Robert Rosenstein, co-founder of Agoda, has expressed concerns that artificial intelligence (AI) could further widen the gap between large and small players in the travel industry. Speaking on the issue, Rosenstein highlighted that AI, much like previous technological advancements, may amplify disparities between well-resourced and under-resourced companies.
“We’ve seen this pattern before with search and marketing,” Rosenstein remarked. “Large corporations with substantial budgets were able to leverage these tools effectively, while smaller entities struggled to keep pace. The same could happen with AI, where the need for advanced engineering capabilities might be out of reach for smaller companies.”
Rosenstein, who co-founded Agoda in 2005 and sold it to Booking Holdings in 2007, noted that while smaller companies often benefit from being more agile and adaptable, the current advantages of AI—such as increased productivity and cost-cutting through automation—tend to favor larger firms.
He questioned how smaller companies could restructure to effectively invest in AI, emphasizing that this would require substantial investment in human capital and specialized engineering skills. “How can these companies reorganize themselves to harness AI effectively? It demands a significant commitment to hiring engineers who can leverage these technologies,” Rosenstein said.
Although Rosenstein is now a senior advisor to Glenn Fogel, CEO of Booking Holdings, and thus aligned with the larger players in the industry, he remains empathetic towards smaller enterprises. “Can a small company with just a handful of engineers compete, or will they be sidelined by the advances of AI? If large companies can enhance their customer service efficiency and invest heavily in engineering and marketing, I have real concerns about the survival of smaller firms.”
In response to how smaller companies might navigate these challenges, Rosenstein suggested collaboration as a potential strategy. He posed the question of whether tech giants like Google could develop travel products that support smaller businesses in succeeding amid these technological shifts.
This perspective aligns with a recent article by Matt McIIwain in Madrona, which argues that the significant investments in AI by big tech firms could ultimately benefit startups by creating opportunities for disruptive innovation. McIIwain suggests that while major tech companies are leveraging AI for their own growth, they are also setting the stage for new ventures that could drive future industry transformations.
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