The potential for AI in the travel industry

AI systems appear to be taking the world by storm. ChatGPT attracted 100 million active users in less than two months. In the travel industry, many are predicting seismic changes as AI is increasingly used for automating tasks, making personalised recommendations, and predicting future trends.

Here are some examples of how AI is being used in the travel industry both by looking for patterns in data to learn tasks or make predictions (Machine Learning) and by creating new outputs that resemble the training data (Generative AI):

  • Price optimisation: Hilton Hotels uses AI to optimise pricing for rooms based on a variety of factors, including demand, occupancy rates, and the type of room.
  • Fraud detection: Expedia uses AI to analyse customer bookings, payment information, and travel history to identify potential fraud.
  • Customer service: United Airlines uses a chatbot called "AskUnited" to answer customer questions about flights, check-in, and baggage.
  • Personalised travel recommendations: Booking.com uses AI to analyse customer bookings and search history to generate personalised recommendations for hotels, flights, and activities while factoring in the customer's budget and travel preferences.

Despite this wave of innovation, AI is still in its early stages of development, and it is important to be realistic about its capabilities. There are also some challenges that need to be addressed before the full potential of AI can be realised in travel.

  • Accuracy: AI systems can return inaccurate or false information. AI systems are trained on specific data sets, and if the data sets are of poor quality or incomplete, the AI system may produce so-called hallucinations e.g. imaginary hotels.
  • Bias and fairness: AI systems can be biased, reflecting the biases of the data they are trained on. This can lead to unfair outcomes for travellers, such as travellers of certain ethnicities or genders or disabilities being recommended different hotels or flights than other travellers.
  • Data privacy and security: AI systems rely on large amounts of data to be trained.  This raises concerns about the robustness of the privacy and security measures used to protect confidential or proprietary information such as travel itineraries, payment information, and medical history and how travellers gain control over how their data is used.
  • Explainability: It can be difficult to explain how AI systems make decisions. This lack of explainability can make it difficult for travellers to trust and understand the recommendations that AI systems make and how these systems are acting in their best interests.

What is the best strategy for a travel company for adopting AI?

The optimal strategy for AI adoption depends on a number of factors including your specific business goals, the scale of your financial resources, the competitive intensity in your marketplace, your level of inhouse expertise to adopt and manage AI, and your risk tolerance. There are three main approaches:

  • Early movers: These are travel companies that are among the first to adopt new technologies. They are motivated by the prospect of gaining a large competitive advantage and being able to shape the market. However, they also take on more risk, as new technologies can be expensive and bug-ridden.
  • Early adopters: These companies are quick to adopt new technologies, but they are not the first. They tend to be more cautious than early movers, and they wait until the technology has been proven to be viable and effective.
  • Followers: These companies are more hesitant to adopt new technologies. They wait until the technology is mature, widely adopted and significantly less costly before they invest in it. This approach can be less risky, but it also means that followers may miss out on the competitive advantages that early movers and early adopters enjoy.

Ultimately, there is no one size fits all. It depends on your travel company’s specific circumstances.

 

How is Key Travel using AI to serve its non-profit customers?

Key Travel is an international travel management company that is exclusively dedicated to reducing the cost, complexity, risk, and carbon-impact of travel for non-profit organisations so that they can deploy more of their resources on delivering their missions. We have explored how best to use AI to enhance our delivery for customers. While we are keen not to be too early with new technology (as it is usually the second mouse that gets the cheese), we are keen not to be too late (as we do not want to miss opportunities to improve our business in a timely manner for customers who are giving their all to make the world a better place).

We have identified 2 use cases which we are progressing.

  • Resource planning. We have adopted machine learning to help us match agent availability to the level of demand for customer service and support which varies by day and time of day as well as by week and month. This is helping us to deliver to the service levels agreed with customers at all times.
  • Customer service: We have recently launched live webchat in our online booking system which has been a big success. Given the level of demand, we are working with our CRM technology provider to look for ways to automate responses for simple queries or booking requests to free up agents for more complex booking requests or queries which cannot be addressed effectively without human intervention.

In both use cases, until AI technology further matures, we have active human monitoring in place to ensure sensible and reliable outcomes.

Summary

AI applications in travel are here and AI has the potential to be a powerful tool for the travel industry. However, AI systems are still under development and are not perfect. They can be inaccurate, biased, open to abuse and opaque, leading to concerns about their reliability and trustworthiness. These challenges need to be overcome before the full potential of AI in travel can be realised. The level and speed of adoption of AI by travel companies will vary according to each company’s specific situation. Key Travel, a travel management company exclusively focused on supporting non-profit organisations around the world, is pursuing AI-augmented resource planning and customer service to serve its customers better in a risk-controlled way.