Home / Business and Economy / AI Transforms Travel: Morgan Stanley Upgrades Booking, Airbnb
AI Transforms Travel: Morgan Stanley Upgrades Booking, Airbnb
16 Sep
Summary
- Morgan Stanley initiated coverage on Booking, Airbnb, and Expedia.
- AI is viewed as a new acquisition channel and product opportunity.
- Online travel bookings are expected to grow 7% annually by 2030.
Morgan Stanley has initiated coverage on key online travel agencies (OTAs), rating Booking Holdings 'Overweight', Airbnb 'Equal-weight', and Expedia 'Underweight'. The bank's analysts, led by Matthew Cost, see artificial intelligence not as a threat, but as a significant new acquisition channel and product opportunity for OTAs. This AI integration is expected to function as a new search layer driving valuable traffic to booking platforms, with travel-specific AI agents potentially improving discovery and personalization.
Price targets were set at $230 for Booking Holdings and $170 for Airbnb. Analysts highlighted Booking's extensive unique properties and direct booking strength, and Airbnb's leading direct traffic mix and product execution. Expedia was moved to 'Underweight' due to a narrowed valuation discount and less differentiated assets compared to peers.
The firm's optimistic outlook is supported by sustained growth in travel spending and online penetration. Services have increased their share of U.S. consumer spending, and global leisure travel continues its online shift, with an estimated $700 billion in bookings still offline. Morgan Stanley forecasts online travel bookings to achieve a compound annual growth rate of approximately 7% between 2026 and 2030.
