On Monday, Expedia Group Inc (NASDAQ:EXPE) maintained its Hold rating with a steady price target of $125.00 as Melius Research highlighted the company's foray into AI-driven customer service enhancements. Expedia's latest innovation is an AI travel assistant named Romie, aimed at streamlining the travel booking and management process.
The introduction of Romie is part of a broader industry trend where online travel agencies (OTAs) and travel companies are integrating artificial intelligence to reduce friction points for customers. By learning from user interactions, Romie is designed to build itineraries, offer suggestions, and facilitate easier rebooking or cancellations as needed.
Described by the company as a combination of a travel agent, concierge, and personal assistant, Romie is expected to personalize the travel experience by adapting to user preferences over time. This level of customization is intended to enhance the booking process, potentially leading to increased customer loyalty and market share for Expedia.
Romie is currently in beta testing, marking the early stages of its development. The travel industry is witnessing an 'arms race' in AI, with competitors like Google (NASDAQ:GOOGL) discussing an AI trip planner and Booking Holdings (NASDAQ:BKNG) Inc. testing 'Penny' for their Priceline brand. Additionally, Airbnb is anticipated to revamp their application later in the year, with a focus on integrating AI technology.
InvestingPro Insights
As Expedia Group Inc (NASDAQ:EXPE) ventures into AI-driven customer service with Romie, its financial health and market performance provide a backdrop for understanding its capacity to invest in such innovations. With a market capitalization of $15.1 billion and a robust gross profit margin of 88.39% over the last twelve months as of Q1 2024, Expedia is leveraging its financial strength to stay competitive in the OTA space. The company's commitment to shareholder value is evident through aggressive share buybacks and a high shareholder yield, which could appeal to investors looking for companies actively managing their capital distributions.
While the company's stock price has experienced volatility, with a 1-month price total return of -11.62% and a 3-month return of -16.16%, the InvestingPro Tips suggest that Expedia is trading at a low P/E ratio relative to near-term earnings growth, indicating potential for investors who are confident in the company's future performance. Moreover, analysts predict the company will be profitable this year, reinforcing the potential upside despite recent market fluctuations. For a deeper dive into Expedia's financials and to explore additional InvestingPro Tips, readers can visit https://www.investing.com/pro/EXPE. There are currently 11 more tips available, offering a comprehensive analysis that could inform investment decisions. For those interested in a yearly or biyearly Pro and Pro+ subscription, use coupon code PRONEWS24 to get an additional 10% off.
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