The scope for disruption of the travel bookings sector by AI is high as already 66 pc of bookings are online, with mobile bookings accounting for 35 pc of all online sales
Artificial Intelligence is set to take the global travel and tourism world by storm, says report by global market research firm Euromonitor International. The report, Voice of the Industry: Travel Survey, says that the number of travellers using artificial intelligence (AI) tools such as ChatGPT to plan their travel itineraries is set to boom and as many as 97.8 pc of travel executives around the world expect AI to have an impact on their industry.
Caroline Bremner, Head of Travel Research at Euromonitor International says that the massive increase can be narrowed down to convenience and round the clock accessibility as travellers can access AI tools from various devices, including smartphones and computers, at any time and from anywhere, just with an internet connection.
Moreover, the scope for disruption of the travel bookings sector by AI is high as already 66 pc of bookings are online, with mobile bookings accounting for 35 pc of all online sales.
It says that the travel industry is already adapting as leading Online Travel Agent (OTA) Expedia announced in April 2023 its collaboration with OpenAI, offering in-app trip planning powered by ChatGPT for iOS, as well as offering a plug-in to ChatGPT Plus users. Euromonitor says that the Expedia ChatGPT experience provides personalised recommendations, acting like a virtual travel assistant, delivering relevant results for hotels and what to do in destination.
Similarly, another large OTA, Booking Holding’s Kayak and OpenTable have also announced ChatGPT plug-ins and other travel brands like TripAdvisor, GetYourGuide and Klook followed suit, says Euromonitor, adding that Trip.com integrated ChatGPT into TripGen, its newly released AI chatbot that provides real-time assistance, itinerary planning and booking tips in the pre-trip stage. Hotels and airlines meanwhile are turning to generative AI for customer service, while automating menial tasks.
Caroline Bremner
But adoption of AI is not without challenges. “The path of AI adoption will not run entirely smoothly as there are major concerns over consumer privacy with countries like Italy temporarily banning ChatGPT. There are also concerns over large language models being reliant on out-of-date internet knowledge, with a lag of two years in the case of ChatGPT with no access to current events or real-time information. However, access to real time data has been enabled thanks to a new plug-in with Microsoft Bing. The risks of amplifying misinformation, bias and inequality are all too real. Safety and security of consumers must be of paramount importance. Tech leaders like Elon Musk recently demanded a pause on AI development to avoid risks to humanity including possible extinction from superintelligence, stating that the AI race was out of control and time was needed to enable government policy to play catch up,’’ says Bremner.
“Travel agents faced mass disruption due to the rise of online travel three decades ago, that led to mass store closures and job losses. Now, the sector is ripe for more disruption as generative AI accelerates automation of tasks across every stage of the customer journey, before, during and after the trip. With Microsoft planning to integrate generative AI into its Microsoft 365 Copilot software, it will become ever more prevalent in consumers’ daily lives and work whether we like it or not. As before, travel brands will take the rough with the smooth to navigate this new phase of digital transformation with a test and learn approach. However, only those that ultimately celebrate the human touch of travel and hospitality will thrive,” she adds.
Leaders & laggards
The adoption of AI by the travel and tourism industry and by users is proceeding at different speeds, says the report. “Euromonitor Voice of the Industry: Travel Survey for 2022 shows that Asia Pacific, with 52.5 pc, and Western Europe with 51.7 pc, are slightly ahead in terms of how AI is impacting travel businesses and being integrated into the product/service offer as well as operations. Behind the curve are the Americas, with 40.6 pc, where the focus remains on big data and analytics,’’ Bremner tells India Outbound.
She adds that travel brands are deploying AI for a number of tasks, with the primary focus being on enhanced website functionality and improved customer engagements such as providing tailored and personalised marketing and recommendations.
“Online travel agents and metasearch players have led the way in AI adoption, particularly global brands like Expedia and Booking. Although many travel brands from hotels to airlines have rolled out chatbots across their websites to deal with more basic customer service responses. Over the next five years, the shift will continue to sending more and more complex customer service interactions to AI, whether through chatbots, voice or now more recently with Generative AI,” says Bremner.
Euromonitor believes that the highest potential for disruption is in travel brands that are heavily involved in travel search, travel booking as well as in-trip operations. “Sectors like business travel and bleisure where those travellers expect a high level of efficiency, seamlessness and automation will lead AI adoption and some sectors where there is less online penetration such as experiences and attractions will be among the laggards,” says Bremner.
On the issue of whether the travel industry players will use vendors for AI or will they use inhouse technologies, Bremner says that for the OTAs, they have their own technology stacks, and many will also be working with cloud providers like Amazon and Microsoft. “With ChatGPT connected with Copilot, many travel brands will have access to AI at the tip of their finders through their daily applications like Outlook, Word and Excel,” she adds.
High risk verticals & jobs
Bremner says that the verticals most expected to be at risk of disruption from AI are travel agents and tour operators, where Large Language Models or LLMs like OpenAI’s ChatGPT and Google Bard will increasingly be used for trip planning and facilitating bookings. “Travel agents saw mass disruption to their business model following the emergence of online bookings and the OTAs. There will follow a new round of automation and job losses, however, only for those companies that don’t incorporate Generative AI into their daily business, or show how they differentiate through the quality of product/service on offer. Other jobs at risk are within customer service departments as AI becomes more adept at dealing with advanced customer queries and requests,” says Bremner.
There are many other sectors where jobs are highly vulnerable to deployment of AI or other technologies. “Front office hotel staff will also be lost to robots as well as increased self-service automation, taxi drivers will be impacted by the future shift to driverless vehicles, pilots will feel the impact from autonomous planes,” she says, adding that staff resourcing will also see a shake-up as new employee management systems leverage AI to help with staffing across travel and hospitality.
