AI and Travel: Year 1 Hype, the Reality of What’s Next

It’s been just over a year since ChatGPT launched, and everyone gets that artificial intelligence will have a huge impact on businesses in every industry, including travel. Less clear is the timeline and where the changes will hit most.

Skift founder and CEO Rafat Ali joined entrepreneur and author Andrew Keen for the Keen On podcast to share his outlook. Here are highlights from his conversation. Listen to the full podcast here.

Is AI Just Hype? Or Is This The Year It Changes Everything?

Ali: It’s been a little over a year since ChatGPT launched. As you know, since you’ve covered all these tech cycles for decades as much as I have, initial promise comes out — “it will change everything” — there’s a pullback, and then the reality of actual changes happen.

I feel like in AI, we are in that phase — only more exponential. And so yes, a lot of things will change.

The back-end processes that drive so (many) industries and sectors and the world. I feel like that’s where the real effect of AI will be.

I just don’t know if AI will change everything on the front end.

Chatbots are certainly the easiest, lowest-hanging fruit that everybody’s looking at. But the travel industry is just a gargantuan industry. And there’s so much friction, and so much human input in it. Travel is probably one of the world’s largest employers of people — just because there’s so many people that are required to deliver different parts of the ecosystem.

So I feel like that’s where a lot of the effect will be versus just a friend and chatbot type of business.

Breaking Out of the Tyranny of the Search Box

Ali: [The] search box has been there exactly as it is for the last 25 years.

Which seems very counterintuitive to, in general, how technology progresses, where there’s new ways of accessing information, booking, etc…You can only search in very specific ways because that’s what these boxes are. And so in 2015, I wrote this term called the tyranny of the travel search box. You are trapped into that search box. There’s only X number of ways you can search. And to break out of that tyranny of (the) search box, this was the first phase of Alexa and voice messaging apps coming. And the hope was that would take off.

It really didn’t take off, and this is the next iteration of how I’m thinking about this, which is: The interface that we’re so used to for the last 20, 25 years, if that becomes either a hybrid conversation plus this directed search…then what would travel search and booking look like? So I think, from a conceptual perspective, that’s what got me excited in the first place. 

Why am I not impressed so far? I think the thing we’re missing is that the burden of changing the interface can’t solely be put on the travel industry. If larger search interface changes – Google, Bing – if that changes in a radical way, only then can we expect the interface changes to come to vertical things. I don’t think we can divorce one from the other…

For consumer habits to change on a large scale, that has to happen. That hasn’t happened yet.

Will AI Destroy Travel Jobs?

Ali: I think that that’s the one of the biggest existential questions that the travel industry has to figure out, maybe over the next decade. And the tech industry (is) sort of at the vanguard of this. The travel industry employs a lot of frontline people, whether they’re people that are at hotels, cleaning rooms, etc., to people at airports to drivers.

Travel is also one of the world’s largest generators of a middle class. People who come into travel start at the lowest level and then work their way up. (The) hospitality industry is particularly known for it in a lot of countries. (In) Caribbean countries, for example, tourism is the largest, percent of their (gross domestic product).

A lot of people depend on their livelihoods. So there’s a lot of challenges there.

Robotics versus demographics: I think that’s the battle that we are fighting big picture. I like that construct and I mean robotics in a larger sense. I don’t mean physical robots. I mean tech and AI in general. In a lot of cases, in particular, for example, hotel operations …. the initial phase will be how to make humans more efficient. Whether it’s scheduling of the housekeepers, making sure that the back of the house runs more smoothly, fast or cost-efficient.

So humans will still be involved. And then over a certain period of time, some of these human functions will be taken over by tech/AI, whatever you want to call it. I don’t know if actual physical robots will come in there. Some experiments (with) hotel robots, whether it’s concierge or cleaner for the room, etc. So definitely there’s opportunity there.

One of the biggest places where AI is and will have immediate effect is customer service. And this is true across all industries — but also very true in travel, which if you remember, in Covid, when we were first beginning, when the world first started shutting down, there was such a logjam of people trying to cancel their flights. And hotels and airlines were unable to keep up with the demand and everything fell apart and people lost so much money.

And even now, years later, airlines are still going to the backlog of those refunds. This is still happening. So a lot of it was a shortage of humans, just because there was so much demand and people weren’t in offices, working from homes, all this other stuff. So the front end part will be taken care of by AI. It’s already being taken care of.

There’s a company in travel called Navan, which is a corporate travel company that manages corporate travel for large companies. And they estimate that about 80% of the queries — low-level queries that people want to just rebook their things — can now be taken care of through an AI chatbot that they have. And the 20% that are more complex is where humans will come in. So that’s an example of where a lot of the inefficiencies will be taken care of from a labor perspective.

Does AI Mean The End of Travel Agents?

Ali: The travel agents were not killed by online travel. The low-level travel agents – nobody uses travel agents to book their flights anymore. So that part is gone.

Travel agents are still big and thriving and growing in parts like the cruise industry or complex booking. The demographic is more used to speaking to humans. (In) luxury travel, they’ve rebranded agents to advisors and so on. So the industry calls themselves travel advisors, not agents.

And so this is where you’re rich (and) don’t (have) time (but) have money and want somebody to plan your family vacation — honeymoon, 50th birthday, whatever it is. Or general travel. And so travel agents come and they’re specialized travel agents, whether they’re focused on sports travel — sports travel is a big sector. And so in many specialized areas in the world, travel agents still matter.

I think the smart travel agents will adopt AI to move faster to scale themselves in ways that they can. I think again (there will) be an erosion of the lower-level functions of the travel agent.

Do Consumers Need to Stop Complaining?

Ali: All these other platforms made it very easy for us to complain. It’s a bit of a cliche if you now complain about your flight on Twitter. I do think the airlines have gotten better. I think airlines have oversold what they are. They’re a utility.

And beyond a certain point, if you expect hospitality from airlines, we’re expecting the wrong things from airlines. They do a reasonably good job of taking you from A to B. United has improved a lot under the new CEO and (made) a bunch of changes before that as well. That’s an expectation in general. If you’re paying for business class or first class etc., (there are) somewhat different levels of expectation.

But even then, I think it should be looked at as a utility. At some point the industry and the consumers have to reset the expectations. That’s my general sense.

How Should AI Transform Travel?

Ali: You want it to be totally out there? Teleportation. Transport me. Will it ever be a reality? I guess I haven’t done enough research on it. Me and my family’s in India, so it’s a long flight from New York. We’re only able to go once or twice a year.

Bringing it back a little more to reality … if supersonic travel is coming, tech and AI will 100% play a big role in it if it comes back again. And so personally, shorter journey times or more efficient journey times is probably where I would personally want most of the changes to happen.

Because everything else I can manage, like booking. I actually like the booking process. I try if I’m doing personal travel, I drag out a phase of searching and going to different sites. But that’s just me. I know a lot of people don’t like it, but a lot of people do like the planning process. And I like stretching that out, so I know AI will make it shorter.