Truist Assesses Potential Impact of Meta Muse AI Agent on Online Travel Agencies

Meta Platforms’ (NASDAQ:META) newly launched Muse artificial intelligence agent has increased investor attention on online travel agencies because of the application’s ability to book travel, according to analysts at Truist.

The brokerage said previously launched large language models appeared to have had a limited effect on online travel agencies’ share of bookings. However, Truist said Meta’s entry into the market could present greater downside risks for OTAs because of the company’s consumer reach, scale and data resources, alongside the initial download momentum for Muse reported by CNBC.

Truist cautioned that the eventual impact of Muse and other AI agents on OTA booking share, commission rates and relationships with travel suppliers remains highly uncertain.

Truist Expects AI Agent Attention to Affect Investor Sentiment

The analysts said media coverage and widespread consumer testing of AI agents could influence investor sentiment towards online travel companies before sufficient data becomes available to establish any financial impact.

The longer-term implications will depend partly on whether consumers increasingly use AI agents to search for and complete travel bookings and how those platforms interact with existing travel agencies and suppliers.

Truist said uncertainty also remains over the potential effects on the commissions collected by OTAs and their competitive positioning with hotels, airlines and other travel providers.

The brokerage’s comments focus on the potential risks presented by emerging AI platforms rather than an established shift in booking volumes.

Expedia Seen as More Exposed to North American Launch

Truist expressed particular caution regarding Expedia Group (NASDAQ:EXPE), citing the geographic profile of Muse’s initial rollout.

Muse is initially launching in North America, while approximately two-thirds of Expedia’s business-to-consumer operations in the region are based in the U.S., according to the analysts.

By comparison, Truist said U.S. bookers account for a percentage in the low teens of Booking Holdings’ (NASDAQ:BKNG) total customer mix.

The analysts therefore identified Expedia’s greater U.S. exposure as a factor to monitor as Muse becomes available to consumers.

U.S. Travel Market Has Established Loyalty and Direct Booking Channels

Truist also pointed to existing characteristics of the U.S. travel market that could influence adoption of new AI-based booking channels.

The brokerage noted that U.S. travellers demonstrate significant brand loyalty, with most U.S. hotels affiliated with major chains.

Direct booking rates can reach between 70% and 80% in some cases, according to Truist, while hotel and airline brands have established loyalty programmes supported by credit card partnerships.

Online travel agencies also operate their own loyalty programmes and partnerships, adding another factor to the competitive environment for emerging AI travel services.

These established relationships could affect how consumers use AI agents alongside existing direct and third-party booking channels.

Expedia Announces Participation in Muse

Truist said communication from online travel agencies about their involvement with emerging AI platforms could be relevant to near-term investor sentiment.

Expedia’s chief executive was asked at the Skift Global Forum last week about working with Muse but did not provide specific details, according to the supplied information.

Expedia subsequently announced through a social media post last Tuesday afternoon that it was joining Muse, according to FactSet.

Truist maintains a Hold rating on Expedia and a Buy rating on Meta.

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