Organizational shifts prompted by AI are already happening. It’s only a matter of time before it leads to job cuts.
When the first generative artificial intelligence model was released just over a year ago, it was clear that computers could do something that previously only humans could: create. And the travel industry — generally behind-the-times technologically — has a lot to gain from tech transformations that include adopting generative AI.
Booking.com is one company that has already seen an organizational shift.
In 2023 the company shifted employees who were translating content into other positions. A spokesperson said that, so far, Booking.com has not outsourced any jobs due to its use of AI but will continue using the tech as it improves.
In tight economic times, however, companies won’t have the luxury of being able to find other roles for employees.
Some would say it’s not a matter of “if” AI will replace jobs, but “when.”
Jason Calacanis, a tech entrepreneur and investor, is one who thinks it’s only a matter of time before AI becomes so advanced that they lead to “massive job destruction.” His firm reviews about 20,000 startup applications each year and invests in 150 of them.
“Anything that’s being business-process-outsourced will be done by AI,” Calacanis said during the 2023 Skift Global Forum. “We will see entire categories of work go away.”
Steven Elinson, managing director of travel and hospitality at Amazon Web Services (AWS), is skeptical of making such bold claims about AI replacing workers — at least for now.
He believes this is an opportunity to advance workers’ skills and points to Trip.com Group as an example. The company is partnering with AWS to create a four-year program to train 2,000 employees on how to build new AI apps in the cloud.
“Do I think that developers would be laid off or there’d be a reduction of force? I think, clearly, the answer is no,” Elinson said. “What it’s going to allow is that greater level of productivity. It’s going to allow all of those executives to dream up their wildest marketing plans, or their newest innovations for the supply chain. And it’s actually going to allow the technologists to be able to increase the pace of innovation.”
In the Booking.com scenario, AI does replace jobs. But companies still need workers.
In other words: “We’re going to be replaced by people who are using AI,” said Ben Ellencweig of McKinsey & Company during the 2023 Skift Global Forum.
Some AI applications being implemented in the travel industry are making a difference now. Many large companies have already described how new AI tools are streamlining operations and increasing productivity, particularly in software development, customer services, and marketing content creation.
Some industry leaders have likened these tools to an assistant that doesn’t eat, sleep or go on vacation.
Uber is working on implementing GitHub Copilot, a platform developed with OpenAI that can increase software development productivity by 55%. Large online travel agencies are implementing similar programs as they develop next-generation AI trip planning tools for consumers.
“Because of investments that we’ve made in our tooling, our average software developer is much more productive now than they were two years ago, and we think that GitHub Copilot will improve productivity and hopefully will also reduce mistakes on the platform, as well,” Uber CEO Dara Khosrowshahi said during an earnings call in November.
Ryanair, which is in an AI exploration partnership with AWS, is among airlines that have said they plan to automate some call center operations.
Ryanair is also looking at automating flight planning and rescheduling systems for pilots, cabin crew, and engineers. Amadeus, which provides tech to travel companies, is working on a similar project with Microsoft to help airlines and airports.
Tech giants are now working to help travel companies use AI to transform the way they operate their businesses.
Microsoft has exclusive access to the tech that powers ChatGPT as an early investor in OpenAI. And through its partnership with Amadeus, hospitality companies have access to some of that technology as well. Most recently, Amadeus revealed a new AI-powered retail system meant to make airfare sales more like shopping on Amazon: Saudia and Finnair are the first customers.
Google is making similar moves through its partnership with Sabre, a competitor of Amadeus. Sabre in August released the Lodging AI platform, for example, meant to help travel agents provide more personalized lodging options to customers.
New and updated products from AWS include a service to build apps, which Delta Air Lines is using to design a customer service chatbot with access to info about travel policies, real-time flight schedules, customer rebooking options, and airport conditions. Another service, which Choice Hotels is using in its customer service centers, can summarize customer interactions and make recommendations on how to respond.
That kind of third-party help is needed in the travel industry, which has generally lagged behind on investing in new technology.
In a 2023 survey by Skift and AWS (sponsored by AWS) of 1,000 travel and hospitality executives, 95% of executives said that digital transformation is important to the overall strategy and success of their businesses, and 86% said that AI would be an important implementation in the next three years. Yet, only 7% of the same executives said that their businesses are more technologically advanced than they were in 2020.
It’s not just the large companies that are helping the hospitality industry leverage AI. A number of startups have popped up to do the same, while others have been enhancing their existing products.
HiJiffy in June raised venture capital for an AI chatbot that it says can draw individual hotel client data to answer specific questions. Easyway enhanced its hotel tech AI to power personalized messages on WhatsApp. A new tool by Lodgify generates customer emails for short-term rental hosts. And an AI tool by TourConnect can read a tour operator’s emails to more quickly process bookings.
All this change will take time.
But Elinson of AWS said there’s more adoption around the corner — small companies included.
“They realize that they need to keep pace because consumer expectations are ever changing,” Elinson said. “They want to be able to meet those new customer expectations that are coming around. And so we see these customers making the investments — they tell us that in the surveys, and we see it in real life.”
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