Goldman Sachs previews Q1'26 online travel results: demand is stable, experiences are the core growth driver, and changes in AI entry points remain the main debate

Overview

This report is Goldman Sachs' Q1'26 earnings preview for the Americas technology internet online travel sector, covering Booking Holdings, Expedia Group, Airbnb, Tripadvisor, and Clear Secure. The report focuses on industry demand, AI's potential impact on travel traffic entry points, opportunities in experiences, company investment curves, and margin trajectories, while updating its global online travel model and 12-month target prices.

Core views

Goldman Sachs' core view is that online travel demand remains relatively stable globally, and geopolitical and macro concerns have not yet materially damaged industry fundamentals; global online travel bookings are expected to grow at about a 6% CAGR in 2025-2031E, with online penetration rising from about 72% in 2025 to about 81% in 2031E; emerging regions will grow faster than mature regions; and experiences will contribute most of the incremental growth in online travel going forward. At the company level, BKNG is focused on Connected Trip and supply expansion, ABNB on the return on growth investments and signs of margin upside, EXPE on Vrbo, Hotels.com, and North America share, TRIP on investment in experiences and unlocking asset value, and YOU on member growth, subscription penetration, and airport experiences.

Analysis framework

The report combines company 4Q25 earnings calls, third-party industry data, channel checks, TAM forecasts, mobile app and website traffic indicators, and regional and category growth models to update key debates and valuation targets ahead of the Q1'26 earnings season. Industry data sources include Phocuswright, Arival, AirDNA, TSA, US Customs and Border Protection, ARC, OAG, SensorTower, and Similarweb, among others.

Methodology notes

• Industry TAM and Penetration ForecastGlobal Online Travel Model

  Break down the industry's medium- to long-term growth using total travel bookings, online travel bookings, and online penetration.

  The report forecasts the global travel industry will reach about $2.4tr by 2031E, with online travel bookings of about $1.9tr, implying about 81% online penetration; total travel bookings are expected to grow at about a 4% CAGR in 2025-2031E, while online travel grows at about a 6% CAGR.

• Category Growth AnalysisTours, Activities & Attractions Growth Framework

  Identify the contribution of digitalization in experiences and rising OTA share to platform growth.

  The report expects online TAA bookings to grow at about an 11% CAGR in 2025-2031E, with online experiences TAM reaching about $170bn by 2031E, representing about 45% of the overall experiences market of about $375bn.

• Company Valuation and Target Price12-Month Target Price Update

  Adjust target prices for covered companies based on updated operating estimates, growth assumptions, margin trajectories, and segment outlooks.

  The report maintains ratings on most companies but adjusts target prices for BKNG, TRIP, and YOU, reflecting factors such as growth investments, pressure on traditional businesses, opportunities in experiences, and cash flow/buybacks.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BKNG

  Covered company, Neutral rating maintained, 12-month target price of $226

  Strengths

  Q4 gross bookings, room nights, and revenue all beat expectations; global travel trends are stable; Connected Trip transactions grew at a high double-digit rate, flight ticket volumes rose 28% YoY, and attractions business grew nearly 80% YoY.

  Weaknesses

  Target price was lowered from about $227 to $226; it still needs to prove the return on growth investments in supply expansion, core travel products, and Connected Trip.

  Comparison

  Compared with EXPE and TRIP, BKNG offers 18% upside and carries a more conservative rating.

  Risks

  Macro demand volatility, pressure on ADR and length of stay, changes in AI entry points, and the impact of growth investments on margins.

• EXPE

  Covered company, Buy rating maintained, 12-month target price of $355

  Strengths

  Q4 demand environment was healthy, B2B bookings rose 24% YoY, Consumer bookings rose 5%, Brand Expedia grew the fastest, and Hotels.com and Vrbo are set to return to growth in 2025.

  Weaknesses

  Q1 guidance remains cautious due to macro uncertainty; recovery speed in North America share and at Vrbo/Hotels.com remains a point of debate.

  Comparison

  Expected upside in the table is 30%, higher than BKNG, ABNB, TRIP, and YOU.

  Risks

  North America share pressure, margin uncertainty from the fixed and variable cost structure, and a macro demand slowdown.

• ABNB

  Covered company, Neutral rating maintained, 12-month target price of $150

  Strengths

  Q4 bookings and room nights both accelerated versus Q3; nights booked in expansion markets are growing at twice the rate of core markets; Latin America and APAC are growing faster; Services & Experiences launch received positive feedback.

  Weaknesses

  Upside is only 5%; it needs to prove that growth investments can translate into scaled revenue growth and future operating margin expansion.

  Comparison

  Compared with EXPE and TRIP, upside is lower and the rating is more cautious.

  Risks

  Mature short-term rental demand in North America, weak short-term rental demand in Europe, ADR and occupancy volatility, and uncertainty around returns on growth investments.

