The travel landscape is undergoing a fundamental transformation. The rise of generative Artificial Intelligence (AI) and autonomous agents is reshaping how travelers discover and secure their journeys,ushering in a new “agent era.” This evolution necessitates that marketing strategies evolve to directly address these AI systems.

This notable finding emerged from the third installment of the ‘New Agents Trend Series’ by Phocuswright. Experts examined the considerable impact of generative AI on travel sales, highlighting a future where AI becomes the primary channel for search and purchase.

The Shift to ‘Business-to-AI’ Marketing

A novel approach – ‘Business-to-AI’ (B2AI) marketing – was discussed, initially coined by Visa’s Chief marketing Officer. This concept extends beyond customary Business-to-Consumer (B2C) and Business-to-Business (B2B) models, prioritizing engagement with the AI agents travelers increasingly rely upon.

AI Agents as Influencers in Booking Decisions

Platforms such as ChatGPT and Gemini are already influencing traveler choices by offering booking advice. These platforms are increasingly suggesting alternatives, like local rental agencies, to circumvent fees charged by larger platforms. With purchasing and payment features now integrated directly into these AI systems, their capacity to shape booking decisions will only grow.

Julie White,Chief Commercial Officer for Europe and North Africa,Premium Midscale and Economy Brands at Accor,acknowledged the nascent stage of this change,but emphasized the considerable potential of AI to guide consumers to brands.She underscored the importance of building trust, ensuring openness, and providing genuine value through these new tools.

Infrastructure overhaul is Essential

Tom Underwood, Co-founder and COO of Bonafide, predicted significant disruptions due to AI’s ability to handle granular search queries regarding hotel room characteristics, surpassing conventional date-based searches. His company is actively collaborating with hotel brands to refine product data for optimal AI compatibility.

Erik Blachford,former CEO of the Expedia Group,asserted that the proliferation of personal AI agents will necessitate a complete redesign of existing travel technology infrastructure. This includes Property Management Systems (PMS) and Global Distribution Systems (GDS),demanding substantial investment and industry-wide adjustments.

Preparing content and systems for seamless interaction with diverse AI agents poses a major challenge for providers.The recognition of a need for standardized dialog protocols-akin to the NDC (New Distribution Capability) in aviation-was deemed critical.

Hyper-Personalization Redefined

Experts agreed that AI agents, leveraging thorough user preference data, will deliver unprecedented levels of personalization. This goes beyond simple price comparisons, focusing on finding the “best value”, factoring in both cost and desired experiences.

Matthias Keller, chief Product Officer at Kayak, highlighted the emergence of new digital entry points and a shift from displaying numerous results to offering highly tailored recommendations. kayak’s launch of Kayak.ai demonstrates their commitment to leading in this evolving landscape.He noted Kayak’s direct API and NDC connections as enabling a more transactional approach within AI interfaces.

Building Trust in AI-Driven Recommendations

The discussion concluded with pertinent questions regarding traveler trust in AI-generated recommendations, guaranteeing impartiality, and the monetization strategies of these AI agents. The goal remains an agent that prioritizes the traveler’s best interests, free from bias from advertising or commissions.

Did You know? The global AI in travel market is projected to reach $51.98 billion by 2032, growing at a CAGR of 26.8% from 2023, according to a recent report by allied Market Research.

Pro Tip: Travel companies should prioritize data accuracy and accessibility to ensure AI agents can provide users with the most relevant and reliable options.

The Long-Term Implications of AI in Travel

The integration of AI into travel isn’t merely a technological upgrade; its a fundamental shift in the industry’s power dynamics. Historically,Online Travel Agencies (OTAs) held significant control over distribution. Now, AI agents potentially bypass these intermediaries, empowering travelers with direct access to a wider range of options and potentially more competitive pricing.

This trend will likely accelerate the demand for open APIs and interoperability standards within the travel ecosystem. Companies that embrace these standards and prioritize data transparency will be best positioned to thrive in the “agent era.”

Frequently Asked questions About AI in Travel

• What is ‘B2AI’ marketing? It refers to marketing efforts directed towards AI agents rather than directly to consumers or businesses.
• How will AI agents impact OTAs? AI agents may bypass OTAs, offering travelers more direct access to travel options.
• What is the role of NDC in this evolution? NDC provides a standardized communication protocol,crucial for AI agents to access and process travel data effectively.
• How can travel companies prepare for this shift? By prioritizing data accuracy, embracing open APIs, and investing in AI-compatible infrastructure.
• Will AI recommendations always be unbiased? Ensuring impartiality and transparency in AI algorithms remains a critical challenge.
• What are the biggest concerns about AI in travel? Trust, data privacy, and the potential for algorithmic bias are key concerns.
• how will AI change the future of travel planning? AI is poised to deliver hyper-personalized experiences, streamline booking processes, and unlock new levels of convenience for travelers.