The travel and tourism sector’s contribution to the global economy is projected to reach an all-time high of USD 11.1 Trillion in 2024. With consumers demanding greater choice, increased personalization and faster responses, businesses in travel and hospitality must enhance Customer Experience (CX) to stay competitive. Despite cost pressures, companies will increase their investment in technology (particularly Gen AI) to meet the expectations. However, the challenge lies in determining the most impactful areas for investment.
Technology-driven Personalization
Personalized service, once reserved for elite travelers, is now expected by customers across the board. A recent Market Impact Report by HFS Research, in collaboration with WNS, titled “Pivoting Toward the New Frontier in Travel & Hospitality,” revealed that 31 percent of travel and hospitality firms have experienced the demand for personalization as the most significant shift in customer expectations.
Right from the start of interacting with a new or returning customer, Generative AI (Gen AI) can create tailored multimedia content, marketing messages and special offers. Artificial Intelligence (AI) can also recommend flights and other travel arrangements based on an analysis of the client’s location, age, probable income bracket and previous trips.
Boosting Operational Efficiency
By analyzing data from flight sensors and comparing it to historical data, Gen AI can predict potential failures and optimize maintenance schedules. Moreover, Gen AI plays a crucial role in reducing aircraft boarding and turnaround times. From check-in to boarding, AI technologies help airlines improve operational efficiency, manage queues and reduce turnaround times.
Minimizing and Managing Disruptions
In the event of a flight delay / change, Gen AI can identify affected customers and proactively reach out with real-time updates from news, social media feeds and other sources. Furthermore, it can scan online reviews and updates to provide alternative solutions and assess their impact on travelers’ itineraries and reservations.
Thanks to its ability to analyze vast volumes of data from various sources, AI can monitor global weather patterns with unprecedented accuracy. The technology can draw on data from radar, satellite pictures, onboard aircraft sensors and weather centers. It can even use unstructured data, such as information from conversations, emails and social media interactions, to refine meteorological predictions. Consequently, air travel routes and schedules can be amended and passengers warned of potential delays and cancellations well ahead of time.
AI-powered tools can also help pilots optimize flight routes to reduce airlines’ impact on climate warming. Making advances in this area, American Airlines recently collaborated with Google to test its AI-powered contrail forecast maps, which leverage large data sets from satellite imagery, weather patterns and flight trajectories. These maps enable pilots to identify and avoid flight altitudes that are likely to produce contrails. American Airlines pilots successfully reduced contrail occurrence by 54 percent, marking a significant milestone in mitigating aviation’s climate impact.
Meanwhile, United Airlines now sends text messages to its customers with links to local, real-time radar maps during bad weather. This not only helps travelers understand how the weather affects their flights, it also provides early warnings and up-to-date information for timely re-arrangement of schedules.
Improving CX Through Enhanced Feedback Loops
Emerging technologies will soon handle repetitive tasks like checking in passengers at gates or hotel receptions, allowing staff to focus on personalized services and immediate complaint resolution. AI tools can analyze guest reviews and real-time feedback to identify strengths and gaps, enhancing customer experience. Additionally, integrating Gen AI into Natural Language Processing (NLP) systems can automate post-call processing for customer service agents, including ticket tagging, call summarization and follow-ups.
The Role of Big Data and Analytics
Big data and analytics have the potential to transform decision-making and service delivery for travel and hospitality firms. In a way, they form the backbone of all the AI and Gen AI applications. Analyzing large volumes of information reveals guest preferences and patterns / trends that can inform strategy. This can drive all kinds of initiatives from personalized marketing campaigns and dynamic pricing to anticipating customer expectations and sustainability efforts.
For instance, by studying guest data, hotels can offer tailored amenities and marketing messages, predict visitor needs like preferred snack items or prepare for a busy season that requires additional staff. This data-driven approach boosts satisfaction through relevance while optimizing resources for efficiency.
However, according to Market Impact Report by HFS Research, in collaboration with WNS, titled “Pivoting Toward the New Frontier in Travel & Hospitality the greatest challenge in adopting enabling technologies, as cited by 45 percent of the respondents, is the lack of data quality and management. The fragmented nature of the digital ecosystem hinders organizations from achieving transparent operations and a unified, 360-degree view of their customers. Solving this puzzle will empower firms with new avenues for value creation and positive disruption.
Looking Forward
Travel and hospitality companies will continue to develop new experiences to gain a competitive edge. However, their success will increasingly hinge on meeting and exceeding customer expectations. Gen AI – with its ability to learn, adapt and collaborate in ways that mimic human intelligence – is set to play a transformational role in this regard. By integrating AI-driven solutions, firms in this sector can enhance customer satisfaction, optimize operations and acquire actionable insights to drive growth in an increasingly demanding world.
