OpenAI steps back from direct ChatGPT bookings, sending online travel agencies stocks soaring

Booking, Expedia, Travelzoo, Tripadvisor Shares Soar As OpenAI Steps Back From Direct ChatGPT Bookings - Expedia Group (NASDAQ:EXPE)

Online travel agencies saw a massive relief rally on Thursday after reports surfaced that OpenAI is scaling back its ambitions to handle direct bookings within ChatGPT. Travel Intermediaries Rally On AI Pivot The sudden pivot by the AI giant has effectively hit the pause button on investor fears that generative AI would eventually bulldoze the business models of traditional travel platforms. The Complexity Of Real-Time Data The primary catalyst for the market move was a report suggesting that keeping up with the volatile nature of travel inventory was becoming a logistical nightmare. Industry observers noted that maintaining "real-time prices and inventory inside a chatbot is messy, maybe even too much for OpenAI, at least for now." This technical hurdle -- managing millions of fluctuating hotel rates and flight seats -- proved to be a significant barrier to a seamless native checkout experience. Consequently, OpenAI has reportedly decided to focus on checkouts within specific third-party apps that plug into ChatGPT rather than competing directly as a booking engine. Easing Disintermediation Fears For months, the AI panic has battered travel and SaaS stocks, with investors worried that ChatGPT would become the primary gateway for travel planning, bypassing intermediaries. However, the decision to step back from direct transactions suggests that the specialized infrastructure of companies like Booking and Expedia remains essential. "We see the OpenAI news as incrementally positive for online travel agencies," said Bernstein analyst Richard Clarke, as per a Reuters report. "This means that Booking and Expedia can continue to get in front of consumers on AI platforms, lowering the risk of disintermediation." A Major Rebound For Travel By shifting back to a partnership model, OpenAI has reaffirmed the value of the middleman in complex global logistics. For now, the threat of an AI-driven takeover of the travel industry appears to be fading fast. Here are some stocks that felt a relief after OpenAI stepped down from its ambitions to handle processing orders. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Online travel stocks rise after report that OpenAI to scale back direct checkouts

March 5 (Reuters) - Shares of online travel agencies surged on Thursday after a report that OpenAI is scaling back plans to integrate direct bookings into ChatGPT, easing investor fears that the AI chatbots could eventually cut out travel intermediaries. Shares of Expedia were up over 12%, while Booking Holdings and Tripadvisor rose 8% and 5%, respectively. The rally followed a report by The Information that OpenAI found ChatGPT users were researching products in the chatbot but not completing purchases through it. The AI company will instead focus on checkouts within specific third-party apps that plug into ChatGPT, the report said, citing an OpenAI spokesperson. OpenAI did not respond to a Reuters request for comment. Investors and analysts have grown increasingly concerned that generative AI tools could become the dominant platform for planning and booking travel, potentially bypassing intermediaries such as online travel agencies. We see the OpenAI news as incrementally positive for online travel agencies, Bernstein analyst Richard Clarke said in a note. "This means that Booking and Expedia can continue to get in front of consumers on AI-platforms, lowering the risk of disintermediation," Clarke added. Expedia and Booking Holdings were among the first companies to integrate with ChatGPTwhen OpenAI launched its plugins programme in 2023. (Reporting by Aishwarya Jain in Bengaluru; Editing by Tasim Zahid)