How AI Is Changing The Travel Industry
Artificial intelligence, machine learning, and neural networks are words that are often seen in today’s business technology headlines. Are robots taking over the world? Or are they just here to help you find the best hotel for your next holiday?
Artificial intelligence may seem like the bane of some futuristic, dystopian society but you’ve probably already come into contact with it in something as simple as booking a hotel or flight.
What can AI do for the travel industry?
In short, AI technology can enable travel suppliers to provide their customers with a new form of more personalized interaction. Again, consider the example of Siri, who helps customers by answering questions and providing individualized recommendations based on the device user’s past searches. In the travel industry, AI software can learn from a customer’s ongoing interactions (that’s machine learning) to ultimately deliver “personal assistance” through a user-friendly interface—through chat or spoken word.
What’s the advantage to travel organizations?
Central to the concept of AI, at least in the applications emerging in the travel industry, is the next-generation use of data. The technology combines travel intelligence and customer intelligence and turns it into remarkably usable information that can impact an individual traveler’s trip planning experience.
It essentially pushes market segmentation to the next level. Travel organizations who know how to leverage their data effectively will be able to target customers as individuals, not just as “members of Generation X,” for instance. They’ll have insights into customers that they’ll be able to parlay into highly personalized guidance, which can lead to sales opportunities and a stronger relationship with the brand. For more on this read, What Does The Future Hold for Travel Agents? on TravelPulse.com.
Making Recommendations
You will see recommendations based on your previous searches and bookings. This is also the case if you book a flight to LA, for example. Typically, you will be taken to a page offering hotel and car rental options in the Los Angeles area after booking. The apps can even recommend alternative travel dates, destinations and local sightseeing options based on your search queries.
These data-driven recommendation tools are widely adopted by applications. It’s common for users to receive recommendations based on their previous searches or even what others have booked. Google Flights, for example, gives you ‘Date Tips’ that suggest cheaper travel times and cheaper airports based on your destination. Kayak, among many others, provides a map view of an area that displays prices of hotels as well as ‘popular area’ views. This gives you a heat map of your destination city showing eating, sightseeing, shopping, and nightlife.
Dynamic Pricing
Hotels change room pricing many times every day based on different variables in the market. They use data such as pricing, weather, user booking pattern, occupancy, room types and more. As time goes on, more and more data points will be added, allowing hotels to adjust prices to an even more accurate degree. For example, if a hotel in LA only has a few rooms left during the summer when the forecast calls for sunny skies, the price of the room will be higher than during a cloudy day in February. Data-driven pricing can be used by hoteliers to drive more direct bookings and stay competitive.
Travel Assistants
Often appearing within instant messaging apps such as Facebook Messenger and Slack, AI travel assistants (also known as chatbots) can help you plan your entire trip. They do everything from searching for the best flight and hotel deals to giving suggestions on tourist attractions like the best places to eat or museums to visit. You can even ask them for flight, airport, and traffic information, making them perfect a perfect resource while on the go. The uses of these assistants will be amplified in the future as more travellers use voice devices such as Amazon’s Alexa or Apple’s Siri.
The Cosmopolitan of Las Vegas revealed a new AI concierge named Rose. This is both a differentiation effort and a way to improve guest services. When guests check in at the Cosmopolitan, they receive Rose’s phone number to text with any hotel inquiries. Kayak’s integration with Google Assistant and Hipmunk’s Hello Hipmunk are examples of travel assistants on the metasearch side that give you a variety of options and answer questions for planning your trip.
Is AI really the next big thing in travel?
Yes. Digital creative agencies, Blitz and AMP, recently conducted a market research study to learn about consumer travel planning behavior–and they predict that the combination of AI and human expertise is about to disrupt the travel agency industry. In fact, the possibility for better, more personalized recommendations powered by big data and artificial intelligence is among the four trends they predict will increase demand for travel agents in the near future. This is discussed in their report Targeting Moments of Need in the New Travel Landscape.
And yes, it’s ripe to happen now, as it’s the emergence of cloud and cluster technology that’s enabling the wide implementation of new AI technologies. (Read the HospitalityNet.org article Artificial Intelligence and Machine Learning: What will be the Impact on The Travel Industry? for a deeper dive.) Many companies are ready to explore their AI capabilities.
