We all have our opinion on AI; whether it’s a useful partner in our everyday lives or will likely to try and suffocate us in our sleep, but what cannot be denied is that it’s here and it’s making its presence felt in travel planning.
From a distribution perspective we have to recognize that, as a revenue and distribution company, this is a changing landscape. We have to recognize that the future is all about having the right channels.
A study from McKinsey, using Adobe data, released earlier this year, found that 29% of respondents to a survey reported using generative AI for travel-related tasks, including travel inspiration, local food recommendations and transportation planning. In all, 84% of those who used generative AI said the tools had improved their experience.
People love to plan travel. According to Expedia, travelers spend an average of five hours researching every trip, viewing 141 pages of travel content, and it is here where the opportunity for hotels within the new AI shopfront is most apparent.
The conversation with AI is so much more refined than the one we have with Google. With Google you’re asking for a hotel in London, with generative AI you can ask for a four-star hotel in London with a rate of £250 close to your meeting location and ask for a dinner reservation at a high-end Japanese restaurant not too much of a walk away.
Independent hotels need to make sure that their websites have all that information: the hotel’s proximity to train stations, can you bring dogs, is there a vegetarian menu. You need to have your website assessed for AI optimization to ensure that you can leverage that generative AI for your property.
Many hoteliers are paralyzed by indecision. Do something to get started, and then you can always fine tune it later. If you can bring people to your website, with our management of rates and distribution, then you can make sure that there are offers available there that make it more attractive to book direct. An OTA is only the start of the funnel. You cannot put your whole website into an OTA. If you’re making a passionate decision about a holiday, you’re going to research further, so make sure that the content on your website includes an offer that keeps people there and booking.
The McKinsey study also reported that generative AI was expected to drive web traffic, changing the search engine optimization landscape, with the survey showing a 45% lower bounce rate among consumers directed to travel websites by a generative AI source, indicating that travelers are trusting it to match them with useful sites.
Earlier this year Expedia unveiled its generative AI strategy, which sees it eager to expand its reach from its own site to all of the touchpoints the travel funnel, using generative AI, to create the ultimate travel companion. This means partnerships with, amongst others, Uber and working more closely with Meta and TikTok.
“We’re focused on advancing our intelligent, trusted global marketplace that takes on the complexity of travel, so travelers and partners can focus on what really matters: unforgettable experiences,” said Ariane Gorin, CEO, Expedia Group.
Of course, the OTAs have invested heavily in ensuring that they are present at all points on the guest’s planning and booking journey. We’re always going to have the challenge of the OTAs. They will always have the spending power, but it’s not always about getting that booking directly the first time. It’s about getting the business, full stop. Then, once you have the guest, you can leverage that relationship, regardless of how that transaction came to your bank account.
You do what you need to do to get into the game.
Robert Holland is managing director for the U.K. and Ireland at HotelPartner Revenue Management.
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