Artificial Intelligence in the Travel Industry

Artificial intelligence in the travel industry refers to using AI technologies to enhance various aspects of travel, from personalized recommendations to efficient operations. It’s important as it improves customer experience, streamlines booking processes, optimizes pricing strategies, and assists in predictive analysis, making travel more efficient and tailored to individual preferences. AI’s role is increasingly vital in shaping the future of the travel sector.

Key Takeaways

  • AI-Powered Personalization: AI enhances customer experiences by offering personalized travel recommendations and services.
  • Efficient Operations: AI improves operational efficiency in travel businesses through data analysis, forecasting, and automation.
  • Enhanced Customer Service: AI technologies like chatbots and voice assistants provide 24/7 customer support, enhancing interaction and satisfaction.
  • Predictive Analytics: AI’s predictive capabilities aid in forecasting trends and making data-driven decisions.
  • Customized Travel Experiences: AI helps create customized itineraries based on traveler preferences and behavior.

Table of Contents:

Introduction

Artificial intelligence is constantly improving, making it more reliable and attractive as a business solution. In particular, businesses in the travel industry are taking advantage of AI to perform various administrative and customer service tasks. Here, you will learn the uses and benefits of artificial intelligence and explain how it is changing how travel companies operate.

Understanding Artificial Intelligence

The concept of artificial intelligence, or AI, is often discussed but can be slightly more difficult to define. Essentially, it refers to computers or machines performing tasks that would normally require human intelligence to carry out. This could, for example, be learning lessons, making decisions, or recognizing and interpreting speech.

Artificial intelligence has existed for decades, but it is only relatively recently that computers and other machines have become advanced and reliable enough to carry out complex tasks without assistance. The concept is strongly linked to ideas of automation, where processes are carried out with little or no human intervention.

In the modern age, it is an accepted fact that businesses will collect and store vast quantities of data. This can help to enable AI, with machines using the data to perform tasks ranging from data analysis and problem-solving to speech translation, direct messaging, and improving personalization during the customer journey. According to the Artificial Intelligence (AI) Market Size Worldwide Report by Statista, the global AI market size is projected to reach $1,847,495.6 million by 2030.

The Role of AI Within the Travel Industry

The capacity for artificial intelligence to perform tasks that have traditionally required human cognitive function has made it especially useful for those in the travel industry because deploying AI can save businesses time and money while potentially eliminating human error and allowing tasks to be performed quickly, at any time of the day.

Most hotels and resorts rely heavily on delivering excellent customer service to build their reputation, and AI technology can assist with this in various ways. For example, artificial intelligence can improve personalization, tailor recommendations, and guarantee fast response times, even without staff.

Artificial intelligence has advanced to the point where it is regularly used to assist and communicate with customers, ‘learning’ from each of these interactions and improving future interactions. Moreover, AI can assist with tasks like data analysis, calculations, and problem-solving, which can be valuable to hotel owners.

Examples of Artificial Intelligence (AI) Within the Travel Industry

The role of artificial intelligence within the business world has increased dramatically over the past decade, and the last few years, in particular, have seen much more widespread adoption in the travel industry. Below, you find three of the most significant ways the technology is deployed.

1. Chatbots and Online Customer Service

For hotels and other businesses in the tourism industry, one of the most exciting uses for artificial intelligence is assisting customers online. In particular, there has already been widespread adoption for the purposes of powering chatbots on social media platforms, as well as instant messaging apps. According to the Chatbot Market Report by Markets and Markets, the global chatbot market size is projected to reach $15.5 billion by 2028.

Used in this way, AI can respond to questions and provide valuable information to customers, even when a customer service rep is not available. Customers demand faster and faster response times on online platforms, and artificial intelligence allows businesses to deliver times that would be impossible for humans.

Video: Sam, intelligent travel chatbot!

2. Face-to-Face Customer Service

While the use of artificial intelligence for powering online customer service is now relatively commonplace, one of the emerging trends is for the technology to be used for face-to-face customer service interactions. This can cut queues at information or reception desks and improve overall efficiency.

One example of this technology in action is the AI robot ‘Connie’, deployed by Hilton. This robot uses artificial intelligence and speech recognition to provide tourist information to customers who speak to it. Each human interaction also helps to teach the robot, improving the quality of all future communications.

Video: Meet Connie, Hilton Hotels’ First Robot Concierge

3. Data Processing and Data Analysis

Finally, it is important to understand that the applications of AI within the travel and tourism industry are not limited to customer service alone. One of its most popular and effective uses is for gathering and interpreting data to draw conclusions about customers, business practices, and pricing strategies.

The key advantage of artificial intelligence in this particular field is its ability to sort through huge amounts of data quickly and accurately. In contrast, the equivalent for humans would take significantly longer and potentially contain more errors. The Dorchester Collection hotel, for instance, has used AI to sort through customer feedback from surveys, reviews, and online polls to build a clearer picture of current opinion in real-time.

