A new study shows Generative AI is challenging OTAs, pushing them to adopt GEO strategies with AI-ready content and incentives or risk irrelevance. Google Business Profile has become hotels’ main storefront, and AI travel recommendations are seen as highly trustworthy, boosting conversions.
Austin, TX, September 10, 2025. A new study led by Propellic, an AI-first digital marketing agency specialized in travel and tourism, in collaboration with Eric Van Buskirk, Founder of Clickstream Solutions, and Kevin Indig, publisher of Growth Memo, reveals that fewer than 10% of bookings observed in Google AI Mode were made through OTAs, compared with 56% completed directly with hotels or activity suppliers.
This is one of the main conclusions of the research, which analyzed 300+ booking journeys, 71,000 words of transcripts[1], and thousands of clicks and actions in real-world travel planning scenarios in Google AI Mode, showing that the future competitiveness of OTAs depends on investing in a strong GEO strategy with AI-ready content and booking incentives.
“Generative AI is now the new competitor to OTAs,” says Paul Teddy, Senior Director of Operations at Propellic. “While direct booking sites have an inherent advantage, it can easily be lost without proper GEO best practices. This represents an opportunity to achieve disproportionate ROI with a relatively small budget”, states Teddy.
The study also observed that optimizing Google Business Profiles to appear above the fold and provide essential information for travelers is becoming critical as search shifts to AI mode. When users clicked on a local pack or inline link that opened a Google Business Profile card in the right panel, they engaged with websites, reviews, prices, and photos.
Google is embedding these mini-local packs directly within AI-generated responses, and users are interacting with them before even reaching traditional search results. This means a Google Business Profile now functions as the primary storefront for a hotel or business, surpassing the traditional role of the website.
AI Mode is the future, not just a feature
As Google’s CEO Sundar Pichai said, AI Mode is the future of Google search. In fact, AI Mode has already pushed the 10-blue links down the page and taken over the travel planning process. Information is gathered and decisions are made in AI Mode. The only task that requires the user to leave AI is booking (for now).
“For decades, travel marketing mapped campaigns to ‘dreaming, planning, booking,’” says Brennen Bliss, CEO and Founder at Propellic. And adds: “LLMs blur the phases of the traditional funnel into one environment. The new competition is about controlling the collapsed funnel inside the AI ecosystem. Whoever owns that interaction wins the traveler.”
The study also revealed several key trends in traveler behavior within AI Mode, including:
- High trust in AI recommendations: destinations, hotels, and activities suggested in AI Mode scored over 4.3 out of 5 in consumer trust, giving brands a significant conversion advantage.
- Get inline to get clicked: Users in Google AI Mode tend to click directly on inline text links without exploring other features. The goal of AI inclusion should be to appear in inline links. These attract the most attention, rather than the citation list on the right. How you appear in those passages that contain your inline citation becomes even more important as travel planning continues to shift to AI.
- Conversations replace keyword searches: average query lengths have more than doubled, showing a shift from simple keyword searches to longer, more conversational prompts that guide planning and decision-making within AI Mode.
Yesterday’s best practices no longer align with today’s travel journeys or complex user behaviors. As highlighted by Propellic’s study, strategies must evolve to connect with travelers who expect to find all the information they need in AI Mode, enabling them to make decisions with clarity and confidence.
“Content across owned landing pages, Google Business Profiles, earned media, and paid media should be structured, designed, and written to match user questions, behaviors, and preferences. The right data and metrics must be tracked, and the most relevant insights applied to drive more bookings”, concludes Bliss.
Travel brands and marketers that evolve with user behavior and continuously analyze and optimize their strategies will be in the strongest position to win with AI.
For more insights, download the full Propellic study: https://www.propellic.com/research
[1] With 42 participants completing more than 300 real-world travel tasks, this study produced a statistically significant dataset while still allowing researchers to analyze every nuance of user behavior (71,000+ words of transcripts, screen recordings, and click-path analysis). Leading UX research (e.g., Nielsen Norman Group) shows that patterns emerge quickly in usability studies, often after as few as 5–10 participants.