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When Microsoft made headlines in February for integrating OpenAI’s ChatGPT into its perennially second-place Bing search engine, many people’s reaction was – chat-what? At the same time, other heavyweight tech companies such as Google and Meta (Facebook), are launching or planning to launch their own AI large-language model (LLM) chatbots.
AI in travel has the potential to revolutionize the industry’s customer experience by delivering more focused and personalized experiences.
How is AI used in the travel industry?
Just as AI isn’t a single technology, there’s no single definition of AI. Generally speaking, AI uses advanced analysis on large data sets to simulate human intelligence.
The most common use of customer-facing interactions with AI has been the now ubiquitous chatbots – those pesky pop-ups on websites that seek to answer your questions prior to your query getting so complex that it needs human intervention – basically automating customer service.
Gartner predicts that chatbots will become the primary customer service channel for roughly a quarter of organizations by 2027.
AI in the travel industry has already begun going beyond better customer service chatbots by developing individual trip recommendations and forecasting prices on flights and hotels.
Some examples:- Kayak uses an AI-powered tool that predicts the price of flights and recommends whether a customer should purchase an airfare or wait.
- Hopper offers travelers an AI-powered app to analyze and predict flight and lodging prices to help users find deals on hotels, flights, and rental cars.
- FLYR Labs helps airlines increase revenue by using AI to analyze routes and revenue data to forecast optimum fares, demand, routes, and capacity.
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Personalization at its best: AI-driven travel experiences
While chatbots can help plan travel, answer questions, and share information about hotels and destinations, the real secret sauce of AI will go beyond customer service automation and predictive analytics. It will enable travel companies to personalize every interaction at every touchpoint.
Personalization of travel experiences has always been one of the main goals of the travel industry, but even individual itineraries built by travel agents can tend to get cookie-cutter and certainly can’t be done at scale.
In fact, 47% of travelers decided not to book their travel because their specific underlying needs were not being met, (e.g. pet-friendly accommodations, specific activity preferences, level of comfort/luxury), while only 26% didn’t book due to price, according to Google.
By catering to those specific needs, travel companies can ensure a higher likelihood of bookings – that’s where AI can really kick things into high gear.
There’s a new brand of AI travel planner sites that will create itineraries based on your specific interests. They do the work of finding vegan restaurants, hidden gem museums and city bike tours. Google found that the average traveler spends 13% of their time online conducting travel-related activities. Sites like Roam Around, Roamr, iPlan.AI and Curiosio take the time and legwork out of scouring sites and activities that match your interests.
But, as usual, the devil is in the details. These travel planner sites are not yet connected to real-time flight schedules nor ticketing platforms so they’re unable to book your flight, get you that theater ticket or book a dinner reservation.
However – we’re quickly getting close. For instance, the Skyscanner Chatbot on Facebook Messenger or Whatsapp, will give you suggestions on where to go and what to see and can get real-time pricing and redirect you to the official Skyscanner website to make your purchase.
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Examples of how AI can differentiate your travel brand
Differentiation in the travel business is all about creating personalized experiences that make your travel brand stand for something unique. There are many niche travel experience brands out there.
For example, there are those that specialize in activity-based travel packages (biking, hiking, kayaking), comfort-level distinction (luxury, budget, hut-to-hut) and specialized interests (photography, educational, volunteer).
AI provides travel companies the ability to even further differentiate themselves. Consider these possibilities:
- Virtual travel. AR/VR and the metaverse have had more than their fair share written about them, but the travel aspect of this new technology hasn’t been fully developed. Many groups with limited mobility, economic resources and time are prime targets, as well as those that see the sustainability aspects of this type of travel. AI-enabled AR/VR is the logical next step in technology.
- Serving emerging niches. Niche tourism is nothing new, but AI enables the long tail of travel searches to become a reality. Homestays, rural-experience stays, slow travel, etc. are all tourism niches upon which AI can make a vital impact.
- From search to booking. The ultimate AI-powered travel enablement would be the ability to search for and create an itinerary, and then have AI research all of the needed modes of transportation, lodging, and activities for said itinerary and book those for you.
- Offer on-the-fly changes. One of the most frustrating aspects of travel is that things can change unexpectedly. Flights may get cancelled, weather may impact a planned outdoor activity, or dinner reservations might be mistakenly booked for the wrong night. AI can offer a fast set of alternatives to help you quickly get rebooked.
- Individualize travel itineraries at scale. Travel agents are often limited by the amount of time that they can devote to any one customer’s itinerary, but AI’s blazing fast speed can create itinerary options at an exponential rate.
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Getting the most of AI
AI is taking the world by storm — a fast-moving storm that will leave a different world in its wake. Most in the travel industry are scurrying to implement this technology as quickly as possible.
But while there will be some first-mover advantages, ultimately, it will be the travel companies that are better able to identify the many facets of the travel journey and, accordingly, provide tailored, individualized experiences that will be most successful with AI.
