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Investing.com - Booking.com (NASDAQ:BKNG) stock fell after Google announced plans to develop direct booking capabilities within its AI travel planning features, potentially challenging online travel agencies’ position as intermediaries. This development could also impact other major players in the space like Airbnb (NASDAQ:ABNB), which currently trades at $117.85 with a market capitalization of $71.46 billion.According to InvestingPro data, Airbnb has experienced an 11.04% decline in price over the past year, reflecting broader pressures on the online travel sector. InvestingPro analysis suggests Airbnb may be undervalued at current levels.
Google rolled out advanced "Canvas" AI travel planning features on Monday, initially available for U.S. desktop users who have opted into AI Mode. The new tools build on Google’s existing AI Overviews by integrating pricing and availability content from the company’s Hotel and Flight Search services. This move comes as online travel agencies like Airbnb maintain impressive gross profit margins - InvestingPro data shows Airbnb boasts a remarkable 83.04% gross profit margin with annual revenue of $11.94 billion.
The search giant teased future direct booking of hotels and flights within Google AI Mode via partners, noting it is working with Booking.com, Expedia (NASDAQ:EXPE), Marriott (NASDAQ:MAR), IHG (NYSE:IHG), and Choice Hotels (NYSE:CH) to develop the hotel and flights interface. This marks Google’s second attempt at direct booking after shutting down its previous "Book on Google" effort in 2022 after seven years. While Airbnb isn’t mentioned among Google’s partners, the company holds more cash than debt on its balance sheet, positioning it well to navigate potential disruptions in the travel booking landscape.
Google committed to working with partners large and small on direct booking, though it remains unclear if all mentioned partners have agreed to facilitate direct booking on the platform. The company’s current AI Mode already enables direct reservations for restaurants through services like OpenTable.
While the announcement created uncertainty in the travel distribution landscape, analysts note that widespread adoption by hotel suppliers would likely take many years, and online travel agencies are expected to remain leaders for booking independent hotels, inns, and vacation homes.
In other recent news, Airbnb reported its third-quarter 2025 earnings, revealing 133.6 million Nights and Experiences Booked, marking a 9% year-over-year increase. This result surpassed both analyst consensus of 131.8 million and DA Davidson’s estimate of 131.9 million. Gross bookings also increased by 14%, exceeding consensus estimates by 3.5%, while the company maintained profit margins above 50%. Analysts have responded with varied ratings: DA Davidson reiterated a Buy rating with a $155 target, while Citizens maintained a Market Perform rating, noting potential growth catalysts like AI integration and expansion into boutique hotels. Bernstein maintained an Outperform rating and a $165 price target, recognizing Airbnb’s strong growth in the business-to-consumer space. UBS raised its price target to $147, citing innovation such as the "Reserve Now, Pay Later" feature as a contributing factor. Mizuho also increased its price target to $156, highlighting the potential growth from Airbnb’s hotel segment in the coming years. These developments reflect a mix of optimism and cautious outlooks from analysts regarding Airbnb’s future performance.
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