Generative AI Holds First-Mover Advantage for Travel Agents and Tour Operators

The potential of generative artificial intelligence (AI) to produce personalized travel recommendations and itineraries, as well as on-point content for travel companies, is setting the travel sector abuzz. 

New travel products that would usually take weeks to plan and execute are now created in mere seconds with tools like ChatGPT. The neural-network technology owned by San Francisco-based AI research lab Open AI has been a primary catalyst for the intense focus on AI at the close of 2022.

Increased productivity and scale far beyond how humans can work on those goals are at the center of the debate and what it means for travel agents and tour operators looking to future-proof their business model.

From improved chatbots to digital assistants that act as concierge & tour guides for humans when in a location, the sector could certainly be poised for creative reinvention. 

First-Mover Advantage

“By the end of the year, you won’t be able to tell the difference between human production and AI production,” said travel industry consultant Peter Syme.   

“Every single tourism business, from a hotel to a tour operator to the most prominent companies, has access to the same power from a content production point of view. Therefore, tour operators should adopt quickly and not lag to ensure the biggest advantage.”

But there remains room for improvement with the technology. 

“It doesn’t do facts or specifics like dates and times or geolocation, but all of that stuff exists and only needs to be piped in. It’s the speed of learning that is off the scale,” added Syme. 

As a result, the adoption of AI is expected to be much quicker than the shift to the internet, even with the current weaknesses. 

Hybrid Digital Tours and Operational Cost Efficiency

With the relevance of travel agents seen during the pandemic when travelers valued human connection more than ever before, how does AI impact businesses beyond content production?

Travel agents can move beyond just selling the components of travel and sending people away, to extending service and loyalty with far less effort involved, suggested Alex Bainbridge, CEO of Autoura, a digital experience platform for real-world experiences.

AI tools allow agents to increase efficiency and extend value through itineraries and suggestions with minimal effort to ensure stronger relationships with their clients. However, he suggested refining and integrating it with real-time tour operators to create a hybrid digital travel product might be the solution. 

Instead of the cost associated with the expertise required for a five-hour tour, the tour operator would only oversee a two-hour niche in-person experience. The remaining three-hours of the digital-led itinerary would be created at minimal cost and flexible for the traveler to complete on their own.  

Ultimate Form of Personalization 

The proliferation of the consumer-led, on-demand digital experience is pretty close, according to both Syme and Bainbridge, with the adoption of mobile a strong case in point. 

A workable UX interface is all that is needed for the ultimate form of personalization, with a simple tap on your mobile while in a destination.

Generative AI tools can create personalized travel itineraries in real-time at scale. As an example, 1,000 different consumers could create a travel itinerary for Paris just as good as a travel company — but all according to their individual needs and tastes — and within seconds, added Syme.

“There isn’t a travel agent on the planet that can do that at the moment, not even Booking, Expedia or TripAdvisor.”  

Quality of Experience Remains Key  

Tour operators should ask themselves why a digital experience would need to be branded by a tour operator who designs and operates it, if at all. 

The way forward is anything but clear-cut. 

Digitally it will be hard to differentiate customers preferences that are not communicated, such as who has trouble walking long distances or food recommendations for a vegan customer.

Bainbridge stated digital experiences through generative AI would certainly create downward price pressure for a similar human-led tour with tour guides.

It could also see significant expansion into second-tier experiences, now commercially viable as a digital experience despite lower capacity and demand when compared to popular attractions.    

Change Talking to Doing in Your Experience

Syme added that there needs to be a marked shift in the quality of the experience beyond what can be replicated by AI. 

“If your experience is based around talking a lot and passing on knowledge, that experience is at risk. If I’m talking about all the great bakers, I’ll get them to do the baking. If I’m talking about the great artists they need to be painting because anything that’s just talking is going to become commoditized.”

Making Human Jobs Easier

In a far more sober approach, Dune 7 co-founder and digital strategy advisor Jared Alster said the industry should view this as an “added tool in the box to make human jobs easier.” 

It’s not a case of find and replace, but instead a case of finding and leveraging that technology in the best possible way, he added. 

“Tour operators are always gonna be relevant as well as agents. The people using tour operators and those using travel advisors by default are approaching travel planning from a different perspective than independent travelers. 

“They want something unique or special or exclusive, and they know that the way they get that is by going through an agent or by going through a local operator who has that local knowledge. That can’t be replaced by AI.” 

Alster did however suggest re-evaluating any existing AI, such as chatbots. 

“Now would be a good time to see if you can find something better for a more cost-efficient price with improved capabilities. It’s a tactical way to continue to leverage AI. 

As to what the adoption curve will look into 2023, remains wide open. Larger tour operators with budgets and the in-house expertise to understand AI better will likely take the most advantage in the months ahead. 

“They’ll certainly be faster than the mom-and-pop day tour activity operator who are far more operationally focused,” added Alster.  

“On the advisor side you could have the big consortia like Virtuoso and Signature looking at how to integrate some of these platforms into their operations. But if I’m an independent agent, I’ll be asking is this really going to impact my life in the next six months?” 

Still, some believe the impact of generative AI is as fundamental to society as the invention of electricity. It has certainly sparked the idea of an advanced digital experience platform through AI design, now more than a text prompt closer to reality.