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Thomas Reiner, partner of Altimeter Capital, believes that online travel agencies and metasearch engines are in trouble with the future of AI-generated search.
It’s still early, but glimpses at the rapidly advancing tech are showing a clearer picture of how it will look.
“I think it’s already happening,” he said during the Skift Megatrends event on Tuesday.
“You’re going to see a complete disruption of what the search paradigm is today in discovering travel.”
Reiner believes hotels, airlines, cruise lines, and car rental agencies will be able to get more direct bookings as travel search changes — and that means OTAs and other intermediaries will lose commissions.
“That’s the best case scenario for the OTAs. But even worse, if you’re a metasearch company, if you’re Trivago, I don’t know what you do. I think you just remember the good times,” he said.
Future of Digital Assistants
Reiner believes that AI assistants will be the main way people book travel and more.
Right now, Google largely delivers the same results for every person. With better personalization that he believes will come with future AI models, individual searches will generate different results based on different preferences.
“Everyone will have a personal assistant in their pocket that can do everything for them. And so whether that’s booking a hotel, a flight, calling an Uber or Waymo or a Tesla FSD RoboTaxi — it’ll be able to do all that for you. It’ll have memory of who you are, what your preferences are, and it’ll just be easy. All I know is that we are quickly marching towards a world where things are easier for people, rather than having to spend a bunch of time discovering information.”
Here’s how he expects a search to go:
“I want a luxury hotel. I want it to have a kids club near the beach, within an hour of an airport that has a one stop connection from SFO. And in three minutes, the exact same thing that I spent 20 hours trying to find and narrow down was the number one choice.”
The End of SEO?
It’s uncertain exactly what suppliers will need to do to show up in AI-generated search results. But changes are coming, and traditional search engine optimization (SEO) will be a thing of the past. He believes that quality content will be most important because that will lead to better matches with consumers.
“The reality is that SEO has been dying a long death, and that’ll be accelerated by Google increasingly focused on monetizing what traffic they do have.”
“Google, as the incumbent, has an interest in maintaining that market share of dollars in the ecosystem because they make so much money from the OTAs.”
“If you look from the Google perspective, there’s the reality that as you move towards more AI bubbles at the top, you have to make up for that revenue loss as the incumbent by adding more ads. It used to be three or four sponsored listings for your hotel, and now it’s going to be the entire first page, and so any SEO will be on the second page or the third page. And so it’s just incredibly hard to compete for that free traffic, and you’re going to have to pay for it.”
