AI in the travel industry

Have you ever wondered about the impact of artificial intelligence on your journeys? Although you may not directly notice its presence in the tourism industry, you probably receive personalized recommendations for places to visit. Or perhaps you use chatbots to book a flight or hotel. The travel industry is undergoing a profound change thanks to artificial intelligence, and this is just the beginning, as both major and smaller travel companies are embracing these changes. Read on to find out more.

AI in the travel industry - table of contents:

How can the travel industry benefit from the implementation of AI?

AI opens up significant possibilities for the travel industry, allowing for cost optimization, enhanced customer service quality, and increased revenue. Here are some specific advantages:

automation of back-office processes, such as handling bookings, for example. This saves time and reduces costs,
analyzing customer preferences and behavior to personalize offers and recommendations, which increases the chances of purchase and loyalty of satisfied tourists,
chatbots that streamline communication with customers, minimize frustrating wait times, and increase satisfaction while using the service,
dynamic pricing systems based on demand and supply to maximize revenues.

As you can see, AI can support the tourism industry on many levels. Moreover, it helps in effectively managing seasonality and dealing with unpredictable events like the COVID-19 pandemic.

Source: DALL·E 3, prompt: Marta M. Kania (https://www.linkedin.com/in/martamatyldakania/)

Artificial intelligence in Airbnb

Airbnb uses artificial intelligence to recognize users’ interests, personalize search results, and enhance overall travel experiences.

One of the key projects at Airbnb in the field of AI is the LATEX system. It is used for extracting property attributes, such as amenities or views, from unstructured textual data. Based on this information, Airbnb creates personalized property recommendations tailored to the preferences of each guest.

Furthermore, the company has developed a proprietary system for categorizing photos of rental properties. Thanks to this system, it is possible, among other things, to automatically select the best cover photo for a given category, such as beach or mountain settings.

Airbnb is also intensively developing machine learning models to evaluate the quality and attractiveness of listings. These are later used in presenting search results. The higher the rating, the higher a listing is positioned.

Expedia – the most effective implementation of AI

Expedia is intensively implementing solutions using artificial intelligence in such areas as:

predicting customer lifetime value (CLV),
generating a variety of travel recommendations,
optimization of ranking models.

Expedia’s machine learning (ML) systems can accurately estimate customer lifetime value or the total value of a customer’s transactions over time. This information is later used for marketing and customer service strategies.

The company is also constantly improving its recommendation algorithms. It is now using mechanisms to increase the variety of suggested trips so that every customer can find something suitable.

At Expedia, work is also underway to improve the models responsible for ranking listings in search results. Various methods are being tested, including those that enhance the diversity of presented hotels or flights.

Source: Investopedia (https://www.investopedia.com/)

Trivago and optimizing accommodation ratings

Trivago specializes in finding and comparing accommodation deals from more than 200 partner sites. The company’s main challenge is to properly rank the hundreds of thousands of available hotels, apartments, and lodgings so that the most relevant ones appear at the top of the results.

To this end, Trivago makes intensive use of machine learning models. Among other things, they use historical data on the popularity of a given accommodation and the preferences of guests with a similar profile.

However, to avoid presenting users only with the most popular and frequently chosen destinations, the company has implemented a special exploitation-exploration mechanism. Its purpose is to balance recommending proven, well-rated listings with exploring less-known ones in search of hidden gems.

Summary. The future of AI in the travel industry

Artificial intelligence is already permeating almost every aspect of the travel industry today. It supports both key business processes of companies and directly influences the experiences of travelers.

Experts predict that the role of AI will continue to grow in the coming years. New machine learning models will allow for an even better understanding of customer needs and the creation of personalized, unique experiences during trips.

But to achieve this, it will be necessary to strike a balance between digitalization and preserving the element of adventure and surprise that makes travel so special. Without a doubt, the future of tourism belongs to artificial intelligence.

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Author: Robert Whitney
JavaScript expert and instructor who coaches IT departments. His main goal is to up-level team productivity by teaching others how to effectively cooperate while coding.
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