Microsoft Bets on Artificial Intelligence to Help It Succeed Again in Travel

With the exception of helping create Expedia, Microsoft has struggled to figure out travel. But it is hoping that artificial intelligence (AI) will be its route finally to leapfrog ahead of Google and Oracle, playing a larger role as middleman.

The example illustrates the company’s current approach to the travel sector. The technology giant appears to be more interested in building “middleware services” that sit between customers and travel companies.

The company has a mixed past record of engaging with consumers on its own. For example, in 2008, it bought an airfare prediction website called Farecast for $115 million and integrated it with its flight search results on its Bing search engine. But that project, along with the MSN Travel mobile app, didn’t gain traction with consumers.

The company’s focus now is on the new AI and cognitive computing layers that it predicts are going to disrupt travel. By 2018 half of all consumers will interact with cognitive computing, thanks in part to the spread of AI-powered platforms like Amazon’s Alexa, Apple’s Siri, and — of course — Microsoft’s Cortana.

Microsoft says 145 million people use Cortana at least once a month. But that definition of “use” is fairly light, and the voice assistant is not yet ingrained in the habits of consumers enough to be a go-to when it comes to, say, travel search.

Stuart Greif, senior executive, Travel/Hospitality, QSR, and Transportation Industry Solutions at Microsoft, has been out on the industry circuit, sharing the company’s predictions about where travel technology is headed. Most recently Greif spoke last week at a conference in San Francisco run by venture capital firm Thayer Ventures, where Skift saw his presentation first-hand.

Greif says, “We’re not looking to build the next great travel platform. Our message to the travel industry is that we want to partner on delivering solutions.”

It has targeted several sectors of the industry, but its chances seem better in some than in others.

Voice-enabled internet changes the travel search game

Mobile apps may be replaced by voice-activated internet, Greif says. “We think the app world is going to go away. People can debate that, but why do you need to go in and out of a dozen different travel apps by touch if you run nearly everything on your device by voice command?”

Greif argues “bots are really the new apps…. Let’s say you often book hotels for business travel You don’t want to have to re-enter your information at every new hotel site or travel agency you use….”

“Our view is, I’m going to have a bot on a system like Skype or Cortana or Alexa or Siri, and Marriott is going to have its own bot, and Marriott is going basically ask me, would you like to check in? And my bot’s going say, ‘Hey is it okay to provide these details?’ My bot is going to say, ‘Yes Cortana, please give the information.”

Greif says the rise of voice-activated search may upend the direct booking wars between suppliers and third-parties.

“When you search for travel queries on a voice-powered platform, who owns that search?” asks Greif. “Is it Google? Is it Siri, Alexa? Is it Cortana? If artificial intelligence can look across the entire spectrum of everything that’s available and choose what to bring it back as relevant, whose is it bringing back? Is it bringing back brand.com? Is it bringing back the OTAs?

Greif conceded he didn’t have answers to the tantalizing questions he raised. And while the company’s Cortana is often seen as superior technologically to voice assistants from Google, Apple, and Amazon, there is a marketing and commercialization effort that needs to go along with the technological work to enable Microsoft to become a vital part of travel distribution.

As of today, Cortana doesn’t known many travel-specific commands.

What’s more, if it chooses to compete in the battle to funnel travelers to booking options, it needs to catch up to rivals by rapidly developing more third-party speakers that support Cortana. It’s prevalence via the Windows platform has not, so far, seemed like enough. Otherwise, Google, Apple, and Amazon may outpace it in having physical platforms distributed worldwide, making the questions Greif poses about who owns search moot.

A year ago Microsoft invited travel companies to build bots on its Skype messaging service, to enable the brands to automate many parts of their customer interactions. But brands like Kayak, Expedia, Hipmunk, and Cheap Flights, have ignored it, focusing instead on Facebook Messenger’s platform. The exception is Skyscanner, whose Skype bot (co-built with Microsoft) included a group search functionality.

It’s not hard to wonder if a similar fate awaits Cortana unless Microsoft adjusts its ground game in travel.

What AI means for travel enterprise software

Microsoft translator can translate speech across nine languages in real time in sixty languages, via text input. But it is still some years off from real-time translation happens via speech.

Speech recognition could, in theory, someday replace airline gate agents and hotel front desk clerks, by capturing and processing requests, reducing error rates. As of today, the speech recognition is possible, but not the ability to send commands into travel company systems, Greif says.

Visual recognition could, in theory, replace airline agents who need to match faces with photo identification for, say, allowing a bag to be checked in for a flight. Already Microsoft says its computers are better at matching faces than humans are, on average.

Playing the long game

How long does Greif think it takes for AI to be able to actually have the business logic down that’s required for people to do things like search and book an itinerary that might be complicated?

“I think the search part is the easy part,” he says. “It’s all the back-end integrations and business decision-making that’s gonna take awhile.

As an example, an unnamed “large hotel chain” recently gave Microsoft links to five different frequently asked questions as part of a project to create a demonstration of how an automated, chat-based customer service interface might work.

It only took Microsoft’s developers and machines 10 minutes to read the content and come up with an interface that could provide those answers to a wide away of question phrasings.

But Greif says “bookings are more complicated.” He believes the industry will start putting these solutions into production within about five years’ time.

Despite Microsoft’s ambitions with Cortana, it has less experience in the quirks of travel marketing and distribution of its competitor Google.

It seems more likely to gain market share by providing truly business-to-business enterprise services to hotels for operations. Last year Microsoft began demonstrating its concept of the connected hotel that used next-generation guest experience management system iRiS and next-generation “hotel operating system” that acts as “middleware” for interpreting data in operations and finance.

Greif says the key issue for hotels is aligning all the systems in a guest room and the back office so that they are all participating in real-time. Right now the systems aren’t connected to know when water pressure is not working or the TV is not working and so the company can’t get ahead of customer complaints with predictive maintenance.

But the company’s active demonstrations with travel suppliers suggest that it poses a significant competitive threat to today’s largest hospitality tech providers, such as Oracle, and airline providers, such as Amadeus in partnership with Accenture.

Artificial intelligence is an authentic game-changer

Whether Microsoft is a victor or not in the AI race, Greif seems persuasive on his larger point that the arrival of high-powered computing in the cloud, more sophisticated computer algorithms, and the popularization of mobile, internet-connected devices is finally ushering in the AI era.

Platforms that can support AI are truly being popularized now, which means that hotels, airports, and airlines are increasingly powered by artificial intelligence. So there is some merit to the buzz.

The platforms are getting better at recognizing spoken queries and at helping to categorize various types of knowledge so as to deliver relevant and intelligent responses within particular areas of focus for a specific task or sets of tasks.

For example, in speech recognition, Microsoft had a historic achievement last year. It achieved parity in speech recognition accuracy with humans. That doesn’t mean its computers hear perfectly, but it hears just as well as humans do.

That said, the hype machine is on overdrive, Greif concedes. He notes that a few years ago every startup pitch described itself as a data analytics company, and “today every startup claims to be in AI.”

In the meantime, Microsoft is claiming it has a new company culture that will enable it to adapt to the new, fast-changing circumstances. Greif says, “It’s a whole new Microsoft. It’s a much more open company now. I get to keep my iPhone, and that’s always nice.”