Generative AI is still a nascent technology paradigm. However, its ability to drive disruptive change is clearly visible. Many enterprises across industry sectors are integrating Generative AI and other types of AI to grow revenues, reduce costs, improve customer experience, and strengthen decision-making speed and quality. This article explores how Generative AI can give wings to the travel industry.
Structurally, the travel industry is made up of three broad sets of players:
- Transporters: Airlines, railways, buses, rental cars/bikes, and cruise lines.
- Enablers: Infrastructure managers, marketing/ticketing partners, maintenance providers, security etc.
- Complementors: Providers of services that some passengers will need before and after their travel.
Digitalization has altered why and how customers choose travel service providers. Digital disintermediation has enabled a growing chunk of customers to make their travel bookings via the internet in DIY mode. Bargaining power has shifted from service providers due to the emergence of business ecosystems comprising complementary service providers and multiple digital payment options. Traditional intermediaries like travel agents have therefore had to reimagine their value propositions.
Individual players face different competitive intensities, demand and supply drivers, and risks in their respective markets. In their own context, each player can use Generative AI to create and hone competitive advantage.
Transporters
While I use airlines as an example, the thinking applies to all transporters, with appropriate adjustments for how each mode of transport functions and engages with customers.
To optimize profits, airlines must ensure that each flight across their entire network operates at near-full capacity and maximises realisation per seat. Generative AI algorithms can help achieve these goals by offering real-time discounts on unsold inventory using criteria such as the number of competing flights, time of the day, connectivity options and destinations. Offers can be customized based on sales channels (website, app, travel portals, ecosystems etc.), and ecosystem members (banks, credit card issuers, payment apps, alliance partners etc.). AI can be used to analyse passenger volume and price trend data to reschedule existing flights and enter into codeshare agreements to optimise profits without adding to fleet size or staff.
Generative AI can enhance operational efficiencies and safety. Based on input such as aircraft maintenance records, flight paths and weather conditions, AI can trigger additional safety checks. AI can be used to predict in-flight food & beverage demand, minimising waste and stockouts. In combination with information on carbon footprints, AI can help corporate and retail customers make better choices to achieve their decarbonization goals.
AI will also play an important role in designing and manufacturing aircraft, trains and ships in ways that improve safety and fuel efficiency. This will help reduce lifecycle ownership costs while reducing environmental damage.
Enablers
Airlines and other transport solution providers offer largely commoditized services. Customers choose based on factors that shape their ticketing and travel experience. These include ticket prices, ease of booking, flight schedules/connectivity, punctuality, reliability, safety, aircraft type (which determines seating configuration, leg-room, and space for cabin baggage), seating/interiors, food & beverage services, and loyalty benefits.
To illustrate the potential of AI, it is useful to deconstruct a customer’s journey into three stages.
Before travel
Customers search for suitable flights through airline websites, apps, travel agents, and travel portals. Some may search on one channel but buy their tickets through another because of better pricing or offers. Generative AI will allow marketers to present customers with personalized real-time offers around pricing, payment options, bundles etc. Constructed using data points gathered legally from diverse sources (banks, hotels, loyalty programs, behaviour on websites/apps/chatbots), such insight-driven approaches can help airlines manage the challenge of overbooking, which has financial and reputational costs.
Travel agencies and other intermediaries harness immersive technologies such as Augmented Reality (AR) and Virtual Reality (VR) to give potential travellers a sense of the destination from the comfort of their homes. Using Generative AI tools, cruise companies or airlines can create personalized content based on a potential customer’s profile, the inputs they provide via the app, website, physical office or call centre and reviews, travel blogs etc. Such personalised content is likely to be more effective in shaping purchase decisions than standard brochures or videos.
During travel
AI can enhance the customer experience in many ways. AI-powered robots or AI-assisted agents can handle most enquiries, thus reducing queues and wait times. The ability to respond in multiple languages reduces the risk of miscommunication or customer frustrations due to not knowing local languages. AI can be used to verify the identity of people, thereby making the process of entering transport hubs and check-in smoother. Suspicious individuals and activities can be detected quickly so that appropriate responses are triggered. AI can improve baggage handling and speed up tracking of lost luggage. It can predict delays due to inclement weather or other factors and quickly communicate the revised timings to passengers via multiple communication channels.
After travel
The customer’s “journey” and experience with enablers and transporters often continues even after the actual travel concludes. Complaints are sent via email, call centres, apps, or posted on social media. AI can streamline the process of handling complaints via intelligent chatbots integrated with websites or apps, messaging platforms or calls by humans where necessary. Further, generative AI can analyse complaints and identify causes, thereby enabling corrective actions. Integration with conversational AI platforms can further enhance the reliability of cost-effective automated complaint handling, a key determinant of customer satisfaction.
Many service providers routinely gather customer feedback; however, analysing it to identify actionable insights and implementing remedial measures can take a long time. Important insights may sometimes be missed. In addition to recurrence of complaints, this creates a negative perception about the provider, impairing brand loyalty. Generative AI can streamline this entire process, enhancing customer experience and loyalty.
Complementors
People travel for various purposes. Customers of the travel industry also need complementary services such as urban transportation, hospitality, healthcare, entertainment, etc. Generative AI can help providers of these complementary services create and manage business ecosystems profitably by improving the efficacy of targeted marketing campaigns, delivering transparent revenue sharing, and streamlining partner management.
Enabling repeat business
Like any other business, the travel industry relies on repeat business. Generative AI can efficiently combine inputs from diverse sources (profile, buying behaviour, preferences, social media activity etc.) to develop robust customer personas. This helps providers boost customer engagement by delivering personalized content via preferred delivery channels. The result: better brand recall that increases the odds of profitable deals.
Some words of caution
The transformative potential of Generative AI and other types of AI is undoubtedly seductive. Like electricity, AI can be a good servant. The risk is that it is a bad master. Be careful when you integrate AI into your business operations. Make sure that you use the right datasets to train your AI tools and that biases and errors do not creep into them. Generative AI uses massive amounts of data from many parts of the enterprise and outside. Some of this may be personally identifiable information governed by stringent regulations globally. Leakage of such data or other confidential information can pose legal, reputational, and business risks. Robust governance mechanisms must be in place to safeguard data and ensure accountability.
Adoption of AI may make some roles redundant- including in the travel industry. Equally, though, new roles will be needed for businesses to get more from their AI investments. Manage this transition with sensitivity.
PS: If you are curious about how Generative AI can give your travel-related business a boost or how the service sector (e.g., waste management, construction, accounting, law, consulting, advertising, publishing etc.) is benefiting from AI, contact me at [email protected].
Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, in more than 50 countries, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace.
