A court says the fix cannot be bought

The European Union's General Court told Booking Holdings on September 9 that it is too dominant in hotel bookings to own the flight business it wanted. Sitting in an extended formation of five judges, the court dismissed Booking's action in its entirety and upheld the European Commission's prohibition of its €1.63bn ($1.9bn) acquisition of eTraveli, endorsing a "reverse leveraging" theory of harm: a company already dominant in online hotel agency in Europe would entrench that position by owning the continent's leading online flight seller. Booking — Booking.com, Agoda, Priceline, KAYAK and the restaurant platform OpenTable — can still appeal to the Court of Justice.

The stake outlives the deal. Booking's declared answer to the fear that AI assistants will stand between it and travelers is the Connected Trip: own the flight, the car and the attraction around the room night so the customer comes back directly instead of being rented from Google every time. Flights are its weakest leg — flight tickets grew 4% in the June quarter as airlines cut capacity and Middle East conflict pressed on fares. "We're still very pleased with the growth of our Connected Trip, that low double-digit number, the percentage of our total transactions in the low double digits," chief executive Glenn Fogel told investors on August 4. eTraveli was the shortcut, and it is now closed.

Expedia is running the same play with permission

Expedia Group — Brand Expedia, Hotels.com, Vrbo, the white-label supply arm Expedia Partner Solutions and the metasearch site trivago — is worth about a quarter of Booking's $134.4bn and carries no dominance finding. It has spent the year buying what Booking was forbidden: the attractions platform Tiqets, the conversational planning app Layla, and a May 20 agreement to acquire CarTrawler, an Irish platform linking more than 550 car-rental suppliers to over 300 travel brands including more than 70 airlines, due to close in the second half. "In July, we became the first OTA to distribute Allegiant flights and achieve full coverage of U.S. commercial airlines," chief executive Ariane Gorin said on August 5.

The income statements diverge as sharply as the permissions. Expedia's June quarter brought gross bookings of $33.9bn, up 12%, with the business-to-business arm up 21% in its twentieth consecutive double-digit quarter; revenue rose 14%, a fourth straight acceleration, and operating margin reached 23.9% against 14.0% a year earlier. Consumer marketing spending rose 1% while consumer bookings rose 8%. "We are also raising our margin guidance for the full year," chief financial officer Derek Andersen said on the same call.

Booking went the other way. Reported revenue growth halved to 8.1% from 16.2% in the March quarter; room nights grew 5% against gross bookings of 9%, so the extra dollars came from price and mix rather than travelers; marketing rose 11% to $2,371m, 4.7% of gross bookings against 4.6% a year earlier. Adjusted earnings per share grew 15% against adjusted EBITDA of 9%, the difference supplied by a diluted share count 5.5% smaller. Third-quarter room nights are guided to 3–5%.

What the AI story does not cover

The disintermediation everyone is pricing is barely visible in the data the companies disclose. Large-language-model referrals, paid and unpaid, are under 1% of Booking's room nights and have not moved much. Google's agentic hotel tool went live in AI Mode on August 27 with Booking.com, Expedia and Hotels.com among the launch partners, and the agencies remain merchant of record, so the commission survived the first cut. Expedia told investors organic search has stabilized.

Booking closed at $173.43 on September 9, down 3.81%, against a 0.74% fall in the S&P 500 tracker and declines of about a point at Marriott and Hilton; Expedia slipped 0.71%. Since August 24 Booking is down 18.7% and Expedia 19.6%, most of it in a single broad travel-services sell-off on September 8.

Booking now trades at 16.59x forward earnings against 19.13x trailing — and against 18.5x three sessions earlier — on consensus 2026 earnings of $10.45 a share that has not been cut, with a free-cash-flow yield of 7.10%. Book equity is negative after years of debt-funded buybacks, so price-to-book says nothing. Expedia sits at 13.06x forward against 16.34x trailing, on 2026 consensus earnings of $20.88 that has risen since mid-July, when Barron's cited $19.77.

Booking earns much of its de-rating: growth halved, it paid more for traffic than the traffic delivered, and the court has removed the acquisitive route to fixing the one leg — flights — that the strategy needs. Expedia's fall is a different animal. Its growth accelerated, its margin guidance went up, and estimates rose while the shares fell nearly a fifth; nothing company-specific has been discoverable to explain it, and the likelier reading is that the market is selling the category rather than the company.

Booking can appeal to Luxembourg, or build the flight leg itself, one airline contract at a time, against a rival that expects to own 550 car suppliers before the year is out.