Morgan Stanley starts coverage on online travel agencies, sees AI as opportunity not threat
BKNG•Morgan Stanley initiates OTA coverage with AI seen as an opportunity
Morgan Stanley assumes coverage on online travel agencies (OTAs), including Booking Holdings BKNG.O, Airbnb ABNB.O and Expedia Group EXPE.O.
The brokerage says consumer shift towards services and experiences supports a durable travel growth premium to GDP, aided by resilient higher-income and leisure demand.
It sees AI as a new acquisition channel and product opportunity for OTAs rather than a threat, but says execution will determine the winner.
The brokerage adds that consumers are also benefiting, with early agentic tools helping them compare and select travel options.
"We expect fragmented supply to become increasingly valuable as AI enabled distribution scales, since independent hotels and alternative accommodations are materially harder for third parties to contract and service directly than chain hotels and air inventory" - brokerage
Shares of BKNG were up 1.4%, ABNB up marginally, while EXPE was down 2.3% premarket.
Year to date, ABNB is up 26.5%, EXPE up 3.6%, while BKNG is down 20%.
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