The Power of AI in Travel: A Look at How Artificial Intelligence is Shaping the Future of Tourism Generative AI offers travelers a more personalized experience that puts them in direct contact with the right services and products and helps to make the entire journey more seamless.

After nearly three years with travel restrictions and border closures due to the pandemic, last year saw the traveling industry start to return to normal levels.

Amid the pent-up travel demand, more than 900 million tourists made an international trip last year. Although the figure only represents 63% of pre-pandemic levels, estimates by the United Nations World Tourism Organization predict that tourism could considerably improve, approximately reaching 80% to 95% of pre-pandemic levels in 2023.

The growing potential of full recovery has prompted the industry to improve and adapt new technology to meet traveler needs and cope with increasing demands. With the introduction of several advanced systems, including Artificial Intelligence (AI), travel agents are now able to closely monitor traveler trends and enhance the overall travel experience from booking to checking in.

What is generative AI?

In recent years, an overarching branch of technology that has changed how consumers and travelers plan their holidays is partially due to the growing development of generative AI.

Generative AI is a broad term that refers to several categories of AI algorithms that can help to generate new texts, images, audio, code and synthetic data. These outputs are delivered through deep machine learning networks that use a wide range of data points to compile and deliver different outputs based on the request.

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Perhaps the most notable trend in generative AI is the recent release of ChatGPT. The ChatGPT model uses language input models that can help to answer questions, and assist with different language or text-based tasks, including composing emails, essays and code.

Initially launched in November 2022, ChatGPT managed to garner more than one million users in five days, making it one of the fastest-growing applications by user growth.

Generative AI In travel

AI and its components are nothing new to the travel industry. Research shows that 30% of hospitality and similar companies are already using some form of AI to help them improve sales, websites, and product personalization.

We already see this sort of technology in travel with advanced personalization, AI travel assistants, AI-driven applications for flight forecasting, chatbots and direct online messaging, and data analysis that monitors travel trends.

As these and other systems mature as the industry recovers, providing real-world solutions for travelers and companies, how can generative AI become the next disruptive tool that helps to improve the travel experience and creates more personalized travel adventures?

Automated booking upgrade processing

It's estimated that in 2023, roughly 700 million people will be booking online. And around 83% of American adults that plan to travel this year, will book their trip through an online platform or portal, according to ReadWrite.com.

Generative AI provides direct and seamless communication, and for companies in the travel and leisure industry, this presents them with an opportunity to utilize direct and targeted messaging to reach the right consumer market at the right time.

Instead of relying on prompted digital ads and banners on websites, companies will now be able to direct communication with several different audiences at the same time. This will be more prevalent among companies in the airline, cruise, and hotel industries, offering customers an upgraded experience at any given touchpoint.

Generative AI will reach customers using the words and language most associated with the customer journey. This would take big data analysis to a whole new level, where companies can reach their customers with language segments associated with their travel experience.

Building Better Customer Loyalty Programs

Answering customer needs, and providing the right solutions can help companies turn paying clients into loyal followers. As part of their efforts to build a more tactile customer loyalty program, that effectively utilized customer data to profile travelers, generative AI will be able to create a full portrait of the traveler.

Through these efforts, booking sites and travel aggregators will have an informed view of their customers and can predict when a traveler becomes increasingly disengaged from the loyalty program. This could help them prompt new or different deals and marketing campaigns that can help keep travelers engaged and interested.

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As more data is collected from travelers, companies can formulate personalized rewards and incentives, helping to increase customer engagement accuracy. These efforts are already active with the use of chatbots and direct messaging on websites, which is a common way for businesses to resolve customer problems and answer queries.

Better experiences and more personalized targeting would help to automatically increase overall customer involvement, leading to more loyal supporters and travelers.

Direct marketing communication

As more customer data is compiled, it will be easier to deliver targeted marketing communication efforts to customers based on their experiences and interactions.

In the travel industry, generative AI will be able to use these algorithms to build a more personalized travel itinerary for customers based on their needs and direct language input. This would mean customers will automatically be placed in a loyalty program dedicated to similar products and services.n

Instead of having customers search for a specific destination only to review the results and never return, generative AI will target these customers based on their interests and provide them with a more informative itinerary

These AI models can deliver direct marketing communication to any customer, allowing companies to offer the right set of products or services to customers throughout the entire journey.

Virtual customer services

Most of the customer service these days is resolved online through email, direct messaging or ChatBots. These applications have allowed businesses to have direct contact with the customer at all times and ensure that when a problem occurs, artificial intelligence can use core language processing to resolve any grievances.

The next step would be to introduce a more humanoid or robotic customer service experience, eliminating humans from the chain of interaction and allowing AI to generate possible customer solutions.

In some instances, researchers have found that travel and leisure entities such as hotels, restaurants, and booking sites are completely digital, minimizing the need for human contact and delivering constant on-demand service.

In the travel industry, customer service cannot be ignored. Research shows that around 81% of customers that had a positive customer service experience are likely to make another purchase. Around 76% of customers want to interact or talk to a company representative upon contacting a company.

This is where generative AI becomes important to oversee and analyze customer experience only, presenting them immediately with the right information they require and resolving possible issues they may encounter along the way.

Planning And booking assistance

Paired with the importance of virtual customer service, and dedicated online communication — assisted planning and booking is another category where generative AI can be applied.

Companies are already experimenting with different ways to deliver the right products and services to travelers throughout their planning and booking journey. With the assistance of generative AI, customers will, in most instances, have on-demand access to the services they need and desire.

Travelers booking holidays will be automatically directed to several different experiences or excursions at their destination. They will be offered hotel and car rental deals, discounts and loyalty program offers specifically tailored to their holiday needs.

There will be increasing direct communication efforts between companies and travelers through mobile messaging apps such as Whatsapp or Facebook Messenger to help keep customers informed about upcoming trips, reservations or any possible changes.

Adapting to the traveler's itinerary will mean that chatbots on booking sites will immediately deliver answers or results related to specific queries. Customers will no longer need to contact a service desk, as all the information they require will be available to them on demand.

The bottom line

It's quite interesting to think how much AI has already done for the travel industry. With new software and technology, travel companies can direct their efforts towards a more empowered and improved customer journey, from planning to booking to checking in.

Generative AI offers travelers a more personalized experience that puts them in direct contact with the right services and products and helps to make the entire journey more seamless. Providing customers with the right options shortens their time spent planning and booking and can also help create more loyal and trusted customers in an industry bound for recovery.