Will an AI Help Plan Your Next Vacation?

Ever wanted to plan a vacation without having to worry about flight options, places to stay, or what to eat—all while saving money? Artificial intelligence (A.I.) is turning this wish into reality, sparking a revolution across the travel sector through custom experiences for travelers. From trip itinerary planning to handling traveler details, A.I. now can impact every step of the journey.

McKinsey’s survey estimates that generative AI (genAI) could unlock between $2 trillion to $4 trillion in annual value across various domains, and travel is no exception. A.I. is empowering consumers to make informed decisions through predictive analytics, reducing the guesswork often linked to planning trips. Moreover, according to a recent report by Statista, 40% of US adults are already using AI-powered virtual travel agents for trip planning in 2024.

However, as AI becomes a bigger part of how we travel, it also raises significant concerns about consumer data privacy and whether we're losing the personal touch in our journeys.

A.I.-Powered Travel Planning: The New Norm?

In travel, A.I.'s impact seems twofold. On the consumer side, A.I. is reshaping ways for trip planning, a fragmented and time-consuming process for travelers. Travel booking platforms including Agoda are already harnessing A.I.-powered machine learning to recommend and optimize booking prices for flights, and lodging options to its customers.

Historically, personalization in travel has been a challenging issue primarily because of the low purchase frequency and customer data spread being across various platforms. Each trip often carries a different motivation, making it difficult for traditional systems to understand and predict customer preferences based solely on previous clicks. This is where A.I. models play a crucial role.

“The real challenge lies in efficiently gathering this context from users. Relying solely on traditional interfaces to extract such detailed information often led to high user expectations not being met by the website’s recommendations,” Amirali Mohajer, CEO and co-founder of A.I.-powered travel platform hostAI, told me. “Today’s AI-powered language models are adept at capturing context and interpreting text. They can significantly enhance travel personalization by understanding what a traveler seeks in their next adventure.”

On the other hand, A.I. is providing travel brands with a significant opportunity to enhance their online presence and direct engagement with consumers. Dynamic pricing recommendations by A.I. are helping hotel owners maximize revenue and occupancy rates.

“By automating personalization, even smaller accommodation providers can now effectively communicate their offerings, potentially shifting the industry towards a new standard of direct distribution. This innovation could fundamentally alter how travel services are marketed and sold, making them more accessible and efficient for both providers and consumers,” Mohajer told me.

Can A.I. Replace Human Travel Agents?

Achieving a level of A.I. that offers the warm, personalized touch of a human travel agent is no small feat and involves overcoming persistent technical challenges within the travel sector. For instance, Air Canada's chatbot misled a traveler by promising a discount that wasn’t available. The chatbot assured the consumer that he could book a full-fare ticket for his grandmother’s funeral and apply for a bereavement fare afterward. However, when the consumer sought the discount, Air Canada informed him that the chatbot's information was incorrect. This kind of error, where AI tools provide inaccurate or misleading information, is known as "AI hallucination."

Despite such challenges, many major travel companies are adopting AI technology. Last year, Lufthansa Group launched "Swifty," a genAI-driven business travel assistant designed to streamline corporate trip planning and booking processes. Powered by OpenAI’s GPT-4 language model, Swifty can overhaul travel experiences for consumers — from planning and payment to solving consumer queries in real-time, all within a single chat interface.

Data privacy remains another significant concern across various domains, not just in travel but in broader A.I. applications as well. Recently, Australian travel agency Inspiring Vacations was accused of exposing sensitive customer data by accidentally leaving its database publicly accessible. Totaling 26.8 gigabytes, the database included potentially sensitive information such as passport images, travel visa certificates, itineraries, and ticket files.

"AI systems frequently encounter hurdles with reasoning and taking effective actions because of hallucination. This limitation might pave the way for a revival of traditional travel agents, but with a new twist: they'll be enhanced by AI," Mohajer told me. “For technology deployments to succeed, particularly those aiming to foster intimate user relationships like AI chatbots, building and maintaining trust is crucial. Users need to feel confident that their data is handled responsibly.”

The Future of AI in Travel: What's Next?

AI is no longer just a futuristic concept in the travel industry—it's a present-day reality transforming how consumers plan and experience travel. As technology advances, Mohajer believes that A.I.'s role in the travel sector will likely evolve into a continuous, personalized travel companion.

This companion would seek out the best opportunities for future trips and enhance the in-destination experience by eliminating the common frustration of navigating a new place.

“Imagine an A.I. system that finds deals and recommends destinations tailored to individual preferences, possibly even lesser-known locales that might better match your interests. This shift could mitigate over-tourism by diverting travelers to less crowded areas and make travel more affordable and enjoyable overall," he added. “The vision is to create a seamless, personalized experience that eliminates the need for endless searches and planning across multiple platforms—a challenge that remains open yet highly pursued by industry giants and startups alike"