Artificial intelligence (AI) could majorly impact the tourism industry. Will holiday recommendations and personalized excursion suggestions become the norm? What does this mean for the employees?
According to TUI manager Pieter Jordaan, generative artificial intelligence (AI) will majorly impact the tourism industry. “Those who use the technology will be faster and more productive than those who do without it,” said the travel group’s CIO (Chief Information Officer).
Generative AI that can generate new content will very quickly replace tasks. This also has consequences for the end users. “This will fundamentally change how people plan and book their trips in the future.”
Will employees become redundant?
Jordaan explains that in the future, employees in travel agencies could use AI to advise customers. “Generative AI will very quickly replace tasks, but not jobs,” the company says. The so-called generative AI, which also includes text robots such as ChatGPT, can create new content based on existing information and specifications from a user.
In Great Britain, TUI now uses the text robot ChatGPT in its app. Around half of customers have been able to access the offer in a test so far. ChatGPT uses generative AI to provide users with personalized excursion suggestions and answer questions about vacation destinations. The demand for the offer is higher than expected, with more than 10,000 users.
“Human gut feeling is irreplaceable.”
According to the organizer Schauinsland-Reisen, qualified specialists will remain essential. The company is currently using ChatGPT on a test basis. The software helps, for example, with creating customer newsletters. “However, AI cannot replace the experience and expertise of our specialists ; it can only serve as support,” said a Schauinsland dialect.
An AI like ChatGPT could simplify and automate individual time-consuming workflows in the long term. “The human gut feeling when putting together our products cannot be replaced by AI,” said the neutral. A fully automated use of ChatGPT is out of the question for Schauinsland in the future.
The industry association DRV also assumes that travel professionals will not become superfluous: the experts in travel agencies know their customers’ wishes and preferences well and make tailor-made offers. “Today, AI cannot offer this content with all the expert tips that are not freely available on the Internet.”
Customer data will not be passed on.
The travel company TUI is planning to use AI not only in Great Britain. In the future, customers in Germany will also be able to use the text robot in the app. “If all tests are successful and we are satisfied with the safety, we aim to bring the product to market by the end of the year,” said Jordaan. Several travel companies in Germany already use ChatGPT for various applications.
To prevent incorrect answers from ChatGPT, TUI has reportedly taken precautionary measures in the app. This allows answers to be checked before they are shown to customers. The company pays a small fee for each request, said the CIO. At no time does TUI pass on customer data when ChatGPT is used in the app?
Personal customer contact remains essential.
DER tourism top manager Mark Tantz (COO Central Europe) sees opportunities to cushion the shortage of skilled workers. Automation – whether superficial or artificial – is a way to relieve employees of simple tasks so that they can, for example, concentrate on more exciting activities. “This is a relevant topic, especially when there is a shortage of skilled workers,” said Tantz.
The specialist travel provider Chamäleon Reisen, which has been using ChatGPT for accommodation descriptions on its homepage since this year, continues to attach great importance to a direct customer connection. “We continue to consciously focus on direct contact with our customers. They should continue to be able to reach those responsible for individual destinations directly in the future,” reported Ingo Lies, founder of the sustainable travel organiser.
The travel group Alltours sees it similarly: “Personal contact with our customers remains important to us, which AI cannot replace.”
Nowadays, travel companies often boast about their use of AI. They heavily promote new tools and sometimes even rebrand themselves as AI companies.
However, some industry insiders believe that it’s mostly exaggerated.
Executives from three hotel tech companies – competitors Cloudbeds, Mews, and Stayntouch – all shared their opinions on the excessive attention generative AI is receiving.
All three companies primarily focus on their property management systems, which handle hotel operations such as check-in and check-out.
Too Much AI Hype: ‘There’s No Silver Bullet’
Harris from Cloudbeds thinks that hotel tech companies excessively promote AI tools that aren’t as remarkable or unique as they claim.
According to Harris, Cloudbeds has been using AI since its inception, but the company hasn’t actively marketed it.
He mentioned that Cloudbeds’ services include AI tools such as automatic translation, content generation for advertising, and AI-generated drafts of responses to customer reviews. However, Harris believes that these are not groundbreaking. He remarked, “I don’t think that’s cool. That’s commodity.”
