Ask Skift: What Is AI’s Impact on Travel?

Ever since the launch of OpenAI’s ChatGPT service last December, travel companies have been rapidly devising strategies to use generative AI to boost business.

What is AI’s impact on the travel industry? Ask Skift, our artificial intelligence chatbot, listed several areas where AI has altered or is altering travel using information that’s appeared in our daily news coverage.

Here are the answers Ask Skift provided in addition to further research we did on the subject.

Travel Demand and Pricing

Ask Skift said:
AI is being used to process and analyze large amounts of data to predict travel demand and impact pricing. For example, AI might uncover signals about travel demand from unconventional sources like images posted on social media, which may reveal trending preferences among travelers.

What else you need to know:
Hotel executives are bullish on AI helping make room pricing profitable. Ryan King, senior vice president of hotel software services firm Shiji Americas said that generative AI will likely uncover signals about travel demand from unlikely sources of information.

Senior Hospitality Editor Sean O’Neill reported that future tech advances might enable dynamic pricing for individual rooms. For example, a very spacious corner room frequently appearing on social media could command higher rates. King said it might even be possible for revenue management software platforms to assign rates for specific rooms based on the perception of those rooms.

Personalized Customer Service

Ask Skift said:
AI has the potential to transform how travel companies offer hyper-personalized customer service, with a notable shift in this direction expected as early as next year. Major hotel brands, online travel agencies, and other companies are working to implement advanced AI into their businesses June 2023.

What else you need to know:
Julia Clark, senior technical product manager of AI Services for Amazon Personalize, predicted at the HITEC travel tech conference in June that travel brands would use generative AI to personalize travel itineraries, enabling them to increase customer loyalty. AWS announced it was launching a new $100 million program to help customers develop AI-generated platforms.

Travel Technology Reporter Justin Dawes said AWS has already helped Hyatt make personalized recommendations for customers, including suggesting hotels that matched their interests. Hyatt said it saw a $40 million increase in revenue in the first six months it started working with AWS.

Airbnb CEO Brian Chesky has predicted that the travel industry will see more AI-augmented customer service. Chesky said that believes travelers will still want to receive assistance from a human being but one who is helped out by AI.

Travel Planning and Booking

Ask Skift said:
AI is playing a significant role in consumer travel planning and booking. For instance, Priceline has released an AI-powered platform that provides travelers with a list of personalized hotel recommendations and enhanced payment security. They also launched an AI chatbot, Penny, that can act as a local guide, help desk contact, and 24/7 concierge.

What else you need to know:
Dawes reported in June that there are so many travel companies releasing AI-powered booking tools, it’s becoming difficult to keep up. In addition to Priceline, other travel giants such as Expedia, Booking.com and Tripadvisor have entered the AI game.

Expedia became in April 2023 the first major online travel agency in the West to release a travel planning chatbot powered by ChatGPT on its mobile app. Expedia users can ask general questions in the chatbot, which is separate from the virtual agent the app features, about a destination or trip ideas.

As for Booking.com, it unveiled an AI trip planner to U.S. members of its Genius travel rewards programs on its mobile app in June. The company said the platform would field questions about destinations and accommodations. Booking.com also noted its trip planner uses OpenAI’s ChatGPT as its foundation in addition to the company’s own AI tools.

Tripadvisor launched in July an OpenAI-based trip planner focused on experiences and dining reservations. Executive Editor Dennis Schaal writes that platform has a different look and feel from other OpenAI-based app features such as Expedia’s. Travelers using Tripadvisor’s planning tool can simply fill in items such as their destination, date of their trip and activities they’re interested in.

Combating Labor Shortages

Ask Skift said:
AI is being utilized in the business-to-business sector, particularly in hotel tech, where companies are enhancing their platforms with generative AI to combat labor shortages.

What else you need to know:
Hospitality leaders speaking at the 2023 NYU International Hospitality Industry Investment Conference in New York in June said it was time to adapt a new strategy that doesn’t rely on wage increases and instead utilizes artificial intelligence to boost staffing levels. Roughly 82% of U.S. hotels experienced labor shortages in June, a three percentage point increase from January, according to the American Hotel & Lodging Association.

Dawes cited HiJiffy as one hotel tech company that has used generative AI to overcome challenges brought forth by the industry’s ongoing staffing shortages. HiJiffy said its software has been able to answer specific questions using a database of information attached to an individual hotel client.

HiJiffy founder Tiago Araújo said the startup grew 150% during the pandemic due to labor shortages, which he added are still causing clients problems.

“What we hear the most of their struggles is with staff,” Araújo said. “We’re seeing it globally, with a big staff shortage, and they’re trying to automate as many processes as they can.”