Extinction Song: The Impact of AI on Travel Agencies

For 178 years, the traditional travel agency reigned supreme. Companies like Thomas Cook thrived in an industry light in competition and thick with helpless and dependent travelers as their primary customers. Much has changed in the past two centuries, to say the least. For one thing, travelers are far less helpless than their recent ancestors. In light of the growth of search engines and OTAs offering flights, hotels, car rentals, and travel activities, the traditional agency finds itself at a competitive disadvantage. And in the case of Cook, is facing a kind of digital evolutionary extinction event. But the real comet about to disrupt the travel industry, is surely artificial intelligence and machine learning. 

OTAs are also at risk

Even ubiquitous online travel agencies aren’t immune to the rush towards total AI-driven personalization. While they are scrambling to build data pools filled with customer profiles, preferences, purchase histories, and the like, they are still lacking the key data that can truly enable travel personalization. Namely, an airline’s travel data. For example, when you book a flight on an OTA, you may not have access to all the options when it comes to seat upgrades, baggage allowances, nor the ability to pay for items with airline loyalty points. Most of this data is currently controlled by airlines. Travel data by itself (i.e.: origin and destination or number of people traveling together), or intuited assumptions based on this data can be leveraged to know when and where passengers are going to be, how long they’ll be there, and even the reason why they’re traveling. Airlines have insight into the typical pains and stresses that go along with traveling, and airlines alone have the ability to alleviate that stress by serving up appropriate offers at optimal moments.

AI and timing-based offers will rule them all

Digital retailers like Amazon have mastered the ability to use their AI-driven suggestion engine to provide cross-sell opportunities to their customers. That may be fine for someone buying a toy robot and getting a suggestion to purchase batteries for that toy at the same time. This isn’t really full personalization since it only address a single need at a single moment in the customer’s purchase journey and doesn’t open the door to even more (potentially lucrative) options. For a traveler, conditions and needs change at any moment along the journey, like: lost bags, inclement weather, showing late to the airport, etc. These travel data points can be evaluated by AI, enabling airlines to serve up timing-specific offers that can address bumps along the journey.

An airline’s travel data can drive personalization

Unlike the digital retail example above, airlines can leverage their own data to make offers based not only on timing, but for the reason for the trip. For example, just because you were happy with spending extra on VIP lounge access for your business travel, doesn’t mean you want it when you’re traveling with your family.  Or if a family’s plane is delayed until well past supper, AI could intuit the need to locate a family-friendly restaurant nearest to their hotel. Without insight from travel data, passengers might get offered things they don’t want - like when you get ads for vacuums right after you buy a vacuum. How many vacuums do digital advertisers think you need? Airlines can do one better by knowing exactly what a passenger needs, when they need it. And this makes all the difference when it comes to driving ancillary sales and improving the travel experience.

All this takes us back to the beginning. Airlines can operate like travel agencies of old by offering personal, curated travel experiences. They can also operate like OTAs of today, with efficient mobile-based, digital tools and frictionless purchasing paths. But they can also leverage a travel commerce platform to serve up highly personalized offers to drive ancillary revenues and customer loyalty. The Guestlogix platform comes with a wealth of travel products and services and can be integrated with an airline’s branded offers, as well as their partners and suppliers. The AI-driven suggestion engine makes offers based upon each passenger’s profile, purchase and search history, wish listed items, as well as an airline’s travel data. Over time, it continues to grow and become enriched with new data as passengers interact with the platform. Contact us if you’re interested in learning what the Guestlogix platform can accomplish for your airline.