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How AI is making travel more personalized, efficient, and affordable

AI in the Travel Industry

Travel industry participants are encouraged by forecasts that AI will add about $1 trillion to the global tourism business by 2025. This will be accomplished through new AI-enabled capabilities such as automated customer support, smart marketing targeting, voice- and facial recognition, and improved demand management. Marketing firms are likewise gushing over AI’s potential to generate hyper-personalized itineraries for travelers.

However, AI is not new to the tourism business. Machine Learning (ML), AI’s younger brother, has long been employed in the airline, hotel, and transportation industries for demand and price management. AI is (only!) anticipated to fine-tune pricing algorithms so that providers maximize revenues. Which begs the question: Why is the business striving so hard to sell the benefits of artificial intelligence to travelers?

Who will gain from artificial intelligence’s expected industry-changing capabilities? Can we trust AI to deliver the greatest ideas and pricing, or should we rely on our trusted VPN Chrome extension to stay secure and get the best travel discounts online?

Travel companies are already benefiting from machine learning and artificial intelligence.

Even if travelers are unaware, online travel platforms and service providers have been utilizing ML for years. They expect to use AI to become more profitable in the future. Airlines, for example, are aware that AI can improve how they calculate prices in the face of external factors such as demand, historical data, neighboring events, cancellation rates, increased competition, and so on. AI can help travel vendors become more competitive and profitable:

  • Forecasting and supply chain management: Previously, travel businesses depended on historical data, industry experience, and, at times, “gut feel” to forecast trends. AI now allows them to incorporate any number of other elements that may influence forecasts. Hotels can correctly forecast room occupancy levels, as well as establish the most profitable rates for specific seasons and adjust prices appropriately.
  • Automated booking processes: Travel bookings can be automated to reduce errors with expanded, all-in-one transaction chains for linking flights, seamless transportation, tourist trips, and lodging.
  • Streamline operations: In the travel business, online check-ins, contactless purchases, touchless technologies, and remote interaction are being used to make customer interactions faster and more streamlined. Self-service kiosks are far faster than humans at handling check-in and check-out, customer queries, and payment processes.
  • Customer-facing AI: Chatbots powered by AI can interact with passengers to provide personalized recommendations on attractions, shopping, restaurants, transportation, and lodging.
  • Fraud detection: AI can detect minute signals that may reveal fraudulent or harmful conduct.
  • Artificial Intelligence of Things (AIoT): This is a hybrid of AI with IoT (Internet-connected hardware) that improves access management and personal security. For example, facial recognition software can be used to detect potential threats or to expedite the check-in process at airports.
  • Smart navigation systems: Every smartphone includes a GPS that can assist users in navigating unfamiliar cities and locations.
  • Natural language processing (NLP) with AI: Used to translate website information, emails, or chatbot interactions into many languages, allowing individuals from all over the world to easily discover their travel destinations.

Then there’s Hyper-Personalization, the most publicized AI feature.

One of the most anticipated future benefits of AI is hyper-personalization. It promises to integrate data science, AI, and marketing to create truly individualized user experiences for each passenger. Retail businesses and restaurants in tourist areas, for example, can provide customised offers and discounts based on a customer’s purchasing history and personal preferences.

What is the extent of hyper-personalization?

Before the AI can create a program for you, it must first understand everything about you. It must be well-versed in every part of your life. Is that correct? Let’s start with a simple question about making a travel plan and then delve into a few details:

Do you avoid taking public transportation? Why?

Is it because you dislike crowds? AI must know enough about your personality type and entertainment interests to keep you away from congested transportation systems in major cities while encouraging you to utilize them in less congested areas.
Or do you avoid it because it makes you feel in some manner vulnerable? AI must be familiar enough with your mental health history to recommend private transportation and additional support services that will put you at peace.
Or are you the type of person who will set aside your usual inclinations when traveling abroad? AI must have sufficient knowledge of your social life and party habits to account for this as well.

Does the scenario seem implausible? It isn’t. Is AI intelligent enough to function as described? Unless you’ve been taking privacy precautions for a long time. The cost of fine-tuning the essential AI capabilities is the limiting issue.

AI is expected to incorporate data from consumers’ previous search history, social media, and platforms such as Amazon,Alexa and Google Home. The data brokerage sector already has enough data to support such projects. For the first time, though, AI can assist humans in weaving it into cohesive, intimate personal profiles, transforming data into usable personal information.

How will AI learn everything it requires to provide personalized recommendations?
Data brokers, and hence all travel suppliers, have access to massive databases of common user activity data that can span decades. Until now, successfully combining, cleaning, and leveraging all of that data has been a hard and excessively expensive undertaking. However, AI is far more efficient than current systems at sorting information and connecting disparate data sources.

With new techniques to track client behavior and target marketing campaigns to the proper individuals, AI is energizing the marketing sector. AI-powered SEO tools are transforming customer behavior analysis. They can assess people’s user preferences and identify those who are most likely to make a purchase.

As a result, the next question is: For whom will AI work? Who is seeking for the greatest deal: you or the firms that know everything about you, even which buttons to press to make a sale?

Will AI benefit travelers or the advertisers that pay for ads?

How can you rely on the solutions and service providers recommended by AI? How does the AI know they are reliable? Could travel suppliers (including a few shady ones) purchase their way into the system (e.g., through an advertising scheme similar to Google Ads) in order to profit financially from AI-generated recommendations?

Are we willing to give up our privacy controls, trust AI’s masters, and hope for the best in light of the tech behemoths’ huge profits and execrable privacy practices?

Final thoughts on artificial intelligence and the future of tourism

AI has enormous promise. AI-powered applications like ChatGPT are now good at answering simple questions and summarizing well-documented facts. However, it cannot provide the same degree of depth and information that a knowledgeable local guide can.

It can assist tourists in quickly creating a vacation itinerary, searching for the most popular tourist destinations, and generating useful reference links. However, “personalized recommendations in just a few clicks” is currently beyond its capabilities – and perhaps it should remain that way for the sake of our privacy.

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