Investing.com — Booking Holdings (NASDAQ: BKNG) remains one of the strongest players in online travel, but artificial intelligence could eventually challenge some of the company’s competitive advantages, according to a report from Bernstein.
The analysts maintained their Market-Perform rating and $188 price target on the stock.
The report highlighted Booking’s ability to consistently grow room nights faster than both the broader travel market and major competitors over the past two decades. Growth accelerated after the acquisitions of Booking.nl and Agoda, which expanded the company’s footprint across Europe and Asia.
A key factor behind that success was the company’s ability to build one of the largest hotel inventories in the industry, particularly among independent properties. That scale later became an important advantage as travelers increasingly began searching for accommodation through Google.
Strong brand recognition and extensive hotel coverage helped Booking secure prominent placement in travel-related search results. Higher conversion rates further reinforced its position and created a self-reinforcing growth cycle.
Over time, many hotels became increasingly dependent on the platform as a source of customer demand. This allowed the company to strengthen relationships with suppliers and secure favorable inventory access and booking arrangements.
Looking ahead, analysts see artificial intelligence as the most significant potential disruptor to the online travel industry.
AI-powered search tools could change how travelers discover and compare accommodation options. In that environment, pricing, flexibility and the quality of travel information may become more important competitive factors than scale alone.
Despite that risk, Booking still benefits from a broad inventory network, strong consumer trust and a global presence that would be difficult for rivals to replicate quickly.
The report concluded that the company’s valuation remains attractive, although the potential impact of AI on travel search warrants a balanced investment view.
“We rate Booking Market-Perform, balancing a view on AI risk with a discounted valuation,” the analysts said.
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