BofA: MakeMyTrip leads India OTA AI push as global peers race to embed technology.

Investing.com -- Online travel agencies globally are accelerating artificial intelligence investments to enhance customer travel experiences, according to Bank of America industry checks across the US, China and India, though investor concerns about AI's impact have weighed on stock valuations.

Year-to-date stock performance shows all major OTAs have de-rated primarily on AI-related concerns, with Booking and Expedia declining despite earnings upgrades. MakeMyTrip saw the highest multiple de-rating at 35%. OTAs now trade at 13 times CY27e price-to-earnings ratio. MakeMyTrip still trades at a premium to global peers, though the premium has normalized.

Investor concerns center on three areas: disruption of the discovery funnel, compression of take rates, and hyper-personalization costs compressing margins. Bank of America finds most OTA incumbents well positioned as fulfillment remains with them, proprietary data allows seasoned OTAs to add value, and most consumers especially in Asia need assistance during travel.

In the US, agentic AI capable of planning and booking trips end-to-end is emerging as the top structural trend, with Google and OpenAI becoming major ecosystem gatekeepers. OTAs are embedding themselves directly into these AI ecosystems to obtain AI-driven traffic and maintain distribution leverage through tie-ups with large language models.

In China, Trip.com is building a full-stack AI layer to enhance travel experience from inspiration and itinerary building to booking and post-booking support. The company aims to build scalable AI infrastructure to enhance partner efficiency, improve visibility and deliver personalized experiences.

MakeMyTrip's agentic AI Myra can assist consumers from trip planning through booking tickets. The platform features voice and text interfaces and supports non-English languages. MakeMyTrip integrated OpenAI APIs into Myra, shifting from AI-assisted search to AI-led conversational commerce. AI is helping MakeMyTrip become more cost efficient, Bank of America said.