Expedia Sees Fast-Growing Traffic From Chatbots

Expedia Group is embedding artificial intelligence (AI) across its business, using the technology to sharpen personalized travel recommendations, improve customer service and boost operational efficiency.

“We’re using AI everywhere,” CEO Ariane Gorin said during the company’s second-quarter earnings call with analysts. “It touches every function across our company, and all our employees have AI goals.”

AI is helping the company deliver more value for travelers, Gorin said, noting that Expedia’s insurance products now offer tailored coverage. She also noted that AI-powered customer service is contributing to “record high net promoter scores while helping us reduce costs.”

In the second quarter, Expedia introduced AI-powered filtering of results to speed up the search process and launched new tools that help business partners promote its inventory more effectively. Expedia’s flagship consumer brands are Expedia, Hotels.com and Vrbo.

Expedia also said it is exploring the use of agentic AI to do things like add inventory and resolve customer issues more efficiently. But it’s early days.

“Despite all of the technology we have in (the industry) … a distributor like us has to do a lot of back and forth with the customer. So I think it’s exciting to see what agentic AI will allow in that area,” Gorin said.

The company plans to roll out additional B2B application programming interfaces (APIs) this year. These APIs enable any business to embed travel booking tools onto their website or app and get access to Expedia’s inventory of hotel rooms.

Gorin said the company is also working with OpenAI, Google, Microsoft and Meta to make sure its brands appear in AI chatbot search.

“Traffic from Gen AI searches is small but growing fast,” she said, “and it’s converting into bookings at higher rates than other traffic.”

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In the second quarter, gross bookings in the company’s B2B business jumped 17% to $8.8 billion, led by growth in Asia and Europe. Revenue from advertising rose 19%, and international revenue overall grew 13%. Gorin said the company is seeing momentum in Japan, Brazil and Northern Europe, with consumer bookings outside the U.S. up by high single digits.

Meanwhile, B2C gross bookings rose 1%. Performance in the U.S. was mixed.

“Consumers at the higher end of the market remain resilient, with those at the lower end are taking a more cautious approach to discretionary spending,” Gorin said.

The company also saw weakness in foreign travel to the U.S., shorter booking windows and higher cancellation rates.

Hotels.com — which was the most disrupted brand due to platform migrations, loyalty program changes and other factors — showed improvement after its April relaunch.

“We’re seeing brand awareness and direct traffic move in the right direction,” Gorin said, adding that the brand has introduced new features such as price alerts and insights.

Vacation rental platform Vrbo grew room nights roughly in line with the U.S. market, but saw a “softer environment with lower daily rates, shorter length of stay and higher cancellations,” Gorin said.

According to a recent Bank of America research note shared with PYMNTS, around 67% of Expedia’s bookings are made by travelers in the U.S. The analysts said U.S. travel showed weakness in Q2 but improved in July.

For the second quarter, Expedia reported net income of $330 million, or $2.48 per share, compared with $386 million, or $2.80 per share, in the quarter a year ago. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 16% to $908 million.

Revenue came to $3.79 billion, up from $3.56 billion a year ago.

The travel conglomerate missed the consensus earnings estimate of $4.13 per share but beat on the top line. Analysts were expecting revenue of $3.71 billion, according to S&P Global Market Intelligence.

Expedia also raised its outlook for the year: It now expects revenue to increase between 3% to 5%, up from 2% to 4%. Gross bookings for 2025 reflect the same guidance: now 3% to 5%, up from 2% to 4%.

Shares of Expedia rose 1.3% to $187.61 in after-hours trading.

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