Booking Holdings CEO: AI Overviews Are Squeezing SEO

The friction between Google and the world’s largest travel companies is not a new phenomenon, but the integration of generative AI adds a complex layer to a decades-old rivalry. For years, companies like Booking.com, Expedia, and TripAdvisor have navigated the dual nature of Google as both their most vital partner and their most formidable competitor. Booking Holdings spends billions of dollars annually on Google’s paid search auctions, effectively funding a significant portion of Google’s advertising revenue. However, the "free" traffic generated through organic search results has long been a key component of margin health. Fogel told analysts that while he does not like "losing SEO," the company’s strategic focus on direct traffic has provided a necessary buffer. According to Fogel, Booking’s direct traffic—the percentage of users who come to the platform without clicking an ad or a search link—remains robust in the mid-60% range, a figure that has not wavered despite the volatility in search engine dynamics.

To understand the gravity of Fogel’s comments, one must look at the mechanics of Google’s AI Overviews. These summaries utilize large language models (LLMs) to aggregate information from across the web, presenting a synthesized answer at the very top of the search results page. In the context of travel, a user searching for "best hotels in Florence for a family of four" might now see an AI-generated paragraph recommending neighborhoods and specific properties, complete with synthesized reviews and pricing, before they ever see a link to Booking.com or Expedia. This "zero-click" search environment threatens the visibility of OTAs, as the AI essentially acts as a concierge, potentially satisfying the user’s query without requiring them to visit a third-party site for research. For a company like Booking, which relies on being the primary destination for travel intent, being pushed "below the fold" by an AI summary is a direct challenge to its top-of-funnel strategy.

Fogel’s remarks regarding the pressure on SEO are particularly significant given Booking Holdings’ massive marketing budget. In 2023, the company spent roughly $6.8 billion on marketing, a vast majority of which was directed toward performance marketing channels like Google Search. When Google modifies its layout to prioritize its own AI tools, the ROI on organic efforts diminishes, forcing companies to either accept lower traffic volumes or increase their spend in the paid auction to maintain visibility. Fogel’s admission suggests that even the most sophisticated SEO operations in the world are struggling to maintain their footing as Google prioritizes generative summaries over traditional indexing. This shift is part of a broader evolution where Google is transforming from a "search engine" that points to websites into an "answer engine" that provides information directly.

However, Booking Holdings is not standing still in the face of this technological disruption. The company has been aggressively pursuing its "Connected Trip" vision, an integrated ecosystem where flights, hotels, ground transportation, and attractions are all managed within a single interface. By creating a more frictionless experience, Booking aims to increase customer loyalty and drive users directly to its mobile app, bypassing Google altogether. The fact that direct traffic remains in the mid-60% range is a testament to the success of the Booking.com app and the "Genius" loyalty program. Fogel has repeatedly emphasized that the ultimate defense against Google’s dominance is a brand so strong and an experience so useful that consumers do not start their journey on a search engine at all.

The broader travel industry is watching Booking’s experience with Google’s AI with intense scrutiny. Analysts have pointed out that while large players like Booking and Expedia have the capital to pivot, smaller travel sites and niche blogs may be devastated by the loss of organic visibility. The "Skift Take" on this development suggests that no travel business has yet found a "silver bullet" for maintaining prominence within LLMs. Unlike traditional SEO, which relies on keywords, backlinks, and site speed, showing up in an AI summary—a practice some are calling Generative Engine Optimization (SEO)—is a moving target. The algorithms that determine which sources an LLM cites or synthesizes are opaque and fluctuate frequently, making it difficult for marketing teams to build a consistent strategy.

Furthermore, the rise of AI Overviews coincides with increased regulatory pressure on Google, particularly in the European Union under the Digital Markets Act (DMA). The DMA aims to prevent "self-preferencing," where a platform like Google prioritizes its own services (like Google Hotels or Google Flights) over competitors. While AI Overviews are presented as a tool for user convenience, critics argue they represent a new form of self-preferencing by keeping users within the Google ecosystem longer. Fogel’s comments about the pressure on SEO could potentially serve as anecdotal evidence for regulators looking at how Google’s UI changes affect the competitive landscape of the travel industry.

From a financial perspective, the second quarter for Booking Holdings showed a mix of resilience and caution. While the company saw pressure on the organic side, its overall business remains a powerhouse of profitability. The challenge lies in the transition period. If Google’s AI tools become the primary way people plan travel, Booking must ensure its data is what powers those summaries, or it must find a way to make its own AI—the "Booking.com AI Trip Planner"—more attractive than Google’s. Booking has already integrated ChatGPT-based technology into its own platform, allowing users to converse with an AI to narrow down travel options. This creates a secondary battleground: it is no longer just about who has the best search results, but who has the most helpful AI assistant.

Expert perspectives on the matter suggest that the "blue link" era of the internet is rapidly sunsetting. Industry analysts at firms like Bernstein and Morgan Stanley have noted that while the transition to AI search might be painful for SEO-heavy businesses, it could ultimately favor those with the largest first-party datasets. Booking Holdings possesses an enormous wealth of proprietary data regarding traveler behavior, hotel availability, and pricing trends. If the company can successfully leverage this data to feed into LLMs or to power its own proprietary AI, it may emerge from the AI transition stronger than before. The risk, however, remains that Google, as the "gatekeeper" of the internet for the vast majority of Western users, can change the rules of the game at any moment.

In the short term, the "pressure" Fogel mentioned is likely to manifest as a slight increase in customer acquisition costs (CAC). If organic traffic drops, the company may need to bid more aggressively on "brand keywords" to ensure that when a user searches for "Booking.com," they don’t get diverted by a Google AI summary or a competitor’s ad. This creates a "vicious cycle" where OTAs are forced to pay Google more money to recover the traffic that Google’s own UI changes have suppressed. This dynamic has been a point of contention for years, leading to previous public outbursts from travel executives, though Fogel’s tone on Tuesday remained measured and analytical.

As the third quarter progresses, the industry will be looking for signs of whether Google’s AI Overviews are being dialed back or expanded. Google has already made adjustments to the frequency of AI summaries following high-profile errors and user feedback, but the long-term trajectory toward generative search appears inevitable. For Booking Holdings, the path forward involves a double-down on the mobile app and the expansion of the Connected Trip. By integrating AI into their own vertical search experience, they hope to provide a level of specialization and transactional ease that a general-purpose AI like Google’s Gemini cannot match.

In conclusion, Glenn Fogel’s admission that Google’s AI Overviews are pressuring SEO results is a landmark moment in the ongoing evolution of the travel search ecosystem. It serves as a formal acknowledgment that the rules of digital discovery are changing. While Booking Holdings is better positioned than most to weather this storm—thanks to its massive direct traffic and multi-billion dollar marketing war chest—the shift signals a challenging era for any business that relies on the "free" internet. As AI becomes the new interface for travel planning, the battle for the consumer’s attention will move away from the search results page and into the realm of integrated, AI-driven experiences where brand loyalty and data ownership are the only true currencies. Booking’s ability to maintain its mid-60% direct traffic figure will be the most critical metric to watch in the coming years as the company attempts to decouple its destiny from the whims of Google’s algorithmic shifts.