Gen AI Year 3: Get Ready for Real Change

OpenAI released the first generative AI technology just over two years ago and the initial hype that it would transform the travel industry has given way to more realistic projections.

Many of the early startups are already gone. Products by larger companies have been sunsetted or redesigned.

But we will soon see an explosion of AI-powered innovations.

“Things could grow very, very quickly,” said Pete Flint, general partner of venture capital firm NFX, which he said is watching for specialized software innovations in a number of industries. Flint was also on the founding team of Lastminute.com and is the founder and former CEO of Trulia, which sold to Zillow in 2015.

Digital Agents for Leisure and Business Travel

Sundar Pichai, the CEO of Google, has big plans for the company’s Gemini generative AI chatbot.

“We’ve always wanted to build a universal agent that will be useful in everyday life,” he said during the company’s annual developer conference this year.

Kevin Weil, chief product officer of OpenAI, said during a conference in October, “I think 2025 is going to be the year that agentic systems finally hit the mainstream.”

And reports in November, not confirmed by OpenAI, said the company plans to release an autonomous AI agent in January that can control computers and complete tasks like booking travel.

It’s clear that OpenAI, Google, Meta, and their smaller competitors are developing their tech with travel in mind, as nearly every update announcement comes with a travel demo.

ChatGPT can now handle advanced voice translations, and its SearchGPT can answer questions with real-time information. Meta envisions its Ray-Ban Meta smart glasses as a guide that can answer questions as a user walks around a city. A demo of Google’s upcoming AI assistant shows a similar vision for a guide as Meta, and it’s working on a specialized trip planner for Gemini.

Meanwhile, travel giants and startups have been advancing their own AI tools for planning and booking trips.

Each company building upon its existing tools, the next couple of years will see faster advancements to the industry’s vision of a digital travel agent — a single platform that can handle personalized search and bookings, act as a tour guide and translator, and remember detailed preferences for future trips.

Modernizing the Business of Travel

Southwest canceled more than 16,000 flights in late 2022. After a group of weather-related cancellations, crew from those flights had to make a phone call to be rescheduled. The outdated system was unable to keep up, and the cancellations snowballed. A similar issue led to Delta canceling thousands of flights in July 2024.

The schedule for crew, pilots, and aircraft is a complicated web. It’s too much for humans or old software to handle, and that’s why airline tech companies are working on AI-powered solutions.

Amadeus, for example, has been working on software that would automatically reschedule itineraries for flight crews after a cancellation. Alaska Airlines recently founded and spun out a startup called Odysee, which is focused on helping airlines optimize aircraft scheduling.

There are countless examples of where AI could automate complicated tasks for travel companies, and many are investing a lot of time into figuring out how.

There will be a strong uptick in innovation focused on very specific operational tasks in the travel industry that are long overdue for modernization. Flint believes that the latest advancements in AI will allow software developers to more easily create such tools. Because software services have been designed for a more general client base historically, it’s been more difficult to alter them to fully meet an individual company’s specific needs.

Many pilots have come in the past year, and that trend is sure to continue. As travel companies continue learning and the tech continues advancing rapidly, those tools will become more refined.

In corporate travel, Flight Centre and Amex GBT have deployed teams dedicated to incorporating AI. Flight Centre has already deployed four projects to improve internal efficiency and has been working on dozens more. Brand USA, which heads tourism marketing for the nation, hired a chief AI officer to incorporate AI throughout the organization and share best practices with the industry.

Flint believes there’s also a lot of opportunity to automate procurement processes and labor scheduling for hotels.

“There’s a lot of probable optimization in those areas, which AI does a terrific job of. And that can have some meaningful revenue advantages, which I think could act as a wedge into building these more vertically focused AI applications,” Flint said.