Meta's Muse hits 560,000 daily users, spurs Booking and Expedia bets

Meta's launch of Muse, a shopping agent that reached 560,000 daily active users within 11 days, prompted Truist to cut price targets on both Booking Holdings and Expedia on the same day. The two online travel agencies chose opposite responses: Expedia integrated with Muse for travel booking, while Booking stayed out and relied on its direct consumer channel. Booking's direct mix held in the mid-60% range for four quarters, and large language models send significantly below one percent of its room nights, giving it less incentive to partner. Expedia's B2B revenue, which powers other brands' travel sites, grew 23% last quarter, aligning with its partnership approach.

The broker noted that Meta poses greater downside risks to OTAs given its strong consumer position, but also admitted that the extent to which Muse or other AI agents will affect OTA bookings share remains highly uncertain. Retailers showed a similar split, with Amazon blocking Muse while Walmart, Wayfair and Sephora joined as launch partners. Meta's chief executive said Meta will profit from a small transaction fee, a toll that would likely come out of travel sellers' margins.

Booking looks better placed of the two, with revenue of $7.35 billion beating estimates, Transformation Program savings targeting about $650 million by the end of 2027, and a hotel base further from Muse. Expedia posted 14% revenue growth and raised guidance, but its partnership strategy leaves it more exposed if Meta's fee pressures partner economics. The outcome hinges on whether Booking's large language model traffic stays tiny and its direct mix holds, or whether those measures shift enough to make its standalone stance costly.