Dive Brief:
- Online travel company Booking Holdings has cut customer service costs by about 10% per reservation by leveraging generative AI as an automation tool, CFO Ewout Steenbergen said last week, 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 spending is expected to rise this year as many business leaders look to scale projects with a focus on smarter investments and bigger returns.
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. In the coming year, 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 call last week.
“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.
Norwalk, Connecticut-based Booking provides online travel services globally through brands such as Booking.com and Priceline.
The business posted $6.3 billion in total revenue during the fourth quarter, an increase of 16% year over year, according to its earnings release. Total operating expenses rose 15% to $4.3 billion during the quarter compared with the year-earlier period.
The company reported a 10% increase in adjusted fixed operating expenses, “driven by adverse FX [foreign exchange] changes, an indirect tax matter, and higher cloud computing costs.”
Booking’s annual operational spending accelerated during the post‑Covid‑19 travel boom but has since slowed. After jumping more than 40% from $8.5 billion in 2021 to $12 billion in 2022, the company’s annual operating expense growth dropped to about 4% in 2024 and roughly 12% in 2025.
In November 2024, Booking announced a transformation program aimed at realizing as much as $450 million in savings from job cuts and other cost-reduction measures by the end of 2027 while reinvesting some of the freed-up capital into AI projects and other initiatives.
Steenbergen told CFO Dive last year that customer service can be performed “much better” through AI.
“You don’t need to wait in a long line, and it can find information much quicker,” he said.
The executive said Booking was also exploring automation opportunities in finance, such as using generative AI to more quickly analyze competitors’ earnings calls and disclosures.
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 earlier in the month.
“We're experimenting aggressively,” she said.
