Duff on Hospitality Law

Good Sunday afternoon from Seattle . . . Our weekly Online Travel Update for the week ending Friday, February 13, 2026, is below. What started out as a quiet week in the online travel industry changed considerably as the week progressed. Earnings releases from the major lodging suppliers and Expedia garnered much of the week’s headlines. Enjoy.

• • Expedia Reports Solid Fourth Quarter Results – Led Again by Its B2B Offerings. Expedia released its fourth quarter and full year results this past week. Highlights from this past week’s release include the following:
    
    • B2C bookings remained relatively stable. Partner funded promotions represented 30% of the bookings mix in 4th quarter (up from 3rd quarter). All three of Expedia’s consumer brands (Expedia, Hotels.com and VRBO) saw growth in the 4th quarter.
    • Advertising revenue continues to grow, up 19% YOY for the 4th quarter.
    • B2B continues its consistently strong growth – gross bookings grew 24% YOY in the 4th quarter. B2B partner commissions were 61.6% of B2B revenue in 2025 (up from 60.7% in 2024). B2B continues to expand its product offerings with increased accommodations supply, new car rental connections and soon, experiences via Expedia’s recently announced acquisition of Tiqets.
    • Expedia’s comments regarding AI and its adoption and use across the platform’s many verticals remained largely unchanged from its most recent earnings release statement.

A transcript of Expedia’s quarterly earnings call is attached for those of you interested.

• • Hoteliers Share Approaches to AI Use in Marketing and Distribution. This past week saw Hyatt and Marriott offer glimpses into their respective AI efforts. According to Hyatt CEO, Mark Hoplamazian, Hyatt’s efforts are most readily apparent in search, as Hyatt has added natural language search to its website and recently launched a Hyatt branded app within ChatGPT’s app ecosystem. Like Accor’s previously announced app, the Hyatt app allows ChatGPT users to search rates and availability and then re-directs those users to Hyatt.com to complete the booking. According to Hoplamazian, Hyatt’s efforts with its own website are already producing positive results. According to Marriott CEO, Anthony Capuano, Marriott is working closely with Google to integrate with Google’s AI Mode that, according to Capuano, will deliver a “priority search experience” and allow bookings to “be processed through AI Mode.” What this integration might actually mean is still somewhat unknown. How will Marriott’s search experience differ from other major travel brands? Is Google reconsidering earlier comments that it does not intend to become an online travel agent? Will bookings actually be completed within Google AI or will users instead be referred to Marriott.com to complete the booking? As for ChatGPT, Capuano announced that Marriott would be participating in ChatGPT’s early advertising pilot (see story below). These latest announcements follow disclosures by both Hilton and Marriott in recent securities filings where both companies noted for the first time the risks posed by AI and possible disintermediation caused by AI, which could make even harder direct booking efforts and drive up the cost of distribution.
  • OpenAI Begins Testing Ads within ChatGPT. Late last month, we shared OpenAI’s plans to test advertisements for users of certain versions of ChatGPT. OpenAI announced this past week that the tests have begun in the U.S. for adult, logged-in users of ChatGPT’s Free and Go subscription tiers. In last week’s announcement, OpenAI reiterated some of the guiding principles behind the new advertising product, including commitments that advertising will not affect ChatGPT’s answers to users’ prompts and users’ conversations with ChatGPT will not be shared with advertisers. According to OpenAI, it will decide which ads to show to users based on the topic of users’ conversations, users’ past conversations and users’ past interactions with ads.
  • Malaysian Competition Authorities Flag OTA Parity Provisions as Part of Digital Economy Market Review. Following its 18 month review of OTAs and other similar online travel marketplaces (including metasearch sites), the Malaysian Competition Commission reported several central competition concerns including (i) rate parity, (ii) algorithmic ranking (and the effect that higher commissions might have on ranking), (iii) keyword bidding, (iv) OTAs extensive first-party data collection practices, (v) the potentially anti-competitive use of generative AI and (vi) a variety of consumer facing tactics – drip pricing, pressure-selling and misleading reviews. Sounds like my usual OTA contracting checklist. While the review does not constitute a decision by the Commission, it does serve to identify areas where the Commission may in the future adopt guidelines or pursue further engagements with market participants.

Have a great week everyone.