Despite stiff competition from OTAs, influencers and now AI platforms, according to PhocusWire, the traditional agency market is holding its own, valued at over USD $450 billion globally.
However, as digital platforms become ever more sophisticated, what role will the traditional play? A number of publications examine the impact these innovations will have on booking channels over 2024.
Christine Wang, managing director of the Lufthansa Innovation Hub GmbH, told Travel Weekly, "While generative AI has transformative potential in a variety of travel use cases, it will likely take some years before there is widespread verticalization of the technology in travel. In 2024, we mostly anticipate refinement of its hitherto most impactful implementations in travel, such as itinerary planning for large OTAs, AI travel assistants (e.g. Swifty) and hospitality customer support."
According to a blog post by Dmitri Koteshov, a senior business and tech editor, AI is considered the most transformative innovation in the tourism sector.
CNHI News reports that the AI market in the travel and hospitality industry is projected to exceed USD$1.2 billion by 2026, with an annual growth rate of approximately 10%, as reported by market research from IndustryARC.
As influencers are blurring the line between content creation and travel agencies, advisors are also tapping into digital platforms to connect with a broader audience.
AI offers personalized travel recommendations by analyzing a traveller's history and preferences. It allows agents to predict emerging travel trends, ensures the best pricing in real-time, and enhances post-booking customer service by providing timely reminders and suggestions.
"Artificial learning platforms are doing a lot of the hard grunt work of finding things out," Zane Kerby, president and CEO of the American Society of Travel Advisors, told CHNI. "It's finding these things and presenting options to the advisor much more quickly than we have been able to do in the past."
Additionally, when combined with Virtual Reality, AI offers travellers a preview experience, letting them virtually explore destinations before booking.
AI as a virtual travel agent or concierge
Prior to a trip, consumers can seek personalized recommendations from AI regarding sightseeing, dining, accommodation, and budget optimization. The AI generates itineraries based on aggregated data from common travel searches. However, individual travel goals vary, and AI lacks the expertise a destination expert with personal experience possesses.
But AI-planned travel can produce misleading information.
"When you really look under the hood and you start probing at it, you realize there's mistakes, there's misinformation and most of all, it lacks a soul," Cameron Hewitt, director of content and editorial at Rick Steves' Europe, says. "It lacks that personal travel touch. "
Colin Smyth, vice president and general manager at Flywire told Travel Weekly, "Based on a recent survey we did of global travel providers across Australia, Italy, Japan and South Africa, we uncovered that travellers are increasingly foregoing conventional, 'off the shelf' vacations in favor of personalized trips that deliver unique experiences, often off the beaten track--so called 'experiential travel."
"While ChatGPT and other AI tools can certainly provide a base or supplement an itinerary, it has a long way to go to fully replace human-planned trips. A big part of my job is knowing members personally and treating them as I would friends or family. If I know a family member has a bad knee, I'll choose a journey with less walking. If a member loves art, I'll suggest a trip around a gallery opening date or special exhibit," Inspirato SVP Destination Experience, Ashlee Collins, told Forbes.
Collins says, "My prediction with AI in the travel space is that, even if the technology improves and travellers become more trusting of it, we'll start to lose the human connection and excitement that can come with planning a trip. I love my job because I get to create memories for our members and build custom itineraries with my own recommendations included from my own experiences."