Harris expressed his opinion that over the next three years, there will be a lot of AI hype but not much substance. He believes that while some AI advancements are impressive, they are not the ultimate solution. He emphasized, “There’s no Holy Grail. There’s no silver bullet.”
Furthermore, Harris stated, “Are we playing with ways that we can bring the magic front-and-center to hoteliers? 100% We have a really good team that is playing with new forms of AI.”
Not Much AI Innovation
Mews recently unveiled some AI-powered products, including an enhanced search feature that allows hotel staff to ask questions in plain language and receive suggestions based on past stays and real-time data.
Valtr from Mews expressed surprise at the general lack of announcements from hotel tech companies, particularly during the recent major industry convention, HITEC.
According to Valtr, “What’s annoying is how little everyone’s actually done in terms of actual interesting innovations.”
He added, “This is an industry where generative AI would really work. [Property management systems] are basically the main data systems of record.”
Where AI Is Most Useful
Stayntouch is organizing its first AI hackathon, focusing on automating internal tasks. The company’s priority is on internal uses, such as a new tool to expedite customer service staff’s access to resources.
Messina from Stayntouch stated, “We get asked a lot about how we’re using AI, and people are looking for a lot of guest-facing interactions for it. We’ve decided to take a little bit of a different approach instead of just dropping dot-AI at the end of each of our product names, like a lot of folks are doing.”
Moreover, Messina shared his perspective that AI can free up employees from repetitive tasks, allowing them to focus on creating innovations based on their software hospitality background.
When it came down to it, Google didn’t want to anger its core customers — advertisers — and this week announced it won’t phase out third-party cookies in its Chrome browser as planned.
These cookies enable companies to track and target consumers across other websites. For example, Expedia can send potential customers an ad when it sees them shopping for luggage on Amazon, or Hilton can offer discounted stays to potential customers who may have been visiting Marriott.com.
Knowingly or not, consumers often agree to enable the use of third-party cookies as trackers when they visit websites. Google’s decision to retain these ad trackers reversed a 2019 pledge to phase them out.
Apple provides users of its Safari browser with the ability to block third-party cookies and limits tracking capabilities. Firefox allows users to decide on how to restrict them.
During its earnings call on Tuesday, Alphabet CEO Sundar Pichai announced that its Google brand will enhance users’ privacy options but will not eliminate cookies. Pichai stated, “On third-party cookies, given the implications across the ecosystems and considerations and feedback across so many stakeholders, we now believe user choice is the best way forward there.”
In addition to advertisers, some competition authorities suggested that removing third-party cookies might restrict advertising competition.
What implications does Google’s decision on cookies have for Travel Marketers?
We asked individuals across the travel, marketing, and venture capital industries what impact Google’s change of heart on cookies has for travel marketers.
Seth Borko, Skift Head of Research
Seth Borko, head of Skift Research, stated that Google’s choice to continue using third-party cookies will benefit smaller travel advertisers as larger companies were already developing methods to utilize their own first-party data to monitor consumers in case cookie capabilities disappeared.
“I think this change comes too late to make a difference,” Borko said. “Large companies have spent a lot of time, money, and energy investing in first-party data strategies, and it’s probably too late to reverse that, regardless of Google’s actions. First-party data is extremely powerful and can be utilized for tasks such as training AI models and creating personalized offers and digital experiences.”
He mentioned that Google’s decision “won’t alter the current situation” because major players are continuing to invest in first-party data “in the hopes of gaining an AI and personalization advantage.”
Brian Harniman, Vice President of Strategy at From
Brian Harniman, vice president of strategy at digital agency From, expressed frustration with a Google statement indicating that the decision was made to enhance consumer choice in advertising and to protect privacy rights.
“ I think it’s an acknowledgment that they’re obligated to their big advertisers—travel brands or otherwise,” Harniman said, referring to Google. “These individuals need to continue to comprehend attribution, and all the third-party cookies make it simpler to do that. Using them makes it easier to purchase retargeted media through Google across the web as well.”