4. Voice-Based Digital Assistance

An emerging use for artificial intelligence in the travel and tourism industry involves providing voice-based digital assistance, which can take many forms. For instance, it is now possible to provide voice assistants within hotel rooms, allowing guests to ask questions or make requests and receive an immediate response.

Voice recognition technology opens up the potential for voice-activated room controls and instant 24/7 access to tourist information. Robots could also provide voice-based digital assistance, meaning that customer service desks can be left without human staff members, especially outside of peak times.

Video: PolyAI Voice Assistant Industry Demo: Travel

5. Artificial Intelligence Flight Forecasting

The use of AI within the travel and tourism industry is also increasingly influencing flight forecasting. This discipline relies on currently available data and historical flight data. Artificial intelligence can be invaluable when analyzing vast quantities of data and identifying relevant trends.

Drawing from this data, AI-powered software can use weather patterns, past flight times, and trends related to flight speed to accurately forecast when flights will arrive and how long delays are likely to last. As a result, those using the software can benefit from access to more reliable and accurate projections.

Table: AI Application Examples in Flight Forecasting

AI Application Benefits AI Techniques/Methods
Weather Prediction Enhanced accuracy in weather forecasting for flight planning.
Reduction in weather-related disruptions and delays.		 Machine learning models trained on historical weather data.
Neural networks for pattern recognition in weather patterns.
Demand Forecasting Accurate prediction of passenger demand for flight schedules.
Efficient allocation of aircraft and crew resources.		 Time series analysis to model demand trends.
Forecasting algorithms using historical booking data.
Aircraft Maintenance Predictive maintenance reduces unscheduled downtime and cancellations.
Extends the lifespan of aircraft components.		 Predictive analytics using sensor data from aircraft components.
Condition-based monitoring and fault prediction using AI.

6. Social Media Channel Analysis

Artificial intelligence in the travel and tourism industry also has a valuable role to play when it comes to social media. In particular, businesses in the industry can use AI to better understand how users engage with their social media channels and what those users say.

Some social media channels attract many interactions daily, and it can be almost impossible to check and analyze them manually. With artificial intelligence, key trends can be identified, the most common sentiments can be understood, and companies can better understand their audience.

Video: How Sentiment Analysis Works

7. Flexible Pricing

Many businesses within travel and tourism operate with a flexible pricing model based on the levels of demand being experienced and the level of availability. This applies for hotels, airlines, and various other business types, and AI within the travel and tourism industry can play an important role in optimizing such a strategy.

With AI’s ability to quickly organize and analyze data, it becomes significantly easier to adjust pricing intelligently and ensure that the level set makes sense. During times of high demand, pricing can typically be set higher than during times of low demand, but there are other factors that AI can utilize to make intelligent calculations.

Video: Transforming Dynamic Pricing in Travel Industry through AI

8. Smart Baggage Handling

The use of artificial intelligence within the travel and tourism industry also extends to baggage handling and security. AI can be used to sort baggage more efficiently, reducing the kind of mistakes that lead to lost baggage. On top of this, AI can help to sort unclaimed, misplaced, or lost baggage.

AI technology can also be deployed for security. For example, when airport security systems scan luggage, AI can automatically scan images and detect possible items of interest. An alert system can then be set up, attracting the attention of security staff if something suspicious is found.

Video: The Future Of Baggage

9. Artificial Intelligence (AI) Face Recognition

Artificial intelligence technology is the underlying technology behind automated facial recognition capabilities. This technology compares real-time images with images on a database, using facial features to identify individuals. The best facial recognition technology can identify individuals in seconds.

Facial recognition using AI in the travel and tourism industry is commonly deployed for security purposes. For example, within airports, it can be used to detect people of interest. In some cases, facial recognition can also be used to establish how many people are in a particular area, which can also be valuable for safety and security.

Video: How Facial Recognition Will Change The Way You Travel

10. Personalized Travel

The travel and tourism industry also uses AI technology at the beginning of the customer journey to provide a more personalized travel experience. This is most commonly seen with websites offering hotel, flight, or other travel-related bookings, where intelligent recommendations can be made during this booking journey.

For example, artificial intelligence can utilize information from a user’s website exploration to make tailored recommendations for hotels or destinations based on what that user has been searching for or looking at. This can work in the same way retailers like Amazon recommend products based on past purchases or browsing. AI chatbots can also be deployed to answer customers’ questions while booking.

Video: How Kayak Is Using AI for Travel Planning

11. Managing Travel Disruption

Forecasting is one of the single biggest uses of artificial intelligence within the travel and tourism industry, and this can potentially be used to reduce travel disruption significantly and manage any issues that arise.

For example, AI can use historical data to identify trends that can then be used to predict the likelihood of flight delays accurately. Alternatively, AI can gather data from weather forecasts, compare this with past data, and provide guidance or advice on whether disruption is likely and how issues can be resolved.

Artificial Intelligence Travel Industry - Travel Disruption

12. Artificial Intelligence (AI)-Powered Revenue Management

Revenue management is the process of selling the right product to the right customer at the right time, for the best price, in the most efficient way. It is a data-driven discipline, which is why artificial intelligence can be beneficial, helping those in the travel and tourism industry to maximize their earnings.

