At this point, is it possible to go a day without reading a piece about artificial intelligence and the effect it will have on X, Y or Z?
Well, if you're reading this, today's not that day for you.
Because today I'm wondering what the use of AI by consumers will mean for travel-related companies. There have been plenty of stories looking at the different angles here, but what I'm looking at right now is something out of the Harvard Business Review talking about how generative AI is going to disrupt online travel platforms. Are we going to see the disrupters disrupted?
The premise here is that as more consumers turn to AI, whether it's the AI that's built into Google search results or something like ChatGPT, how will that change their booking behaviors?
"By reducing the need to click through to other sites, these systems are beginning to displace the gateway function that aggregators depend on, eroding their ability to capture intent at the top of the funnel, the foundation of their traffic and revenue," according to the article.
Later on in the piece, it says that the AI tools will still send users to one of the booking platforms to actually make the reservation and complete the sale. So, good news for them is that they still make the sale, but there's a cost.
"... Discovery is drifting away from aggregator websites, reducing the opportunity to shape intent and influence purchase choices. As more planning moves to AI interfaces, online travel agencies will have fewer openings to cross-sell products, weakening the network effects that support their scale."
The article is quite interesting, and I recommend you give it a read. Everyone is seeing the early signs already of how big a part AI platforms play in helping some travelers plan their trips. The question now, or at least one of the questions, is how are hotel companies going to adapt to this changing online search environment?
Many are already preparing, looking at how they can better design and populate their hotel websites to attract the attention of AI searches and (hopefully) return non-hallucinated information to travelers. But this will also affect distribution channel strategy over time as more travelers turn to AI. Hoteliers may have to reevaluate the full value that online travel agencies present to them.
So much of this is still speculative, of course, but it doesn't hurt to start thinking about these things if you haven't already.
On another note, if you're going to be attending the Americas Lodging Investment Summit in Los Angeles at the end of the month, keep an eye out for the CoStar News Hotels team. It's always great to see familiar faces and meet new people.
You can reach me at bwroten@hotelnewsnow.com as well as on LinkedIn.
The opinions expressed in this column do not necessarily reflect the opinions of CoStar News or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.