He also suggested that perhaps the decision demonstrates that Google’s native advertising products, such as Google Flights and Google Hotels, “are not advanced enough to absorb all the revenue loss if the travel advertisers rebelled.”
Amber Carpenter, Senior Vice President at Vtrips
Amber Carpenter, senior vice president of product and marketing at vacation rental property manager Vtrips, doesn’t view Google’s reversal as very impactful on travel brands.
“Privacy laws that require consumers to be given a choice about cookie tracking means that knowledgeable teams will still need to implement a first-party solution and data modeling to obtain a holistic view of consumer behavior, conversion, and ROI,” Carpenter said.
Gilad Berenstein, Founder at Brook Bay Capital
Gilad Berenstein, founder of the venture capital firm Brook Bay Capital, stated that Google’s decision is beneficial for travel marketers in the short term “since most businesses in our industry are not prepared for a post-cookie future.”
Nevertheless, he admitted he is a proponent of “getting rid of the cookie” as it would have compelled companies to innovate in “finding a better way of understanding customers and marketing to them.”
Berenstein noted that there is a lot of “overlooked data,” including first-party data, “that savvy entrepreneurs and product people will be able to interpret and use to their advantage.”
Currently, AI’s impact extends across various industries, including travel and tourism. As customer expectations evolve and competition intensifies, businesses are adopting AI-driven software to transform their operations.
There are many instances of AI’s influence on the travel industry. This includes providing personalized experiences for travelers and streamlining operations to improve efficiency, injecting new dynamism into the sector. This article aims to delve into how AI is reshaping the travel and tourism industry, highlighting its potential to drive growth.
The travel and tourism industry is a fast-paced, dynamic sector with significant opportunities and formidable challenges. Evolving consumer demands, constant competition, and ongoing global events have made innovation and adaptability crucial for survival and growth. Recognizing this, businesses are increasingly turning to advanced technology, such as AI, to remain competitive and meet modern travelers’ expectations.
AI, with its ability to analyze large amounts of data, predict trends, automate tasks, and deliver personalized experiences, has the potential to address many of the industry’s current challenges.
To mitigate these challenges, AI can provide numerous benefits to the travel and tourism industry. Let’s explore some of them now.
Optimizing employee management and scheduling is a critical way AI is transforming the travel industry. Businesses in the travel sector are leveraging AI’s predictive capabilities to allocate resources efficiently, ensuring optimal staffing levels and enhancing operational efficiency, and customer satisfaction.
Another significant change brought about by AI is the rise of AI assistants and intelligent chatbots, which have revolutionized customer service in the tourism industry. These digital tools have transformed the role of traditional travel agents, enabling travelers to book flights, accommodations, and vehicle rentals online with ease and convenience.
AI’s impact on the travel industry also extends to baggage and luggage tracking. With AI, airlines can track and manage baggage more efficiently, addressing a significant pain point for travelers and improving the overall travel experience.
AI-powered navigation systems are also creating innovative changes in the tourism sector, making it easier for travelers to navigate unfamiliar cities and enhancing the sightseeing and exploration experience. Furthermore, AI-powered chatbots ensure fast response times, providing round-the-clock support and improving customer service in the tourism sector.
Looking ahead, the role of AI in the travel and tourism industry appears set to expand. The technology’s potential extends beyond current applications, promising a future where travel becomes even more personalized, efficient, and growth-oriented.
One potential future application for AI is hyper-personalization. As AI algorithms become more advanced, they will be able to offer even more tailored recommendations, anticipating travelers’ needs and redefining customer expectations for personalized experiences.
In terms of operational efficiency, AI could automate even more aspects of the travel and tourism industry, leading to unprecedented levels of efficiency and cost savings.
Ultimately, AI’s predictive capabilities will continue to evolve, allowing businesses to make strategic decisions with greater confidence and driving growth and profitability.
This discussion regarding AI’s future impact on the travel industry reveals a future where AI becomes an integral part of the travel and tourism industry, driving innovation and growth. While the exact nature of these changes remains speculation, one thing is clear—the journey toward an AI-driven future in the travel and tourism industry has only just begun.
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AI plays a crucial role in driving post-pandemic growth in travel and tourism.
