Travel AI: Look Beyond the Obvious
“AI is experiencing its iPhone moment.”? Mike Dowdle , managing partner of Circadian Ventures made this observation in a recent investor meeting.? The massive inflow of capital into AI-centric companies supports this idea.? So what does this mean for travel?
The standard response today is that AI will help consumers shop and plan trips.? <yawn>
This has been the go-to first response for each new technology innovation, and while there is still room for massive improvement in leisure trip planning, travel providers and sellers are missing the real opportunity.? Here are two applications of AI which will be transformative for the industry across all types of travel:
Who is going to travel?
Corporate travel used to account for nearly 60% of all trip activity.? The combination of COVID-19 and the work-from-home revolution has stalled this recovery.? Even so, business travel is rebounding - sort of.? Since the pandemic, corporate travel activity has been more localized.? According to Kalibri Labs , most companies with active travelers are only visiting five cities - a huge drop from the pre-pandemic norms.? This change is attributed to the types of companies that are traveling.? Most business travel is coming from the “long tail” of corporations instead of the top 2,000 traveling entities of the past.? These companies fall below the threshold of global sales teams, but locally negotiated rates are insufficient to capture the full opportunity.
Artificial Intelligence will help. ? Data from multiple sources be combined to identify which entities are actively traveling, and advanced data science techniques can also predict future travel needs of these companies.? Armed with this information, travel salespeople can get ahead of demand and capture market share with targeted offers and incentives.? Old school players, used to building sales plans based upon historical consumption data, will be left to pick up the scraps.
While travel suppliers are in a good position to leverage AI for this purpose, we expect third parties, like Booking.com , 谷歌 , and Expedia Group to embrace this opportunity first.? OTAs (online travel agencies) have struggled for relevance in corporate travel. Still, the AI revolution should provide exactly the catalyst for these companies to finally dominate negotiated travel as effectively as leisure.
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Getting the Next Trip
Most travel companies focus on capturing the immediate opportunity for sales.? This focus on the leisure trip being booked right now ignores the impact of each travel experience on the customer’s future choices.? AI should be used to improve the traveler experience now in order to build preference and loyalty for future trips.
Travel experience providers tend to be reactive.? When travelers express a need or concern, good providers work hard to satisfy the customer.? Success is measured in service delivery and problem resolution metrics, but these metrics don’t measure missed opportunities.? Behavioral data, analyzed by AI, can create service cues which predict unstated needs and desires.? Anonymous, individual travelers are pleased by different things, and today’s machine learning systems will provide live insights into how to win the hearts and minds of each traveler through proactive decisions.? The customer experience cycle starts with the booking and ends with departure, and opportunities to exploit anticipated needs exist throughout this cycle.
Trip?satisfaction for its own sake is admirable, but there are commercial advantages which drive the real payoff.? By using AI to avoid dissatisfiers and to address unexpressed needs, travel companies secure major advantages in winning the next trip.? The resulting improved market share is accompanied by lower acquisition costs and higher spend levels - the holy grail of the travel business.
What will it take?
The pieces are in place right now.? Data integration - the theme of the past 5 years - has created the potential.? Artificial intelligence will be used to mine for opportunities and define action plans.? For digital travel companies, these same systems will also be able to implement these actions without human intervention.? Analog companies (travel suppliers) will use system prompts to trigger personal actions by staff and service personnel.? Either way, winning players will become more efficient, more effective in their paths to long-term market dominance.
Co-founder & COO @ Onvo AI - Embed AI Powered Dashboards
1 年Interesting article Del. Coicidentally this is one of the problems we are trying to solve using AI. We are building a tool that enables travelers to easily plan and book their holidays. We just recently launched on product hunt too https://www.producthunt.com/posts/guidenco
Hospitality and Travel Industry Revenue Management, Pricing, Data Science, and Analytics Expert
1 年Del, this is a great little piece, and what perhaps stands out the most is that it *doesn't* mention ChatGPT or LLMs. I think the industry is still on a trajectory to leverage AI in the form of predictive analytics and you've used two solid examples of what might come next. It almost seems like all of the discussion on ChatGPT is possibly a "buzz-y" distraction, but I think its place is in 1) improving productivity, especially in the development of new tech solutions but also among strategic teams like Revenue Management, and 2) introducing a relatively new touchpoint through which hotel guests can engage with operators, which could in turn help the feedback loop for data collection and relevance/accuracy of predictive models.
Sales Operations Vice President l Sales Senior Director l People Focused Leader - Deliver revenue growth and sales effectiveness, enablement, and transformation thru relationships, strategies, teams, and technologies
1 年Spot on Del Ross thank you for sharing. In addition, the opportunity for AI to integrate data sets from in-company sources with macro-economic and segment data will drive greater understanding and therefore positioning for which customers to pursue for upcoming economic/segment cycles.