Has Generative AI hit a wall with the travel industry?
DISCLAIMER: This was written by me entirely, on a keyboard, not by ChatGPT or Skynet - I know, who does that anymore? So any mistakes are mine alone!
With any technological advancements, there are fluctuations in interest, and these tend to be fairly consistent regardless of the specific technology. There’s an initial buzz, followed by a Honeymoon phase of R&D, maybe some investment, and lots of talk (but little real action). Eventually, if enough real value is extracted, everyone dives in.
If not, as has been the case with VR, it is relegated to a pile of “nice shiny things” fit only for the magpies.
SIDE NOTE: As they did with VR, Meta are wading into generative AI with what appears to be an inferior offering. Their plan includes integrating AI into group chats so plans can be made for trips, restaurant picks, and activities without leaving messenger, keeping customers in the ecosystem (though I remain deeply sceptical of attempts to constrain customer decision-making on a single platform, particularly when it comes to booking holidays).
Many companies within the travel industry are playing chicken with generative AI, waiting to see who will be brave enough to take a risk and, hopefully, either fail fast or succeed with speed. Could this prove to be a missed opportunity for brands who fall off the AI bandwagon or simply don’t jump on in time?
What is the appetite for AI in travel?
At the most recent edition of the Digital Travel Connect conference back in May, we surveyed our audience of 40+ senior leaders from top travel brands, asking them:
Having had further conversations with leaders from top airlines, hotel groups, cruise lines, OTAs and other verticals, the enthusiasm for the topic has certainly lessened. Many feel that the measurable business impact of the technology in the short-term is fairly limited. But does that mean that the long-term impact is any less significant?
Travel’s AI early adopters:
There are brands who are boldly taking leaps to utilise these technologies. Alaska Airlines are testing an AI-driven search tool for flights, which can help customers leverage their loyalty points and is soon to be more widely available to customers.
TUI has been a market leader in harnessing these new capabilities and upskilling people to maximise the potential of generative AI. TUI certainly seem to be on the right track, at least according to our delegates:
Incidentally, TUI Musement are presenting a case study on their successful use of generative AI in the content space at the upcoming Digital Travel Summit (Nov 21-22, London – grab a ticket here).
Flight Centre Travel Group (FCTG) are making a similar investment with their “AI Centre of Excellence”. The need to invest in skills, in anticipation of further technological advances, may dictate the market’s future winners and losers.
Will AI make a substantial impact on customer acquisition?
The real test for AI will be whether it will drive more business, thereby proving it’s actual, measurable value. And already, important marketing channels are rife with AI experimentation.
The search marketing landscape was already fiercely competitive and rapidly evolving - now “generative engine optimization” has arisen as a new means of optimising a website’s content to boost visibility on AI-driven searches, and as ChatGPT begins integrating real-time information, the use of such tools for holiday searches is likely to increase.
AI + Data = ROI
In my recent conversations with travel companies of various sizes across multiple verticals, it was clear that the biggest obstacle is not in using generative AI itself; it is having a solid foundation of data to fuel the AI. Having the right CDP, as well as the right processes and internal skillsets, will be imperative if your business wants generative AI to actually add value.
It’s also critical that due consideration is given to how customer data can and will be used in a responsible manner, and in a way to which customers will respond positively. We are all well aware of the major problems with offers based on data customers didn’t realise was being tracked or measured (like this famous case from Target – a fascinating case study).
Conclusion:
As I put together the agendas for our Digital Travel Summit and Digital Travel Connect conferences, I spend hundreds of hours a year just speaking to travel leaders asking them what opportunities and challenges are front of mind for them.
Generative AI has, generally, not come up with as much urgency as it did a year ago - it now comes with is perhaps a healthy dose of scepticism. When I do encounter it in my research today, it comes with this caveat: “I really want to see a use case that actually shows ROI”.
Whether the brands forging ahead in the generative AI arena will see an ROI considered substantial in just a couple of years is difficult to say. The impact is likely to be substantial in the long term.
Most importantly, the willingness to experiment and the drive to remain innovative, rather than the use of specific technologies themselves, may be what propels brands like TUI far ahead of the pack for years to come. As we have learned over the past few years, it has been the first movers with respect to data and technology, like OTAs, that have gained more market share.
Hear more industry perspectives on generative AI on Day 2 of our upcoming Digital Travel Summit - click here to get more information.
