Role of Artificial Intelligence (AI) in the Travel Industry

What is Artificial Intelligence?

Artificial Intelligence enables computers and machines to mimic the human mind’s perception, learning, decision-making, and problem-solving capabilities.

AI is a wide-ranging branch of computer science concerned with building smart work machines capable of performing tasks that typically need human intelligence. AI made its first appearance in the year 1966 in John McCarthy’s Dartmouth Summer Research Project.

AI requires four basic elements to work: data, programs, hardware, and interconnectivity between different systems. AI as an interdisciplinary science works with multiple approaches.

It relies on big data, processing capabilities, and multiple algorithms, but advancements in machine learning and deep learning are creating a paradigm shift in virtually every travel technology industry sector.

Impact of AI in Everyday Life

AI is probably a part of your daily life in several ways. If you see a targeted ad on social media, it might have been generated by Artificial Intelligence. When you ask your digital assistant a question, Artificial Intelligence allows the technology to search the web and find the most helpful and useful answer.

When shopping, your product recommendations from your favorite music app, your social media friend suggestions, when you are reading your emails, and getting driving directions from your GPS-enabled app all may be influenced by artificial intelligence.

In less than a decade, artificial intelligence has moved from a largely obscure academic pursuit into the mainstream of business and society. AI’s unparalleled capabilities at finding patterns and predicting outcomes are remaking almost everything, from medicine to the image quality on your mobile phone.

AI in Travel Industry

In the travel industry, various technologies are being integrated with the help of Artificial Intelligence to improve service and customer support. With the emergence of artificial intelligence in the travel industry, it is simpler to make travel arrangements. AI offers travel services that are automated, customized, and insightful.

AI allows travelers to learn about their behaviors, interests, and inclinations. Overall, AI provides a personalized experience to travelers.

With Artificial Intelligence, gone are the days to consult a travel agent, meet him physically, and indulge in an endless chain of troubling calls to inquire about travel arrangements.

Multiple studies have shown that AI provides an effective complementary dimension to the future of the travel industry.

AI’s Impact on Travel Industry

Artificial Intelligence systems have several applications in tourism. From the consumer perspective, Artificial Intelligence helps users to find better and more relevant information, gives them greater mobility, improves their decision-making, and, ultimately, provides a better tourism experience.

From the business perspective, AI can be used in almost every management aspect, especially in growth and productivity. Artificial Intelligence is also expected to inspirit more sustainable travel by influencing customers to have a more social perspective.

Studies done regarding the impact of AI in the travel industry have come up with interesting and insightful results. For all these studies, data was considered which was driven by AI through various platforms. E.g.,
As of 2024, the landscape of travel planning and behavior continues to be heavily influenced by digital platforms and technology. According to recent studies, an even higher percentage, approximately 78% of customers, now plan their tourism trips using the internet, with a substantial increase to over 50% of customers planning their trips specifically using smartphones (Peranzo, 2024). The importance of digital tools is further highlighted as 88% of customers decide on their travel activities after reaching their destination (thinkwithgoogle.com, 2024).

The preference for interactive booking processes has seen a slight increase, with 38% of customers now favoring this method, and an overwhelming 82% opting for self-service technologies over traditional services (Peranzo, 2024). The demand for relevant information during the travel experience remains high, with 92% of customers expecting real-time and personalized information about their trip and destination (thinkwithgoogle.com, 2024). These statistics underscore the continued reliance on digital platforms and the growing expectation for seamless, personalized, and technology-driven travel experiences in 2024.

Artificial Intelligence systems in the travel industry can be stand-alone systems or embedded in existing systems and applications. Several new technologies evolved in the domain of artificial travel intelligence. These technologies help deliver a novel experience to the customers.

These technologies include Facial Recognition technologies, virtual reality applications, robots, chatbots, language translators, AI in Google Maps, audio tours, ease of shopping, etc. Few examples of AI-driven initiatives in the travel industry:

ChatBots:

Almost all travel service providers now use AI-driven chatbots. These AI chatbots are entering travel via customer support channels. While AI can’t handle every customer’s question, it often frees up travel agents to spend more time on more complex problems.

Maximum Likelihood Algorithm:

By using AI in combination with the Maximum Likelihood Algorithm, travel service providers can optimize services offered to travelers. The Maximum Likelihood Algorithm makes use of the past data & suggests the likelihood values of the prices.

This algorithm would suggest the timings at which the prices rise and the timings at which the prices drop. Therefore, it suggests the best timings to the customers in terms of price. This technology is used in many tourism areas, such as booking flight/hotel/Cab services. Using this technology, the customers can decide whether to book a flight/hotel/Cab or wait till the price drops.

Robotics:

Face-to-face customer service interaction is also one of the successful examples of Artificial Intelligence. Just imagine you are walking at a tourist destination, and a chatbot is there to provide you with more information about the place, where to go, what to see, and all.

“Connie”, the robot developed by the Hilton group of hotels, could be quoted as the most positive implementation of AI technology. The best part is that with each human interaction, the robot improves the quality of future communications.

Virtual Reality:

Virtual Reality (VR) technology generally uses the VR headset to create a simulated environment. This simulated environment gives an experience of VR. This technology is used by multiple tourism, travel & hospitality companies. These companies demonstrate tourist spots & hotel locations by using 3D videos. With VR, customers from a far distance can now virtually experience the hotel’s ambiance, the quality of the rooms, etc. Hoteliers describe their hotel on the website or app; provide a few images & videos that aim to provide a complete picture to the customers regarding what to expect.

Future of AI in the Travel Industry

AI is expected to massively promote and influence the standardization and professionalism of the travel industry in the current decade. As per a research study, the global travel technology market, which encompasses Artificial Intelligence, is expected to increase by more than 9% between 2020 and 2025.

According to an article by Forbes, due to the rise in the overall application of Artificial Intelligence in the tourism and travel industry, many new jobs will be created. It is expected that almost 58 million new jobs will be created by the year 2025.

AI will transform the traditional seller’s market into a buyer’s market, which is great news for travelers. AI-driven virtual tour guides will be kind, patient, and knowledgeable with travelers.

These virtual tour guides will help travelers make informed decisions with utmost accuracy and positively change traveler mindset. According to a survey, 11% of millennials prefer Artificial Intelligence assistance compared to 4% of people aged 35 and older.

So, while human customer support is still the overriding preference for some, Artificial Intelligence has a definite place in the future of the travel industry.

Conclusion

The transformation of the travel, tourism, and hospitality sector will turn into an activity focused on experience and on the increase of assets. The large-scale adoption of Artificial Intelligence will inaugurate new customer support and set a benchmark that other sectors can imitate.

Have you gone online with your travel business? It’s time you step ahead of your competitors by leveraging the power of Artificial Intelligence. Using emerging technologies in the travel industry, you can build a brand image and enjoy customer fidelity. All you need is the best travel technology solutions provider company.

We at OneClick IT Consultancy have nearly a decade of experience in developing travel portal development to boost your travel business. Connect with us today for a free quote.