While generative artificial intelligence continues to dominate news headlines and conference discussions, it isn’t the only travel-related technology that is impacting business operations today or likely to impact them in the near future.
With this in mind, Phocuswright’s expert analysts came together for a webinar to discuss the technology and innovation trends impacting travel and detail how they’re impacting the industry.
Moderator Mike Coletta, Senior Analyst, Research and Innovation at Phocuswright, began by making clear the importance of keeping up with technology trends.
“At least two things are certain about travel,” he said. “One, it shows that travel demand is resilient and can bounce back even from the worst of circumstances. And two, [second]Now more than ever, travel companies that don’t embrace emerging technologies are on the road to extinction.
Subscribe to our newsletter below
“And while generative AI is clearly the biggest emerging technology to watch, there are plenty of other advancements in travel tech that will impact how travel businesses operate in the coming years.”
One example is the rise of self-sovereign identity (SSI) and biometric authentication. Senior technology and enterprise market analyst Norm Rose explained the potential of SSI to give travelers control over their own personal data, creating opportunities for a more personalized and frictionless travel experience while reducing the risk of fraud.
“The role of robust, flexible and verifiable digital IDs at the heart of automating and personalizing the travel process is [in] “The future of connected travel that we’ve been talking about for years will become a reality through this technology,” Rose said.
“The important thing to keep in mind right now is that this isn’t just happening to the travel industry, this is happening to the market,” he added. “This is going to be driven by governments, this is going to be driven by businesses, this is going to be societal. Once we get used to these digital identities, these verified capabilities, I think the infrastructure will be in place to move us forward and really accelerate the frictionless aspect of travel.”
ROI for generative AI is mixed so far
Of course, generative AI was also a topic of discussion: As Senior Research Analyst Cathy Walsh explained, the technology is driving efforts in 2023 to optimize everything from customer interfaces to back-end operations, and this year was centered around companies’ efforts to get up and running.
“There’s a lot of hype and hyperbole that comes with emerging technologies,” she says, “so we decided to dig deeper to really understand what travel companies have learned so far, what’s working and what’s not.”
Most companies are focused on integrating generative AI into their own assets, which has led to a common theme in the types of applications travel companies are using, from chatbots, virtual assistants and consumer-facing review summaries to customer service agent assistance and text translation.
Internally, it will help customer service agents and improve coding efficiency.
The key question is what the return on investment will be, she said.
“So far, results have been mixed. Travel companies note that GenAI-powered products offer several benefits, depending on the company, including saving customers time and getting them deeper into the funnel faster, increasing engagement and, in some cases, boosting revenue…
“Expedia, meanwhile, has stated that the ChatGPT integration has had a minimal impact on revenue and conversions. It’s also interesting to note that Expedia’s former CEO Peter Kahn candidly stated late last year that the potential for AI to plan an entire trip is, quote, wildly overstated.”
Where the travel industry lags in technology integration
Analyst Marcus Schreyer explored why some technologies, such as virtual and augmented reality (VR/AR), Web3, and the Internet of Things (IoT), are under-appreciated in the industry and how they can be better utilized in travel.
Fear that new technology will disrupt the established human touch is one reason why the travel industry has lagged behind other sectors in adopting new technology, but Schreyer explained why travel companies should aim to integrate the latest technologies that complement the human touch, rather than replacing it.
As an example, he pointed to the potential of applying big data to the hospitality industry.
“There’s probably no other industry that has this level of access to consumers and data points, and yet we still don’t execute it well at times,” he said. “How many times have you checked into your favorite space and been asked, ‘Is this your first time staying with us?’ And my hope, and this is what we’re seeing now come to fruition with generative AI.” [is] This allows us to leverage data, improve personalization, and potentially avoid huge investments.”
Environmental issues in corporate travel
While corporate travel appears set to regain pre-COVID spending levels, with increased video conferencing offset by increased demand for face-to-face connections, the emergence of thousands of companies pledging to reduce emissions and meet sustainability targets is creating new challenges for the sector.
“These pledges mean a lot,” said Lorraine Sileo, senior analyst and founder of FocusRite Research, “and they can have a big, positive impact on the environment.”
But the catch for companies in the business travel sector is that the easiest way for companies to limit their greenhouse gas emissions is to cut flying distances, she added. “Any commitment to science-based targets will hit corporate travel numbers for years to come,” Sileo predicted.
Those most at risk are those focused on serving corporate travel needs, she said, as well as suppliers and other partners who are unable to meet companies’ carbon emissions reduction targets.
But while sales have been strong when it comes to business travel profits, Sileo warned about what an economic downturn could mean.
“The post-COVID recovery, higher prices and increased demand have made up for some of the billions of dollars in travel that were cut from the budget,” Sileo said. “But as soon as the economy weakens, companies will have a great excuse to cut travel spending. [travel] Spending money — and the big excuse is called the environment.”
The Rise of Central Bank Digital Currencies
As the ups and downs of cryptocurrency fade into the background, Rose again spoke about the emergence of central bank digital currencies (CBDCs), state-controlled digital currencies that would act as digital versions of national currencies and seek to combine the promised efficiency of cryptocurrencies with the stability of traditional banking.
According to one research firm, 134 countries and monetary unions representing 98% of the world’s GDP are considering CBDCs.
“We’re at 98 percent,” Rose emphasized. “In May 2020, it was 35. Many countries, including China and India, are in the exploration and development stages and have several launched.”
Given how slow the travel industry has been to adopt digital payments, Rose said travel companies should evaluate the global market to prepare for further developments in this trend.
“The more digital currency gets added to this, the more likely it is that governments will also provide digital identity as part of this,” Rose continued. [U.S. Department of Homeland Security] There is a bidding for digital identities. So there is also a nexus between central bank currencies and digital identities.”
learn more