Artificial intelligence is revolutionizing the way businesses and entire industries, including travel and tourism, conduct operations. Companies in sectors such as airlines, hotels, attractions, and booking platforms are utilizing AI for various purposes, including gathering and analyzing customer data to anticipate behavior, provide relevant recommendations, personalize services, and improve customer experiences.
Developments in AI, such as generative AI and machine learning (ML), are prompting the industry and consumers to reimagine the process of planning, booking, and engaging in travel. Businesses must reconsider how they create and promote their offerings, interact with customers, and manage their operations.
AI is being used by travel and tourism companies to automate and optimize customer service, enhance customer experiences, and operate more efficiently. AI-driven technology is present in various aspects and functions, such as trip planners, booking platforms, check-in systems, automated baggage handlers, smart hotel rooms, face ID security, front desk robots, and virtual tour guides.
AI-powered analytics are employed to gather and analyze data on customer preferences, predict behavior, make recommendations, and personalize services, such as hotel room temperature, lighting, and entertainment.
The COVID-19 pandemic heavily impacted the industry due to social distancing guidelines, travel restrictions, passport and visa delays, mandatory quarantines, and other measures. Today, inflation and rising travel costs present new challenges.
However, travel and tourism remain one of the largest global industries and are expected to continue expanding as transportation systems improve, remote work allows for more travel, and younger generations prioritize investing in memorable experiences over material possessions.
The global travel and tourism market.
Determining the size and growth of the industry is complex because it encompasses many sectors, including transportation, accommodations, attractions, and travel agencies. Therefore, data and statistics can vary.
According to the World Travel & Tourism Council (WTTC) 2023 economic impact research, the global market is projected to reach $9.5 trillion this year, only 5% below the 2019 pre-pandemic levels. The sector’s contribution to the gross domestic product is expected to grow to $15.5 trillion by 2033, representing 11.6% of the global economy and employing 430 million people worldwide, nearly 12% of the working population.
In the U.S. market, the industry is forecasted to reach $3 trillion by 2033, encompassing spending in-country by international visitors and citizens’ expenditures on their own travel abroad, according to WTTC research cited by Bloomberg.
Statista data indicates that the global travel and tourism sector grew by approximately 41% in 2022 compared to the previous year, after a significant drop at the start of the pandemic, but it remained below the pre-pandemic peak at $2 trillion. It’s expected to reach nearly $2.29 trillion by the end of 2023, exceeding the 2019 reported peak.
Research and Markets, in its 2023-2028 forecast, reported that the global leisure travel market size reached $804.4 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 8.75% to $1.33 trillion by 2028.
Future Markets Insights predicts that the global tourism market will expand at a CAGR of 5% to $17.1 trillion in 2032, while the International Air Transport Association estimates it will surpass $8.9 trillion by 2026, growing at an estimated CAGR of over 3.1% from 2021 to 2026.
Based on these projections, the global travel and tourism market is anticipated to be valued between $15.5 trillion and $17.1 trillion by 2032 or 2033.
Travel and tourism in Puerto Rico.
Historically, Puerto Rico’s tourism industry has been a significant contributor to its economy, generating employment and accounting for somewhere between 2% and 10% (data varies widely) of the island’s GDP of about $113.4 billion (World Bank, 2022).
According to data from WorldData, Puerto Rico received approximately $2.8 billion from tourism in 2021, which accounted for 2.5% of its GDP and roughly 15% of all international tourism earnings in the Caribbean.
Discover Puerto Rico reported that the travel and tourism industry has experienced significant growth post the COVID-19 pandemic, surpassing the U.S. mainland and other Caribbean destinations. The local destination marketing organization anticipates that 2021, 2022, and 2023 will be the most successful years in Puerto Rico’s tourism history in terms of visitor demand, lodging profitability, tourism tax revenue, and hospitality employment.
Earlier this year, Discover Puerto Rico announced a record-breaking 2022, citing increases in revenue, incoming traveler numbers, and employment within the industry. The organization also shared the following findings:
- Over 5.1 million passengers arrived at Luis Muñoz Marín International Airport in the previous year, reflecting a 6.5% rise from 2021.
