Generative artificial intelligence is revolutionizing the leisure travel industry, reshaping how consumers plan their vacations just in time for the summer season, according to a recent report from consulting firm Oliver Wyman.
The report, titled "Why Generative AI Is a Game Changer for Leisure Travel," highlights that 41% of surveyed Americans and Canadians have used generative AI for trip inspiration or itinerary planning, up from 34% in August 2023. The findings indicate that if travel suppliers continue to lag in adopting generative AI, online travel agencies (OTAs) could boost their market share of US online travel bookings by up to 17 percentage points by 2029. This potential growth could lead to an additional $2 billion in commissions for OTAs.
"Generative AI helps travelers avoid the pitfalls of information overload and the time-consuming process of navigating multiple sources for trip planning," "Despite these advantages, many travel brands have been slow to develop AI tools for customer use, missing a significant opportunity to enhance loyalty, promote direct bookings, and provide personalized travel recommendations," explained Lawrence Burka, a principal in Oliver Wyman's Transportation and Services and Pricing, Sales, and Marketing practices.
Going back to the genAI tools
Among those who have leveraged generative AI for travel planning, 82% are inclined to use it again in the future. Younger travelers, particularly those under 45, are the most frequent users at 59%, though 31% of travelers aged 45 and older also leverage these tools. Additionally, over three-quarters of users are satisfied with the travel suggestions generated by AI, and there is a high rate of bookings based on these recommendations.
Also, more than 90% of recent users who booked AI-generated travel plans also reserved specific activities (44%) and dining options (43%), as suggested by the tools.
Loyalty
Elite loyalty members of travel brands show a strong preference for generative AI, with 45% using it for recent travel planning. The technology is also popular among cruise enthusiasts, with 54% of respondents who have cruised since 2022 recently using AI for their travel arrangements.
This evolving landscape underscores the transformative potential of generative AI in making travel planning more efficient and tailored to individual preferences, highlighting a critical opportunity for travel brands to innovate and better serve their customers.
Companies are starting to intoduce genAI and AI tools, to streamline the experience and help customer with travel planning. For instance, Booking.com has unveiled its latest offering - the AI Trip Planner - which incorporates OpenAI's ChatGPT API to deliver a conversational experience that assists users in initiating their trip-planning journey.
