With the rise of tools like ChatGPT, artificial intelligence (AI)-powered tools are integrating into our daily lives. While AI technology has been around since 1951, the breadth of AI applications and its impact on both work and society is becoming increasingly apparent to the general public. However, in recent years, several tools and technologies have used AI under the hood, giving users the benefit of AI without a complicated user experience. The travel industry is no different. For years, AI has been used to improve core business applications like revenue management, customer personalization, and content creation. Travel marketers have also been using AI to improve targeting, better curate audiences, and automate the management of campaigns. Now, as generative AI and more robust tools become more widely available, we expect AI to continue to transform the travel industry.
What’s so great about AI?
Thanks to the explosion of cloud infrastructure and the proliferation of data collection and consolidation, more companies are deriving value from AI tools and technologies. AI simulates human intelligence using computer systems and algorithms. By leveraging large historical data sets to build models, AI systems can better predict outcomes and/or automate decision making. These capabilities are increasingly core to many practical applications and as the historical data sets grow, the performance of such applications improves. In travel, such AI applications can predict consumer behavior and provide insights that can be used to tailor experiences, create custom messaging, or reach travelers at exactly the right time when they’re most likely to book.
The current state of AI in travel
In today’s world, personalization is key to winning the business and loyalty of customers–and travel is no exception. According to a recent survey, 71% of consumers expect companies to provide personalized experiences. AI-powered models allow marketers to deliver highly-personalized campaigns at scale. By analyzing billions of data points, these models give travel marketers the information they need to understand traveler preferences and create personalized messaging that resonates–and inspires them to book.
Using their first-party data as input, travel marketers can use AI tools to create custom audiences so they can not only identify if a consumer is in the market for travel, but those who are ideal for their business. These tools allow marketers to find their ideal travelers quickly and easily, maximizing the marketing opportunity and improving LTV.
For example, an AI model can sift through travelers, predict the likelihood that a traveler will take a specific action or book based on the type of experience they’re looking for, and rank them accordingly. Travel marketers can then hone in on what the top-ranked travelers want and need, tailor messaging, and connect at the right time with travers who are actively in the market to book a trip. This continues to push them further down the funnel and increases campaign ROI because those travelers’ recent activities have indicated that they are either prone to engaging or on the verge of booking.
What’s next for the travel industry
As travel marketers look to use AI to automate and optimize campaigns, they can make informed campaign decisions and adjust based on real-time information. Traditionally, a campaign analyst would perform these tasks, but AI mimics the role of the analyst, giving brands of all sizes access to the same tools and information–which means small and big companies alike can deliver the experience travelers want. With AI, metrics such as impressions, click-through rates, and conversion rates are estimated automatically so marketers can optimize bids and campaign budgets, without hiring an expensive data or campaign analyst.
Beyond travel marketing, AI will make it easier for hoteliers to provide great customer service by automating aspects of a front desk clerk and concierge. This will free hotel staff from having to answer simple questions about things like check-out times, room service, and local attractions, and allow the team to focus on human elements that make a guest’s stay even better. This will be especially powerful for hotel properties looking to drive repeat visits, improve customer LTV – the lifetime value of a customer throughout their entire relationship – and increase revenue per available room.
For consumers, AI will become even more integral in reducing travel costs, complexity, and stress. AI will assist consumers in finding and booking lodging, selecting and forecasting flight times, and improving overall customer service provided by travel businesses. In short, AI will make it easier for consumers to have unforgettable travel experiences.
The use cases for AI will continue to expand, especially as generative AI tools and applications become more widespread. While the travel industry has long used AI tools, future applications will be even more robust, enabling marketers to do more with less while ultimately creating a better, more personalized experience.
