AI is fundamentally changing the travel industry

The tourism industry has made an excellent recovery from the Covid pandemic, but is undergoing fundamental change. At the ITB Berlin Convention Charuta Fadnis, senior vice president of Phocuswright, talked about the growing importance of generative AI, while also looking beyond this trend into the future. According to Fadnis, generative AI affected providers and customers alike. Around 80 per cent of people of all ages were aware of the existence and importance of this technology. There were significant differences between countries and age groups regarding people’s personal use however, she said. In the US, around 50 per cent felt of respondents felt comfortable with Large Language Models, as against 35 per cent in Germany and 30 per cent in France.

Companies who include AI in the online presentation of their services have been able to significantly increase their turnover. Charuta Fadnis mentioned Tripadvisor, who in the first three months after introducing an interactive service achieved an average threefold turnover per customer compared with normal Tripadvisor customers.

Charuta Fadnis also cast here eye into the future, where she envisaged virtual agents taking over bookings for travellers. A comprehensive One Travel app was conceivable too – Google Maps was a promising candidate there. This service was being constantly updated and improved. Google’s advantage was that it had comprehensive data on users’ preferences. “We cannot ignore AI, as its effect will be transformative. Perhaps some people overestimate its short-term impact, but there are probably many who underestimate its long-term effect“, the market researcher said.

AI had the potential to not only make travellers’ lives easier, but in some cases more difficult too – if for instance it was used to generate a large volume of fake reviews and tempt consumers into making bookings they would later regret. One way of avoiding this was to combine generative AI and blockchain technology, ensuring reliable identification of users and making misuse much more difficult.

At the ITB Berlin Convention Charuta Fadnis also presented the latest survey findings on tourism and sustainability. Customers needed to make a greater effort here, she said. While 50 per cent of respondents said environmental standards and climate protection criteria determined their transport and accommodation choices, only 10 per cent actually followed up in practice.

Many travellers expected tour operators, governments and destinations to take responsibility for a sustainable travel experience. According to Charuta Fadnis it was important to get consumers on board too. This could be achieved by clearly defining and communicating standards – and giving “palatable“ and realistic recommendations to travellers .