Generative AI could be a game changer for travel planning
Generative artificial intelligence (AI) holds significant financial opportunity for travel companies willing to capitalize on growing consumer willingness to use the tech, according to a recent report from Oliver Wyman. The consulting firm surveyed 2,100 travel consumers in the US and Canada in March 2024.
The survey found 41% of consumers have used AI for travel planning or inspiration, up from 34% in August 2023.
“Consumers are avoiding two major pain points when using generative AI for travel planning– information overload and the time spent navigating multiple sources for inspiration and planning for travel that meets their needs,” said Lawrence Burka, principal at Oliver Wyman.
Fifty-eight percent of respondents and 82% of recent AI users said they are likely or very likely to use the technology for planning and inspiration in the future – instilling confidence that utilization will continue to grow.
AI is more popular with younger travelers, with 59% of those under 45 years old using the tools for travel planning compared to 31% of those over 45 years old. In addition, over 75% of consumers are happy with the travel recommendations provided by AI tools.
When choosing a tool, consumers have more trust in those offered by brands they frequently use or with which they have a loyalty program membership.
Earlier adoption of AI technology could unlock significant financial opportunity for travel companies. According to Oliver Wyman, AI integration makes it likelier that consumers will book a complete trip based on recommendations from the tool – increasing average trip value for brands through the sale of ancillary services and products and packaged travel offerings.
Of the users who booked AI-produced travel plans, approximately 44% followed through with booking specific activities and dining suggestions recommended by the tool.
The report estimated that online travel agencies (OTAs) could increase their booking share of the US online travel market by up to 17% by 2029 if travel suppliers continue to forego investments in AI. This could result in up to $2 billion extra in commissions to OTAs.
“However, travel brands have been relatively slow in developing customer-facing generative AI tools. This presents a missed opportunity for travel brands to enhance customer loyalty, incentivize direct bookings, and offer personalized recommendations to expand itineraries,” Burka added.