- The revenue from travel and tourism reached $8.9 billion, marking a 39% increase over the previous high in 2019.
- Around 91,500 individuals were employed in travel and tourism-related positions, the highest figure ever recorded in Puerto Rico, up by 12.8% from pre-pandemic levels.
- Group room nights doubled from 2021.
- The final quarter set a record, with lodging demand being 7% higher than in 2021 and 31% higher than pre-pandemic levels.
- Further growth is anticipated, with the WTTC projecting a 156% increase in tourism spending in Puerto Rico by 2032.
AI is expected to contribute to this growth.
It is projected that AI and e-commerce will drive a portion of this expansion.
According to Statista, online sales are expected to generate 74% of global revenue and 71% of U.S. revenue by 2027. The rapid integration of AI, big data analytics, and the internet of things (IoT) in the tourism industry is propelling the market, as noted by R&M.
R&M stated in its report “Artificial Intelligence (AI) in Travel and Tourism” that “AI is emerging as a crucial factor in the travel and tourism sector, transforming various aspects of the travel journey, from inspiration to the overall experience. AI’s role in the sector is expected to grow significantly by 2030.”
A report by global management consulting firm McKinsey, titled “The Promise of Travel in the Age of AI,” attributed the anticipated growth in travel to ongoing corporate travel recovery and consumer demand for unique experiences. The report anticipates that travel will grow at an average rate of 5.8% annually through 2032, more than double the expected growth rate of the overall economy, which is 2.7%.
At the time of publishing, News is my Business had not received data and insights from local organizations regarding AI’s impact on Puerto Rico’s travel and tourism industry.
There is still a demand for travel agents.
Despite the predicted growth of AI in the industry, there is still a need for travel agents. The travel disruptions caused by the pandemic have led travelers to rely on agents to plan and book their trips.
The process of planning and booking a trip, especially a complex one, demands time and effort that many individuals with busy lives do not have. According to a 2023 American Society of Travel Advisors (ASTA) consumer survey, 50% of travelers are now more inclined to use a travel advisor than in the past. Additionally, over half (54%) agreed that “a travel advisor can alleviate some of the complications related to airline fees.”
Travel agents are responsible for nearly 77% of total cruise bookings, 55% of air travel bookings, and 73% of travel package bookings, as reported by Travel Technology & Solutions, a provider of travel agency technology.
The U.S. Bureau of Labor Statistics projects that employment of travel agents in the U.S. will increase by 3% from 2022 to 2032, a rate similar to the average for all occupations.
What impact does generative AI have on the tourism industry?
Generative AI is also equipping destinations with powerful marketing tools. A recent campaign by Visit Denmark reimagined iconic artworks through the use of artificial intelligence for both scripts and visuals. Kathrine Lind Gustavussen of Visit Denmark states, “While it felt somewhat risky to entrust our messaging entirely to artificial intelligence, we are thrilled to be at the forefront of the industry, leveraging cutting-edge technology to bring our vision and message to life.” She also mentions that all scripts were entirely generated by AI, with only the removal of excessively lengthy or inaccurate parts. While impressed by the copy produced by ChatGPT, she noted that some sections appeared repetitive, mechanical, and superficial.
The limitations of ChatGPT are evident, as the output often lacks the authenticity and warmth of human effort. It is essential for travelers relying on its capabilities to be aware that the most recent version is based on data up to 2021 and lacks access to critical real-time information such as airline schedules and weather forecasts.
Since these models are trained on vast amounts of existing data, they can also produce unreliable information. Mattin highlights that any AI model’s responses can reflect existing prejudices and assumptions found online, potentially perpetuating inherent bias. However, with training on more current and extensive information, and subject to scrutiny and feedback, it is assumed that these tools will become more intelligent and nuanced.
While ChatGPT has been in the spotlight, artificial intelligence has been shaping the travel experience for years behind the scenes. Various businesses in the travel industry, such as hotels, airlines, casinos, cruises, and car rental companies, have been utilizing AI or machine learning to analyze data, power booking systems and chatbots, and automate financial processes.
