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Artificial Intelligence: Driving the Next Revolution in Travel?

5/22/2016
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Artificial intelligence (AI), that is the ability of machines to imitate human intelligence processes, and machine learning, a branch of AI concerning the possibility for computers to learn when exposed to new information, are acquiring an increasingly important role in the travel industry and are expected to be among its main disruptors in the next few years.

In particular, the huge amount of data collected by companies through the online and mobile channels from internal and external sources, the technological advancements in data analytics and the rise of AI agents, such as chatbots, are expected to drive significant changes in the way travel companies market their products, communicate with their customers and are able to assist them throughout the travel experience.

AI at the heart of big data analytics and personalisation

Leading travel and technology companies, including among others, Google, Facebook, Expedia, Priceline, TripAdvisor and Airbnb, are currently working on the application of artificial intelligence and machine learning technologies to address the needs of their customers in a more efficient and customised way in order to increase conversions and loyalty.

Artificial intelligence is at the heart of big data analytics used to predict customer behaviour and offer intelligent recommendations based on customers’ preferences. Automated and instant analysis of the huge amount of data companies collect about their customers will mean in the next few years an increasingly personalised shopping experience for travel consumers, which at the same time will result in higher rates of conversions into sales and in a more productive shopping experience for consumers. Moreover, apps will be able to offer to travellers on the move customised suggestions based also on location, time of day and available tourist services in the surroundings.

The rise of chatbots and virtual assistants

Over the next few years, travellers will increasingly interact with artificial intelligence agents in the form of chatbots and virtual assistants, to ask for information and assistance, check the status of their bookings, and make travel reservations.

Chatbots (powered by AI, including natural language processing) can send consumers structured messages and call to action buttons, personalising their communications by processing data on customers’ preferences in order to, for example, suggest the most relevant travel services to book.

Thanks to machine learning technology, chatbots and other artificial intelligence agents constantly learn about consumers by interacting with them, and work out new data relationships in order to predict customers’ preferences on the basis of the past behaviour of consumers with similar profiles.

On the basis of customers’ actual or predicted preferences, chatbots and virtual assistants can also send notifications and suggestions through app push messages, messaging platforms or emails.

Companies already using or planning to use chatbots in travel include Booking.com, Expedia (through Facebook Messenger chatbots), Kayak, KLM, Hyatt and Carlson Rezidor.

AI to change business models in travel

The rise of artificial intelligence is expected to drive significant changes in the business models of the leading travel companies, as AI applications will become a key competitive factor in this industry.

Travel companies will need to increasingly collect data on consumers at each point of contact with them. They will need to analyse this data in real time to gain insights into expectations and preferences of travel consumers. And they will need to use these insights to personalise all their interactions with customers through their online and mobile channels.

Cooperation with technology players such as Google, Facebook and TripAdvisor will also be increasingly important due to the large amount of strategic consumer data owned by these companies.

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