Your next travel agent might just be agentic. Agentic AI is emerging as a new layer across the travel journey, helping travelers by personalizing trip planning, comparing options and prices in one place, and ultimately booking trips on their behalf.
Morgan Stanley Research believes the rise of AI agents could reshape how travel companies attract business, driving more direct bookings, reducing the cost of reaching new customers and creating new opportunities to stand out.
“These AI agents are quickly becoming capable of discovering, comparing and booking travel on behalf of consumers,” says Stephen Grambling, Morgan Stanley’s head of U.S. Gaming, Lodging & Leisure research. “This could change how traveler intent is created, routed and monetized.”
How AI Could Reshape Hotel Booking
The hotel booking journey typically involves multiple players competing to help travelers discover, compare and book their stays. These include hotel brands and owners, online travel agencies that aggregate hotel options, and search engines where hotels and travel agencies compete for prominent ad placements and keywords.
Morgan Stanley Research estimates that in 2025, hotel owners paid approximately $40 billion for distribution, including commissions to online travel agencies and other third-party booking intermediaries, and another $45 billion for branding, loyalty, marketing and other related fees.
As agentic AI changes how travelers discover and book hotels, it could influence $55 billion to $85 billion in hotel-industry spending, including fees paid to online travel agencies and marketing expenditures.
“As AI becomes one of the first places consumers turn for travel planning, it could reshape the traditional hotel booking journey," says James Koehne, an Associate in Morgan Stanley’s Equity Research division. "Agentic AI could make that process more efficient, potentially reducing distribution and marketing costs while helping hotels generate more direct bookings."
Agentic AI could change the booking process in three ways:
1. Increased personalization: AI agents can use a traveler’s stated preferences and loyalty memberships to find hotels that match their needs while accounting for benefits such as member rates, points and elite status.
2. More competition during travel discovery: AI agents could create a new way for travelers to discover and compare travel options, increasing competition to reach customers early in their trip planning.
3. Reduced reliance on online travel agencies: By sending some travelers straight to hotel websites, AI agents could help hotels reduce their dependence on higher-cost online travel agencies and lower the fees paid to intermediaries.
"Larger hotel brands could emerge as winners from agentic AI, as their loyalty programs, member rates and ability to personalize offers become increasingly important to how AI agents recommend and book hotels," says Grambling.
Online Travel Agencies Still in the Mix
Although agentic AI could drive more travelers to book directly with hotels, its impact on online travel agencies may be more balanced, with potential advantages as well.
Online travel agencies offer inventory across a wide range of hotels and brands, and that breadth could make them valuable to AI agents searching for the best match for travelers’ needs.
If AI agents become another source of travel discovery, they could also help online travel agencies generate bookings while spending less on traditional paid search. OTA loyalty programs could also influence which booking links an agent recommends.
Still, travelers may use AI agents to research and compare hotels while completing their bookings through hotel websites or online travel agencies. How much booking activity actually shifts between those channels remains uncertain.
Online travel agencies could also continue to benefit from consumers’ enjoyment of the travel planning process. Industry leaders point out that consumers often search and compare options multiple times before booking a trip. Agentic AI may not change that habit entirely, as consumers could still browse other platforms and rethink their booking even after an agent has helped plan the trip.
“People enjoy dedicating time to the trip planning process," says Matthew Cost, an analyst covering U.S. internet companies at Morgan Stanley. “That could leave room for online travel agencies to maintain meaningful direct relationships with consumers even as agentic tools improve.”
Cruise Lines: A Potential AI Winner
For an industry that accounts for just 2% to 4% of the global vacation market, cruise lines have long argued that winning over even a small share of land-based vacationers could drive outsized growth. AI agents might be the catalyst that gets more people on board.
“By expanding consumer awareness while reducing reliance on traditional distribution channels, agentic AI has the potential to make cruising more accessible, reduce customer acquisition costs and accelerate growth for the industry,” says Jamie Rollo, Head of Morgan Stanley Research’s European Travel & Leisure team.
As AI-powered travel assistants become more sophisticated, they could introduce cruising to people who might never have considered it. When a family asks an AI agent to compare vacation options, for example, the technology could suggest a cruise alongside hotel-based trips, introducing cruising as an appealing alternative they may not have otherwise considered.
That could be particularly impactful given the complexity of booking a cruise. Travelers must often navigate multiple decisions around ships and itineraries, including cabin location, dining packages and shore excursions. As a result, cruise lines have traditionally depended on travel advisors, tour operators, cruise specialists and online travel agencies to guide customers through the process.
“Agents could broaden the industry’s addressable market by recommending cruises to consumers who would otherwise choose land-based holidays,” Rollo says. “Distribution costs could be lowered as agents would perform more of the education and comparison in bookings that intermediaries currently provide.”
Return to Form
Over time, however, AI platforms could become another intermediary in the booking process. Our analysts note that if these platforms eventually charge travel companies for access, placement or bookings, some of the costs reduced by agentic AI could reappear in a different form.