With the addition of ChatGPT functionality and the growing interest, investment, and innovation in this field, Tom Kershaw, chief product and technology officer at retail platform Travelport, believes that AI has the potential to revolutionize the travel industry in two key areas. “The first is personalization—using data and predictive analytics to offer the perfect deal to the traveler at the right time,” he says. “The second is automation—reducing the time required to modify a ticket, cancel a ticket, reroute a traveler, or adjust an itinerary.
As staff continues to be in short supply and travel demand continues to outpace supply, replacing routine human tasks with automation is not only desirable but essential for the continued growth and relevance of the travel agency community.”
Striking a balance between human and machine is Scenset (formerly Origin), a travel companion app that provides personalized luxury itineraries to members through human “curators” equipped with in-house tools powered by artificial intelligence. Founder Eli Bressert explains, “This synergy creates a high-powered service tailored to the nuanced preferences of our customers. Our curators can focus on customers without being overwhelmed by complex factors such as scheduling, pricing, or managing preferences and needs.” Bressert also points out that the more the machines learn from customers, the more precise the service becomes.
How are hotels using AI?
In addition to intelligent online curation, artificial intelligence is also impacting the physical aspects of our travel experiences. Hotels, which generate a large amount of data daily, are increasingly employing AI to enhance their operations, reduce costs, and streamline customer service. AI’s transformative influence is evident in dynamic pricing based on real-time market insights, personalized automated emails, efficient check-in processes, and room monitoring and adjustments.
Additionally, there is the idea of a robot concierge. Previous efforts haven’t always been successful (only four years after the Henn na Hotel in Japan introduced AI staff in 2015, about half of its nearly 250 robotic dinosaurs that welcomed guests were let go), but after the pandemic, it is likely to become more common. A study by the American Hotel and Lodging Association in 2020 found that 85 percent of travelers were more comfortable using technology to minimize direct contact with hotel staff.
In the Gorafe desert in southern Spain, the pioneering off-grid pod-tels by District Hive showcase a different view of the future, with each self-sustaining accommodation providing guests a high-tech, human-free experience through a custom mobile app that manages everything from unlocking its doors to controlling lighting, sound, and interior fragrance, while also monitoring remaining energy levels, solar production, temperature, and water quality.
In Australia, the new 316-room Dorsett Melbourne takes it a step further, employing AI-guided robotic cleaners to help behind the scenes, following the example of its Gold Coast counterpart, where robots are used at check-in. Saudi Arabia’s new Neom development, which includes numerous cities and resorts, has turned into a competition between hotel brands striving to surpass each other with AI-driven innovation.
Robots are also being introduced in airports, with over 200 set to be deployed in Dubai. These multilingual companions utilize portable robotics and facial recognition to expedite passenger check-ins, reduce wait times, and guide travelers through the world’s busiest international hub. A short distance away, Istanbul Airport has established itself as a smart-airport trailblazer since its opening in 2018, integrating AI throughout all its processes, with traveler flow measurement, biometric scanners, intelligent chat with 24-hour support, and augmented reality, all contributing to reducing queues and wait times.
This will only further progress as facial recognition technology becomes more integrated, with the world’s largest airline alliance, Star Alliance, urging half of its member airlines to implement biometrics by 2025.
Finding the Right Balance
The more companies embrace AI models to manage, analyze, and harness large datasets, the greater the potential for change. “We’re just beginning to comprehend the impact of these language models, but the world could look very different in five years,” says Mattin, noting that AI provides “astounding” productivity gains, while also satisfying that, as with many industries, job losses are inevitable as the very principles that govern the world of work are redefined.
Our relationship with travel itself may also evolve as virtual reality, which has not gained significant traction until now, receives new momentum from generative AI, enabling travelers to construct their own online world. “We’re moving towards a place where you’ll be able to describe a virtual world and then proceed to experience it,” he explains. “These are becoming realms of significant human experience in their own right, and that is turning into a completely mind-bending new dimension of travel.”
Slightly less exciting, my Tuscan vacation will surely benefit from insights derived from ChatGPT. Nevertheless, despite hoping that its recommended wine festival and swimming spots actually exist, I’m also confident that – as travel has always done – chance encounters and my own awkward , word-of-mouth interactions with new friends will provide me with the most enduring memories of the trip.
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