2 steps forward, 1 step back: AI's role in travel challenging but inevitable

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Photo Credit: Wright Studio/Shutterstock

Artificial intelligence (AI), a technology that as recently as a few years ago was a mystery to many, is now a fast-growing technology in the travel industry, something travel companies budget for, and many are applying it as a business tool that provides efficiencies and improves customer experience. 

While the industry is a long way from a truly autonomous agent powered by AI, experts foresee a bright future, especially for AI technologies that make humans "smarter" by helping them in their jobs.

AI does face hurdles, though, as evidenced by the recent shuttering of WayBlazer, a B2B company that focused on trip-planning applications built on AI technologies.

"While we have not run out of innovative solutions, unfortunately we have run out of funding and time," CEO Noreen Henry said in a statement in late July.

About a month before news broke that WayBlazer was shuttering, Henry discussed the state of AI in the travel industry with Travel Weekly. It has made rapid progress in recent years, she said, compared with three years ago, when leaders in AI were still explaining what it is and how to use it.

"It's no longer just trying AI for AI's sake," Henry said. "But it's [about] where are the business problems, that they have good data, good information to be able to actually leverage this technology to have real business benefits for them."

WayBlazer's demise does not, however, diminish the role AI plays in the travel industry, according to Norm Rose, senior technology and corporate travel analyst at Phocuswright. Rose is also the president and founder of Travel Tech Consulting. In a blog post on his website, he discussed the "hype cycle" in the travel industry that surrounds emerging technology, which inevitably comes with fallout.

For example, he pointed to the emergence of OTAs, initially "dismissed by the offline community, with some believing no one will ever buy travel online." He also cited companies that don't have a mobile strategy or that believe mobile is reserved for searching for, not buying, travel.

With WayBlazer shuttering, Rose wrote, "some of these same travel industry naysayers may declare that AI may have a minimal impact on the travel industry. We have seen inflated claims about AI in terms of voice and digital assistants, causing some to dismiss these new technologies as not ready for prime-time."

But, Rose said, "What many people miss is the evolutionary nature of emerging technology" like AI.

"Bottom line," Rose wrote in an email, "AI is overhyped, but the shutting down of WayBlazer does not mean AI does not have an important role in the travel ecosystem."

In an earlier interview, Rose -- who has been tracking AI and the technology behind it since the 1980s -- said that while the concept of AI is decades old, the technology behind it has developed rapidly in recent years. And while he believes it is hyped, especially around the level of personalization it can achieve, it has some practical-use cases in travel. As an example, he pointed to customer service chatbots.

"In reality, the more successful travel industry applications seem to combine human and AI together," Rose said. Whether it's a desktop tool for the travel agent to make them smarter or a process where we fit AI into the flow, like in a chat, we use it specifically to answer certain types of questions, and then we go to a human when things get too complex."

Lola is a good example of that use case. The Boston-based agency, whose clients communicate with agents through a chat interface, is focused on business travelers. Paul English, president and chief technology officer, said the company uses AI in two ways. First, it personalizes search results based on past travel. Second, it assists human agents by analyzing chats and giving them tips on how best to answer travelers.

Casto Travel in San Jose, Calif., employs a chatbot it calls Marco, which provides post-ticketing services for travelers, such as seat assignments and flight changes. CEO Marc Casto is a co-chairman of ASTA's technology committee, which is tracking AI and its likely impact on agencies. 

Some clients use Marco frequently, he said, while others prefer to communicate only with Casto's agents. He said that mix of clients is fine. The technology is available for those who want it. 

"Just like online booking tools used to be unique and they now are so commonplace," he said, "so will be AI."

Trisept Solutions also has an AI product that helps agents be "smarter." Its Xcelerator platform provides agents with a natural language metasearch of cruises and hotels, the goal of which is to match a client with the most relevant product, according to CEO John Ische. Trisept also uses AI for some back-of-house solutions to improve operations and pricing, providing efficiency benefits. (Xcelerator is powered by the now-closed WayBlazer, and Ische said Trisept is looking into other AI tech options for its platform.)

The key to AI is the data behind it, Ische said. Today, many in the industry are putting in place a foundation of data that can then be harnessed by AI technologies.

"Like any new technology, it does take some time to mature," Ische said. "I really think that artificial intelligence in general is still an emerging technology in travel, and I think you'll see a big influx here, a big ramp-up across the whole travel space."

Allianz Global Assistance started using basic AI technology about five or six years ago, according to Begench Atayev, vice president of marketing analytics. The travel insurer uses AI to develop personalized quotes for customers shopping through its partners: providers such as cruise lines and OTAs and companies in the event-ticketing space. The third iteration of its quoting platform launched last year.

"It uses mathematical prediction models and various machine learning techniques that enhance our ability to offer personalization and improved customer experience," Atayev said.

For example, the platform uses multiple data points to figure out in which state a customer lives. That way, when the customer is in a partner's booking path, he or she won't have to answer that question, and the overall experience will be less disruptive.

Allianz has a lot of data to use: Atayev said the company issues more than 1 billion quotes each year. It uses anonymous data points from those quotes to get better at personalization.

"Good customer experience, satisfied customers, drive more repeat business to our partners and to us, as well," he said. "It's good for customers, our partners and us, too."

Josh Galun, hospitality and travel lead at the Washington-based technology firm Excella, said travel companies are investing more in AI, but the industry is largely playing catch-up. He cited a 2017 McKinsey paper that concluded the travel and tourism sector "was the least advanced in AI and increasing its AI budgets by the smallest amount."

"So there is definitely an element of the industry catching up," Galun said. "But I think that it is really starting to find those use cases where it really makes sense."

Phocuswright's Rose said he hoped to see more AI technology that assists humans in the coming years. But he warned that innovation probably won't come from within the travel industry itself.

"If you look at the dollars being spent by Facebook, by Google, by Apple, these mega tech companies have millions of dollars and attract the best AI people in the world," Rose said. "I think that we're going to see advancements in AI from outside the travel industry, which will then impact travel."

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