Skift Take

They say "it's about the journey, not the destination." But what may be true in life may not be true about how travelers want to book their trips online. TUI hopes to tap artificial intelligence to make travel search friendlier.

Travel platforms have traditionally prompted users to search with specific queries for flights or hotels. But AI is driving a shift towards conversational search methods, and tour operator TUI is trying to stay ahead of the curve.

TUI has been testing how to move from static search forms to online chats focusing on customers’ desired travel experiences, like diving or nightlife, to tailor unique trip itineraries.

“People look first where they can dive best before they decide on a country or a hotel,” said CEO Sebastian Ebel during an investor call Wednesday. “Experiences are the main driver for decisions. It is the new lifestyle and global trend.” 

For more details on TUI’s ideas, Skift interviewed TUI Group chief information officer Pieter Jordaan, who said TUI was “investing millions of euros” into generative AI applications.

TUI Tests AI Chat in Its App

TUI has been testing a way of engaging with customers where travelers using its app start by sharing what their desired experience is for a trip, and the chatbot works backward to determine travel and accommodation.

“Travel is almost a byproduct of the experience they want,” Jordaan said. “I think the travel industry needs to change how they help the customer.”

TUI has been testing an AI planning tool for selected app users in the UK only. About 80,000 people have engaged with TUI’s generative AI chatbot since its launch in July, Jordaan said.

About 12% of those clicked to view travel experiences suggested by the chatbot. The conversion rate to book travel products, however, has remained about the same as the company’s long-standing search recommendations, including web or mobile booking. 

The sample size is small compared to the 19 million customers TUI served this year.

Digital Overhaul

TUI is working with several generative artificial intelligence service providers, not just one, to modernize its travel search, booking, and customer engagement.

Jordaan said Open AI’s Enterprise ChatGPT and Amazon Web Services’ Bedrock are “a big accelerator” for enterprise-level AI development, allowing TUI to use its vast customer data safely and securely.

Jordaan sees TUI’s generative AI approach as agnostic, taking elements from various providers. Open AI and Microsoft’s Copilot, Google’s Bard, now enhanced by Gemini, and AWS all offer different opportunities to exploit with “tool suites and ecosystems,” according to Jordaan. 

“We want to solve business problems, not solve technology problems. We don’t need to do training [of LLMs, or large language models]; we need to innovate in a secure way for our customers,” said Jordaan.  

He said the tour operator has already implemented AI innovation with its translation services, copywriting and SEO enhancements, communication posts, and to generate faster responses to customer queries. However, Jordaan didn’t disclose the size of TUI’s AI team, stating only that AI development and use was encouraged company-wide.

Digital Acceleration

Ebel, the CEO, sees this digital acceleration as a way to personalize the app experience.

One goal is to boost customer loyalty by moving travelers from the web to the TUI app. Encouraging people to come directly to the app would have the side benefit of trimming the high marketing costs of performance marketing search to acquire users on the open web.

“Especially for TUI, the demographics of our customers help us a lot in the growth we want to achieve,” Ebel said. “This is because, in our segment, we have a lot of people for whom travel is very important, and they spend a significant amount of money for it.” 

For Ebel, bringing customers into the TUI fold from the web to its app is a cost-saving measure to boost “customer lifetime value,” or the amount of spending they expect to get from a customer over their lifetime. 

“Google costs have gone up dramatically,” Ebel said. “So we want to bring the web customer into the app, and we want to get even stronger.”

TUI said on Wednesday that it expects its operating profit to jump 25% in 2024 after it more than doubled this year on strong demand. Its stock rose about 30%.

For further insights into how TUI incorporates artificial intelligence into its customer journey, watch Mark Jennings, CIO of Analytics and Artificial Intelligence, give a detailed presentation at the AWS re:Invent 2023 conference.

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Tags: artificial intelligence, AWS, experiences, tours and activities, tui, tui group

Photo credit: TUI's app. Source: TUI.

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