AI makes it easier to sort through all of the available data. This could include existing bookings, the number of rooms or seats available, upcoming events, and historical data on demand levels at the same time of the year. From there, the AI can automatically adjust pricing and distribution strategies to optimize financial results.

Video: Revenue Management Revolution

13. Assisted Airplane and Airspace Maintenance Reports

Predictive analytics is a field that airlines are investing heavily in because it can save them significant money lost when unexpected issues arise, requiring airplanes to be grounded.

Artificial intelligence and predictive analytics can be used to understand when maintenance is likely needed and anticipate problems before they arise. When airlines and others in the travel and tourism industry use AI in this way, they can take action at the time that is least likely to cause upheaval.

Video: AI: The Future Of Intelligent Maintenance

14. Employee Management Schedulers

Hotels, airlines, and other travel and tourism businesses can use AI to improve employee management and scheduling. In companies with many employees, creating a work schedule can be a complicated and time-consuming process, with many moving parts that need to be factored into any decisions.

With artificial intelligence, viable work schedules can be created automatically, factoring in all available data, including the number of hours each employee has worked, the need for senior staff on each shift, the hours each employee is contracted to work, any approved holidays, and the necessary time off between two shifts.

Video: AI-Powered Workforce Management

15. Pricing and Demand Predictions

Modern customers are always looking for the best prices, but many factors can influence hotel room rates, flight fares, and the prices of other products and services within the industry. Software powered by artificial intelligence can help travel and tourism industry customers to better understand fluctuations in prices.

For instance, the software may be able to alert users that hotel room rates in a particular destination are likely to increase. At the same time, the software can help customers to understand spikes or dips in demand, which allows them to book travel or hotels at the best possible time.

Artificial Intelligence Travel Industry - Pricing

16. Facilitating Customer Loyalty Programs

Customer loyalty programs serve an important function by offering incentives for customers to return to a business repeatedly. However, for a successful customer loyalty program to achieve this, the rewards on offer need to be worthwhile, and this is another area where the travel and tourism industry and AI go hand-in-hand.

Using online tracking, transaction histories, and personal preferences obtained during sign-up, AI can provide loyalty scheme members with personalized rewards that keep customers coming back.

Video: AI – Machine Learning in Loyalty Programs

17. Detecting and Preventing Payment Fraud

Travel and tourism businesses deal with many types of payment fraud, and AI can be a valuable tool in detecting and preventing many of these issues. One of the main ways this can be achieved is through pattern recognition and behavioral analysis.

By analyzing data from previous fraud cases, it may be possible to identify attempted payment fraud before any serious damage is done. Alerts can be set up to flag suspicious activity for human intervention.

Video: Visa’s artificial intelligence (A.I.) for fraud detection

18. Travel Disruption Communication

Travel disruption can take many forms, from delayed planes or trains to lost baggage or lengthy queues for security. However, one of the most critical things for travel companies to get right is their communication with customers, who need constant access to the most up-to-date information.

When issues occur, AI can be used to convey messages to travelers. Automated emails and text messages can be sent when delays are expected, and the AI can also potentially calculate how long those delays are likely to take. Meanwhile, chatbots powered by AI are used throughout the travel and tourism industry, answering travelers’ questions.

Virtual Reality & Augmented Reality

Would you like to learn more about other digital technologies that can benefit your business? Have also a look at the articles “How Virtual Reality is Transforming the Travel Industry” and “How Augmented Reality is Revolutionising the Travel Industry”.

Artificial Intelligence in Travel Industry FAQs

AI can be used in the travel industry to provide personalized recommendations, automated customer service through chatbots, predictive analytics for pricing and demand forecasting, and improved operational efficiencies in bookings and hotel management.

AI is used in transportation to optimize routes, manage traffic flow, predict vehicle maintenance, and develop autonomous vehicles. It also enhances safety and efficiency in public transport and freight logistics.

AI is used in navigation and travel to provide real-time traffic updates, route optimization, personalized travel suggestions, and language translation services. It helps improve the accuracy and personalization of travel experiences.

AI can be used in airports to streamline check-in and security processes through biometric identification, improve baggage handling with automation, optimize flight schedules, provide personalized customer service via chatbots, and enhance overall operational efficiency.

AI can be seen as disruptive to the travel industry as it changes traditional operations and offers opportunities for innovation and improved efficiency. It enhances customer experiences, streamlines processes, and can lead to cost savings for businesses.

More Innovating Technologies Within Travel

With technology continuously evolving, it should come as little surprise that its applications within the travel industry evolve too. In the following articles, we piled up more innovative technologies in today’s travel and tourism industry.

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This article is written by:

Martijn Barten
Hi, I am Martijn Barten, founder of Revfine.com. I am specialized in optimizing revenue by combining revenue management with marketing strategies. I have over 15 years of experience developing, implementing, and managing revenue management and marketing strategies and processes for individual properties and multi-properties.