Skift Take

While artificial intelligence (AI) can whip up a storm of automation and efficiency, the essence of travel lies in the good old human touch. Travel companies ought to tiptoe cautiously into the realm of AI, using it to bolster rather than banish human capabilities.

Even as more than 70 percent of its customer requests are currently handled by artificial intelligence (AI) chatbots, online travel company Group remains cautious about the commercial implementation of AI.

The company said it prioritizes reliability in its customer services and takes a prudent approach to ensure the best possible experience for its customers.

Designed to simplify travel planning and booking processes, the group launched its artificial intelligence assistant, TripGen on the app in February and plugin for ChatGPT in May.

“We believe with proper guardrails in place, artificial intelligence is not only able to unlock the business potential, but also speed up, scale up and boost up our existing user cases,” said Jie Sun, CEO and director of Group at an earnings call on Thursday.

Sun said that while they have been exploring the potential of artificial intelligence for better customer experience, they have also been experimenting with the AI tool to enhance operational efficiency.

The company has also been internally using generative AI technology to improve productivity in all functions, especially in marketing and engineering.

“For customer use service, generative AI can further improve our automation and customer experience. We will continue to explore ways to leverage generate AI technology to improve customer experience and productivity,” she added.

Domestic Travel Boom

Driven by the strong growth of the China domestic and overseas market, Group’s overall revenue for the first quarter of 2023 has fully recovered and topped the 2019 level.

For the first quarter of 2023, Group reported a net revenue of $1.3 billion, representing a 124 percent increase from the same period last year and an 83 percent increase from the previous quarter. Group reported that its domestic hotel bookings have surpassed the 2019 level by 60 percent, while outbound hotel and air reservations on its platform have recovered to 60 percent of the 2019 level.

The group’s adjusted earnings before interest, taxes, depreciation, and amortization for the first quarter of 2023 was $410 million, compared to $13 million for the same period in 2022 and $40 million for the previous quarter.

Xiaofan Wang, the chief financial officer and executive vice president of Group, highlighted the impressive performance of the domestic travel market during the May Labor Day holiday.

According to Wang, the group recorded a 19 percent increase in travelers compared to the same holiday in 2019, with air passenger volume surpassing the levels seen in 2019.

From a more prudent perspective, Group believes that the growth rate for China domestic travel may slightly slow down after the summer and National Day holiday based on seasonality.

Outbound Travel Recovery

The online travel company noted that even as the demand for outbound has far exceeded the 2019 level, limited international flight capacity remains a bottleneck for outbound travel recovery.

The capacity of outbound flights in China has been steadily increasing from around 30 percent in April to approximately 50 percent recently.

“According to the published flight schedules for the summer and autumn seasons, it may reach up to about 60 percent of the 2019 levels in the coming months. But of course, depending on the capacity situation of related airlines and airports,” Wang said.

The online company noted that there were also hurdles in the beginning of 2023 when several countries imposed new entry requirements on travelers from China, many of which have now been removed. Group also noted that outbound hotel and air reservations on its platforms recovered to over 40 percent of the pre-pandemic level, far exceeding the 15 percent market performance.

Top destinations include Great China regions such as Hong Kong and Macau as well as Southeast Asia countries such as Thailand and Singapore.

Overseas Market

While Chinese travelers regain their confidence and inject momentum into the recovery, Group noted that its overseas markets continue to show steady improvement.

Calling the Asia Pacific region a powerhouse of growth in the first quarter, Sun noted that the Europe, Middle East and Africa and American markets continued to show strong improvement.

“Air ticket bookings on our global online travel platforms have increased by over 200 percent year-over-year, and it was 100 percent higher than 2019 level,” said Sun.

The group noted that its overall hotel booking on the global platforms hit a new record high and has more than doubled the 2019 level.

China’s reopening has injected energy into the global travel recovery, Sun said.

“As a major contributor to Chinese travel segment, the resumption of China outbound travel in 2023 has given us better position to cooperate with our global partners for high-quality and unique resources, which strengthened our competitiveness and also help fuel development of our international business,” she further said.

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Tags: artificial intelligence, asia monthly, china outbound, coronavirus recovery, earnings,

Photo credit: Group is looking to cautiously embrace artificial intelligence. / Freepik

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