The economics of AI adoption in OTAs: Market dynamics and future research

Considering the tourism sector’s global economic relevance, its sustained growth, and the accelerating evolution of digital technologies, this study examines the strategic and economic implications of artificial intelligence (AI) adoption in online travel agencies (OTAs). This study aims to systemically analyze how AI-driven transformations impact operational efficiency, market competition, pricing mechanisms, labor market shifts, and broader economic structures. The findings reveal how AI can enhance customer experiences, streamline operations, and improve decision-making through data-driven governance frameworks while also highlighting practical and economic implications. These include cost efficiency and production structures, shifts in market behavior due to dynamic pricing, labor reskilling needs, the widening technological gap between large and small OTAs, and AI’s role in regional economic development. Also, these results offer insight into balancing technological advancement with economic sustainability, emphasizing how AI adoption can influence market concentration, business model evolution, and stakeholder dynamics. The paper concludes by proposing recommendations to address these challenges and suggesting avenues for future research, including a closer examination of AI's long-term impact on industry structure and economic resilience.