Dive Brief:
- Online travel company Booking Holdings has cut customer service costs by about 10% per reservation by leveraging generative artificial intelligence as an automation tool, CFO Ewout Steenbergen said Wednesday, according to a transcript of the company’s fourth quarter earnings call.
- The company’s customer service costs are down even as bookings are up by roughly 10%, Steenbergen said during the call.
- “We're encouraged by the tangible results we're seeing from our accelerated integration of generative AI within our customer service operations,” he said. “It's remarkable to see a year-over-year decrease in customer service costs even as we delivered double-digit growth on gross bookings and revenue.”
Dive Insight:
The news comes as major companies in the technology space and elsewhere are under growing pressure to show how their massive investments in AI are paying off.
Only 12% of CEOs say AI has delivered both cost and revenue benefits, according to survey results released in January by PwC. Overall, 33% of respondents reported gains in either cost or revenue, while 56% said they had so far seen no significant financial benefit.
Still, AI adoption is expected to rise this year as business leaders look to avoid falling behind competitors while also making smart investments.
On average, organizations globally expect to allocate 5% of their annual budget to AI initiatives in 2026, up from 3% in 2025, Paris-based technology consulting firm Capgemini said in a report last month.
“As AI moves from experimentation to enterprise-scale deployment, organizations face a new challenge: translating rapid advances in AI capabilities into sustained business impact,” the report said. Over the next 12 months, organizations plan to accelerate investments in infrastructure, data, governance and workforce upskilling, with the goal of laying a strong foundation for “sustainable AI adoption,” according to the research.
Booking, for its part, is focused on deploying the technology where it can “deliver tangible, measurable outcomes for our customers, partners and our business by continuing to improve our existing products and continuously testing so we can learn quickly and help shape what's next in travel,” CEO Glenn Fogel said during the Wednesday call.
“It's an extraordinary time to be in the travel industry with generative AI accelerating the pace of innovation and evolving how we deliver our mission, which is to make it easier for everyone to experience the world,” he said.
The company reported a 10% increase in adjusted fixed operating expenses, “driven by adverse FX changes, an indirect tax matter, and higher cloud computing costs,” according to its earnings release.
Meanwhile, competitor Expedia is working with major online platforms to ensure its brands “show up prominently in gen AI searches and function effectively with agentic browsers,” CEO Ariane Gorin said during an earnings call last week.
“We're experimenting aggressively,” she said.