• TRIP

  Covered company, Buy rating maintained, 12-month target price lowered from $22 to $14

  Strengths

  Experiences business benefits from the industry's fastest-growing segment; management is focused on the Experiences marketplace, which is expected to contribute two-thirds of consolidated revenue and more than half of EBITDA by 2026; AI-native MVP and rising LLM traffic provide new opportunities.

  Weaknesses

  Traditional Hotels and Other business outlook for 2027 and beyond was lowered due to traffic headwinds; near-term investment in experiences, especially marketing spend, will pressure margins.

  Comparison

  Upside is 25%, below EXPE but above BKNG, ABNB, and YOU.

  Risks

  Traffic declines in the traditional business, payback period for investment in experiences, and weaker-than-expected AI product conversion and asset value realization.

• YOU

  Covered company Clear Secure, Buy rating maintained, 12-month target price of $65

  Strengths

  Q4 key operating metrics, P&L, and KPIs all exceeded guidance and market expectations; renewal of a multi-year partnership with American Express eased concerns about member and revenue retention; 2026 target is at least $440m in free cash flow, with increased buyback authorization and quarterly dividend.

  Weaknesses

  Still needs to validate the sustainability of pricing and member growth, subscription adoption, usage rates, and improvements in airport experience.

  Comparison

  Upside is 11%, below EXPE, TRIP, and BKNG, but supported by cash flow and shareholder returns.

  Risks

  Slowing member growth, opaque renewal terms, execution risk in expansion into non-travel verticals, and the impact of growth investments on incremental margins.

Key data

• Global Online Travel Booking GrowthAbout 6% CAGR in 2025-2031EGoldman Sachs' updated global online travel model forecast.
• 2031E Online Travel PenetrationAbout 81%Up from about 72% in 2025.
• 2031E Global Travel Industry SizeAbout $2.4trUnder text descriptions excluding part of the managed corporate scope, online travel bookings are about $1.9tr.
• Online TAA Booking GrowthAbout 11% CAGR in 2025-2031EThe report views experiences as the fastest-growing category in online travel going forward.
• 2031E Online Experiences TAMAbout $170bnEquivalent to about 45% of the overall experiences market of about $375bn.
• Alternative Accommodation GrowthAbout 5% CAGR in 2025-2031EWith online penetration at about 87% in 2025, the report views this category as the slowest-growing relative to other online travel subsegments.
• OTA Online TAA ShareFrom about 19% in 2019 to about 31% in 2031The report expects OTA share in online experience bookings to continue rising.
• Q1'26 TSA Passenger Throughput+1% YoYImproved from about -2% YoY in Q4; roughly flat in January, +3% in February, and +2% in March.
• Q1'26 Foreign Arrivals to the US-2% YoYUS Customs and Border Protection data show foreign arrivals to the US are still declining.
• Q1'26 Global Airline Seat CapacityAbout 108% of 2019OAG data; domestic flights are about 106% and international flights about 110%.

Impact & implications

For investors, the report reinforces that the online travel industry still has a medium- to long-term penetration growth story, but the growth mix is shifting toward experiences, emerging regions, and expansion of platformized services. In the near term, the focus for Q1'26 results is not only booking growth, but also the intensity of company investments in AI, direct traffic, regional expansion, and product expansion, and how those investments affect margins and EPS revisions. TRIP and EXPE offer relatively high upside in the target price table, BKNG remains high quality but is kept at Neutral, ABNB has limited upside and needs to prove the efficiency of its growth investments, and YOU benefits from members and cash flow but still needs to demonstrate airport experience and subscription penetration.

Risks

• AI-generated interfaces may change online travel traffic entry points and user acquisition paths.
• Macro volatility, geopolitical conflicts, and tariff-related factors may affect travel demand.
• In a slowing growth environment, marketing intensity may rise and pressure margins.
• Long-term non-marketing investments may lead to weaker near-term operating leverage.
• Alternative accommodation is maturing in the North American market, and European short-term rental demand data are weak.
• Declining foreign arrivals to the US may weigh on some US inbound travel-related demand.
• Improving supplier digital capabilities may weaken OTA share expansion in certain categories.

What to watch

• Whether Q1'26 company results validate the view that global travel demand is stable and slightly better than Q4 guidance.
• The sustainability of growth in BKNG's Connected Trip, flights, and attractions businesses.
• User conversion for ABNB Services & Experiences, growth in expansion markets, and the margin path.
• The recovery speed of EXPE's Vrbo and Hotels.com, North America share, and the sustainability of B2B growth.
• TRIP experiences booking growth, return on marketing investment, and traffic pressure on the traditional business.
• YOU member growth, subscription usage, airport experience improvement, and free cash flow delivery.
• Trend changes in high-frequency data such as TSA, OAG, AirDNA, SensorTower, and Similarweb.
• The impact of AI entry points, LLM traffic, and platform supply aggregation capabilities on the OTA competitive landscape.