Artificial Intelligence is now being widely adopted throughout the travel industry. Many airlines, hotels, online travel agents and destination managers all use machine learning systems for pricing, predicting, personalisation and engaging with customers. However, the adoption of AI is very limited and quite narrow. AI will not bring any new reasons to travel or eliminate friction associated with travelling but will allow the industry to operate more efficiently and transfer some responsibilities away from the staff. There are benefits but it depends how the industry wants to utilise AI over longer terms.
Matching Supply and Demand Accurately
One of the biggest benefits has been seen through revenue management. Airlines and hotels have had advanced pricing models for a while but with machine learning the models can be made more advanced with lots more variables. These include customer searches, competitor activity, weather, local events and even social media. As a result pricing can be adjusted more accurately according to demand. Customers who have flexible or last minute travel requirements may see more availability and lower prices. However, it can be difficult to understand why you are receiving certain fares/rates. Destinations and operators that provide accurate local data into their systems can see a benefit of directing customers to areas where they have better data. This can reduce pressure on busy areas but can increase secondary areas. But if there is not accurate data being inputted into the systems then issues can often still occur with matching supply and demand.
Personalisation
Recommendation engines are being used for a large proportion of planning trips. Systems will look at data such as previous bookings, preferences, searches and contextual information to suggest which flights, hotels, activities to take and even entire itineraries. This can be a great benefit if there is accurate data within the system and your preferences are quite set in stone. Hotels will also use similar models to personalise the rooms, dining suggestions and upsells. Many customers will see this as a convenient option. However, most systems currently are good at optimising based on your usual choices but not so good at providing new experiences. Using too much historical data can also mean the most popular destinations and products will be highlighted. The next challenge for the industry will be to see if personalisation can be used to help customers rather than limit their options.
Minimising Certain Issues
AI is helping to reduce issues. Airlines and railways are using predictive maintenance to identify potential issues with equipment. Hotels and attractions are using demand forecasting to ensure they have the correct amount of staff and supplies. Rebooking can be done automatically with the systems knowing where issues are happening in real time. A large amount of simple queries can be answered by chat bots and virtual assistants. This can save time and can speed up recovery. However, it doesn’t eliminate the issues entirely. Weather, air traffic and infrastructure will still cause issues. Customers will still be delayed but the information can often be provided quicker. This will depend on how accurate the systems are.
Sustainability
More platforms are using AI to calculate and show carbon emissions for different options or suggesting low emission options where possible. Some hotels also have energy management systems to help reduce energy usage. This can help customers see the environmental impact but can also help operators reduce waste. However there has not been much impact on actual emissions. Most customers will still choose based on price, timing and convenience. Carbon will only really affect those who are already looking to make a difference. The models will be based on averages and assumptions meaning it can be misleading for individual journeys. AI can help customers and operators make slightly better choices but overall there is still an issue with increasing numbers of travellers and climate change.
Best Benefits
The best benefits will be seen when AI is being used for high volume and structured tasks but humans are clearly responsible. Pricing can be maximised but this can cause issues with brand perception in the long term. Personalisation can improve satisfaction but can reduce the variety of experiences. Efficiency can be improved but will hide the real issues with capacity. Destinations and companies that are using AI purely to reduce costs and conversions will see a benefit. However those who are using it to improve transparency, distribute visitors more evenly and ensure humans are still in control of decisions in novel situations will see an improvement in traveller confidence over time.
AI is already being used to price, plan and operate travel. The most sustainable benefit will be seen through intelligent demand management and reducing unnecessary issues. Just because something is efficient doesn’t mean it will improve the journey. Organisations who use AI to make intelligent decisions about what type of travel system they want to have will see the benefits.
