The travel industry is one of the most dynamic and competitive sectors in the world, constantly adapting to changing customer needs, preferences, and expectations. In recent years, the travel industry has witnessed a rapid growth of artificial intelligence (AI) applications, which are transforming various aspects of the business, such as customer service, marketing, operations, and revenue management. But is AI disruptive to the travel industry? And if so, how?

AI is defined as the ability of machines to perform tasks that normally require human intelligence, such as understanding language, recognizing images, learning from data, and making decisions¹. AI can be seen as disruptive to the travel industry in two ways: by creating new opportunities and challenges for existing players, and by enabling new entrants and business models to emerge.

AI creates new opportunities and challenges for existing players

AI can help existing players in the travel industry improve their performance, efficiency, and customer satisfaction by automating various tasks and processes, personalizing products and services, and generating insights and predictions. For example:

• AI can help travel companies provide better customer service by using chatbots and digital assistants that can answer questions, provide information, make recommendations, and handle bookings and complaints². AI can also help travel companies create more engaging and relevant content for their websites, blogs, social media, and marketing campaigns by using generative AI tools like ChatGPT³, which can produce original and SEO-friendly texts in seconds.
• AI can help travel companies personalize their products and services by analyzing customer data and preferences, and offering customized itineraries, prices, offers, and experiences⁴. AI can also help travel companies create more immersive and innovative experiences for their customers by using technologies like augmented reality, virtual reality, gamification, and social interaction⁵.
• AI can help travel companies optimize their operations and revenue management by using data analysis and prediction to improve their pricing, inventory, distribution, and demand forecasting. AI can also help travel companies reduce their costs and risks by using technologies like facial recognition, biometrics, blockchain, and smart baggage handling.

However, AI also poses some challenges for existing players in the travel industry, such as:

• The need to invest in AI infrastructure, tools, talent, and training to keep up with the technological advancements and competition.
• The need to ensure the ethical and responsible use of AI to protect customer privacy, security, and trust.
• The need to balance the human and machine elements of the business to maintain customer loyalty and satisfaction.

AI enables new entrants and business models to emerge

AI can also disrupt the travel industry by enabling new entrants and business models to emerge that can challenge or complement the existing players. For example:

• AI can enable new entrants that specialize in niche markets or segments that are underserved or overlooked by the traditional players. For example, Autoura⁵ is a digital experience platform for real-world experiences that uses AI to create personalized and immersive tours that include audio guides, augmented reality, gamification, and social interaction.
• AI can enable new business models that leverage the power of platforms or networks to connect customers with providers or peers. For example, Airbnb is a platform that connects travelers with hosts who offer accommodation or experiences. Airbnb uses AI to match travelers with hosts based on their preferences, reviews, ratings, and availability.
• AI can enable new forms of collaboration or partnership between different players in the travel industry or across industries. For example, Expedia Group is a global online travel company that owns various brands such as Expedia.com , Hotels.com , Trivago , Orbitz , Travelocity , Hotwire , CarRentals.com , HomeAway , VRBO , Egencia , Expedia Partner Solutions , Expedia Cruiseshipcenters , Classic Vacations , Traveldoo , SilverRail Technologies , Wotif Group , AirAsia Expedia , Expedia Local Expert , Expedia Media Solutions , Expedia Affiliate Network , Expedia Lodging Partner Services , Expedia Global Tour & Transport , Expedia Group Technology Solutions , Expedia Group Marketplace . Expedia Group uses AI to integrate its brands and offer a seamless experience for its customers.

Conclusion

AI is indeed disruptive to the travel industry in both positive and negative ways. It creates new opportunities and challenges for existing players in terms of customer service, marketing, operations, and revenue management. It also enables new entrants and business models to emerge that can challenge or complement the existing players. AI is not a threat to the human element of the travel industry, but rather a powerful tool that can enhance it. By adopting AI in their business strategy, travel companies can leverage the benefits of technology to improve their customer experience and boost their sales.