to booking, effectively cutting off the OTAs' primary traffic source. This signals the end of the "search engine as a gateway" era and the rise of the "AI-powered destination," forcing every intermediary to rethink their survival strategy.
I am James, CEO of Mercury Technology Solutions. Hong Kong
Yesterday, Google released a suite of AI travel planning tools. Many of you likely saw the headlines, and more importantly, the immediate red candles on the stock charts of Expedia (EXPE) and Booking Holdings (BKNG).
The market's reaction was not panic; it was a rational pricing-in of a new reality. Google isn't just updating a feature; they are launching a structural attack on the online travel industry.
For two decades, Google played the role of the "Gateway." We searched for travel, clicked a link, and transacted on Booking.com. Google took the ad revenue; the OTA took the commission. It was a profitable truce.
That truce is over.
Google has decided to close the loop. Using its Gemini model, the new "AI Mode," and the interactive "Canvas," it aims to keep the user within the Google ecosystem from the first spark of inspiration to the final credit card swipe.
In plain English: Google is severing the traffic artery that feeds the OTAs and intends to consume the commission revenue for itself.
The Weapon: A Three-Pronged AI Assault
This isn't a single tool. It's a coordinated system designed to replace the traditional booking journey.
1. From "Search" to "Conversation" (The AI Mode)
The days of opening twenty tabs to plan a trip are ending. Instead of keywords ("Okinawa hotels"), you now give the AI a complex brief: "Plan a 5-day family trip to Okinawa with historical sites and local food recommendations."
The AI doesn't just search; it understands intent. It generates a complete, logical itinerary draft.
2. From "Link List" to "Visual Dashboard" (Canvas)
This is the game-changer. Instead of a list of blue links (which send you to an OTA), Google presents a dynamic, interactive dashboard called Canvas.
- It pulls photos and reviews directly from Google Maps.
- It shows real-time pricing from Google Flights and Hotels.
- It calculates travel times between your chosen spots automatically.
Crucially, this happens inside Google. It solves the fragmentation problem that OTAs have thrived on solving, but it does it better, faster, and without leaving the search page.
3. From "Manual Booking" to "AI Agent" (The Closer)
This is the existential threat. Google is rolling out agentic capabilities. You tell the AI, "Book a table for 4 at 7 PM," and it executes the task across platforms.
Google has explicitly stated that flights and hotels are next. Once the AI can finalize the transaction, the OTA is no longer a necessary destination; it becomes, at best, a back-end API.
The Unfair Advantage: Why Only Google Can Do This
Why can't Expedia or a startup replicate this? The answer lies in infrastructure and ecosystem integration.
When you ask that complex question about Okinawa, Google's system breaks it down into hundreds of sub-queries ("Find historical sites," "Check hotel availability near sites," "Compare food reviews"). These queries are instantly processed by Google's massive, proprietary databases: Search, Knowledge Graph, Maps, Flights, and Shopping.
No other company possesses this full stack of data.
- Maps: The world's most comprehensive location database.
- Flights: Real-time global inventory.
- Personal Data: Your calendar and past trips (if authorized).
- Shopping: A massive transaction database.
Google is bringing a nuclear weapon to a knife fight. They have the map, the inventory, the reviews, and the user's intent all in one place.
The Threat Analysis: Why OTAs Are Bleeding
The panic at Expedia and Booking is justified because this strikes at the core of their business model: arbitrage. OTAs exist to sit between the user and the service provider. They spend billions on Google Ads to acquire that user.
Now, their biggest ad partner has become their biggest competitor.
- Traffic Interception: Google is capturing the user before they click the link. The "Canvas" answers the query so thoroughly that there is no need to visit the OTA.
- Revenue Extraction: By handling the booking via AI agents, Google can bypass the OTA entirely or force them into a low-margin "supplier" role, extracting the commission for itself.
- Data Supremacy: Google now sees the entire journey, from the first thought to the final booking. This data advantage allows for hyper-personalized targeting that OTAs cannot match.
With 90% of the global search market, Google is the internet's front door. When the doorman decides to open his own hotel in the lobby, the hotel down the street is in trouble.
The Strategic Pivot: Can OTAs Survive?
Does this mean immediate bankruptcy for OTAs? No. But it forces a painful, immediate transformation. They still have two moats:
- Supply Chain Depth: Deep, direct relationships and negotiated rates with hotels that Google's scraper can't easily replicate.
- Service Complexity: Handling cancellations, re-bookings, and disasters is messy human work that AI is not yet ready to manage fully.
We are seeing two distinct survival strategies emerge:
- Expedia (The Collaborator): "If you can't beat them, join them." Integrating deeply into AI platforms to ensure they remain the backend engine for bookings.
- Booking (The Competitor): "Fight fire with fire." Investing heavily in their own proprietary AI to offer a specialized, deeply serviceable experience that a generalist search engine can't match.
Conclusion: The Era of the "Generalist Intermediary" is Over
Google's move is a signal to every industry, not just travel. If your business model relies on being a "gateway" to information or a simple middleman for transactions, you are on the menu.
The future belongs to those who own the proprietary supply, the deep service infrastructure, or the primary user relationship. The middle is disappearing.
The battle is no longer for traffic; it is for the AI experience. And right now, Google has the data, the model, and the interface to win.
Mercury Technology Solutions: Accelerate Digitality.
