Skift Take

Travelers have increasingly high expectations for personalized offers, seamless booking, and frictionless planning across the travel journey. Artificial intelligence (AI) provides travel brands with solutions to address those expectations with new tools that can improve the travel shopping experience and drive targeted customer acquisition.

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As travelers seek more streamlined planning and booking experiences, travel brands are tapping into AI to improve the customer journey. Rapid advances in AI are already impacting how travel brands find, message, and interact with travelers, and new platforms are expanding shoppers’ ability to plan complex trips.

One of the latest AI advances for travel shoppers comes from Google, which recently rolled out new features for its Bard AI assistant, creating extensions across Google products like Gmail, Docs, Drive, Maps, and more to simplify trip-planning experiences.

“Seamless integration across so many different platforms can help in planning complex activities, like a family trip,” said Nelson Boyce, managing director of travel at Google. “You can now ask Bard to grab the dates that work for everyone from Gmail, look up real-time flight and hotel information, see directions to the airport from Google Maps, and even watch YouTube videos of things to do there — all within one conversation.”

New features and capabilities like Google’s Bard extensions signal the increasing value of AI for travel brands, but with all the hype, hope, and promise it can be a bit intimidating for marketers looking for an easy and safe place to get started with AI.

“Despite these apprehensions, the time to adopt AI is now,” Boyce said. “Marketers can now tap into AI tools that allow them to significantly and efficiently increase their marketing reach — because it’s important to remember that you’re not competing with AI. You’re competing with another marketer using AI.”

Canceling Cancellations With AI

Beyond building brand awareness and winning new customers, AI can also solve seemingly intractable problems common in the travel space. For Economy Car Rentals Group, the challenge revolved around rental cancellations — travel uncertainties related to the pandemic and other global disruptions had driven a spike in cancellations for the company, significantly impacting revenue.

The company had been using a proprietary model based on historical data to predict the value of conversions and avoid cancellations. While it could make predictions for short- and mid-term bookings with confidence, the strategy was less capable of making longer-term predictions, and often a booking and an eventual cancellation would take place months apart.

Working with data engineering consultancy Delve, the company built a new model using Google Cloud’s AI infrastructure to more accurately predict cancellations in real time. With that understanding in place, the company used Google Ads’ value-based bidding to steer away from shoppers who were likely to cancel bookings.

The model drove a 20 percent increase in prediction accuracy, said a spokesperson for Economy Car Rentals Group, and prediction accuracy reached as high as 99 percent for short-term bookings. Overall, the effort saves the company as much as €1 million per quarter. And the company expects to use the tool going forward to target better customers and increase revenue.

Finding the Highest-Value Customers With AI

Looking to drive customer acquisition, Lufthansa tapped into Google’s new Performance Max campaign type, which uses AI to build and distribute ads across Google’s multiple channels, including Search, YouTube, Display, Discover, Gmail, and Maps.

The success of Lufthansa’s customer acquisition initiative depended on the power of AI, the strength of the marketing assets, and, crucially, Lufthansa’s deep understanding of its existing customer base.

“Performance Max uses machine learning models to optimize bids and placements to drive conversions or conversion value for your goals,” Boyce said. “But success depends on marketer inputs — high-quality creative assets and also solid customer data and information about what types of conversions are most valuable.”

Powered by Performance Max, Lufthansa’s campaign grew customer acquisition by 45 percent and bookings by 59 percent, while cost of acquisition dropped by more than a quarter.

Taking the First Step

“Reliable customer data was critical to the success of all of these campaigns,” Boyce said. “Good input into AI is good output from AI.”

Indeed, having good first-party data — provided with customer consent — is a foundational step to using AI to achieve business goals, whether that means finding new customers, deepening relationships with existing customers, or solving business challenges.

“Start with site-wide tagging and keep building stronger relationships with your customers,” Boyce said. “Then use AI-enhanced campaigns to optimize performance in real time to get more conversions and value from your budget.”

In addition, Boyce underscored the importance of flexibility, testing, and iteration: “To unlock the full benefits of Google AI, organizations need to take concrete steps to test new approaches and achieve greater agility to shift budgets to the biggest opportunities.”

The sheer power of AI is sure to change how marketers work, but Boyce argued that AI actually gives marketers the ability to get back to what they do best: marketing.

“Marketing is about connecting brands and products to people,” Boyce said. “The rise of digital has given marketers incredible tools, but campaign optimization, keyword management, and budget allocations aren’t where we can add the most value. The creativity and knowledge of travel marketers is an irreplaceable driver of marketing success.”

For actionable steps marketers can take to put AI to work, check out Google’s AI Essentials Checklist.

This content was created collaboratively by Google and Skift’s branded content studio, SkiftX.

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Tags: artificial intelligence, google, google cloud, marketing, SkiftX Showcase: Technology, travel booking, travel marketing

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