Booking Holdings has launched Lola, a wholly owned AI travel assistant that operates as a rival to the company's own flagship brands. Kayak co-founders Steve Hafner and Paul English run the startup, which reports directly to CEO Glenn Fogel and runs on a separate technology stack from the parent company.

Lola carries a traveler from a vague idea to a booked trip inside a single chat. A team of about 20 employees in New York and Cambridge, Massachusetts built it over five months. Fogel gave Hafner a mandate to build from scratch, which gives Lola startup freedom plus Booking's capital, inventory and partner credibility.

The money model is the novel part: three membership tiers replace commissions. A free tier anchors the product, a Plus tier costs $5 a month, and a VIP tier costs $25 a month, with both paid plans on 12-month commitments. Lola passes back the commission it would normally keep — the mechanism that lets it undercut its own parent's pricing.

A company-supplied example prices a four-night Miami Beach stay at $783 for a VIP member, against $997 on Booking.com and Expedia. That $214 gap on a single booking exceeds the $300 annual VIP subscription cost by two-thirds, though travelers booking less frequently would need to run the math against the 12-month commitment.

Lola sells supply from Booking Holdings brands — Booking.com, Priceline and Agoda — alongside outside partners including OpenTable, ResX, SeatGeak, GetYourGuide, FareHarbor, BLADE, Aero, Nuitée and Ten Group. Ticketmaster/Live Nation, AEG, SevenRooms and Resy are under discussion.

Humans stay in the chat. Concierge company Ten Group handles member requests, metered by tier, and brings enhanced-benefit relationships with roughly 5,500 to 6,000 hotels covering perks such as upgrades and late checkout.

Hafner expects about 90% of active users to stay on the free tier. That projection matters for unit economics: if the vast majority of users generate no subscription revenue, Lola's profitability depends on the minority of VIP and Plus members booking often enough for the commission pass-back model to hold — and on how much of the parent's marketing budget funds acquisition in the meantime.

The structure gives Booking Holdings a hedge. Lola competes for travelers who want a chat-based, subscription-priced alternative to commission-marked-up rates, while Booking.com and Priceline keep their conventional agency and merchant models. If Lola's pricing pressure grows, Booking Holdings cannibalizes itself on its own terms rather than ceding those customers to an outside entrant.

Hafner says the aspiration is for Lola to become as big a brand as Booking.com.