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The Top 5 Ways AI is Unlocking Growth Opportunities in the Travel and Hospitality Industry

Discover how artificial intelligence is revolutionizing customer experience and operational efficiency

June 2024 5 MIN READ

Scott Eberle
Director of Business Value Services, Salesforce

Let's talk about the exciting world of artificial intelligence (AI) and how it's shaking up the travel scene! Picture this: your trips are no longer just trips; they're tailor-made adventures crafted with the finesse of a seasoned explorer, all thanks to AI. It's not just about picking the right spot or making sure everything runs smoothly; AI is the secret sauce making travel dreams a reality. But what's the real deal for the travel biz, you ask? Well, buckle up because the stats are in, and they're mind-blowing!

According to a study by Accenture (1), a staggering 84% of travel executives believe that AI is the key to achieve their growth objectives. And the numbers don't lie - research by McKinsey & Company reveals that companies that invest in AI are seeing a revenue uplift of 3 to 15% and a sales ROI uplift of up to 20% (2). With the global travel and tourism industry set to soar to a breathtaking $15.5 trillion by 2033 (3), as projected by World Travel & Tourism Council, the need to embrace AI has never been more pressing. So, let's dive into the top five ways AI is charting a new course for revenue growth and cost savings in the travel industry.

Personalized recommendations; it’s like having your own travel genie!

Take Airbnb, for instance, where AI algorithms sift through a treasure trove of data to suggest accommodations tailored to each traveler's unique preferences and past bookings (4). guest finds a potential rental, AI will help summarize reviews for listings with excessive reviews so guests can get familiar with the property quicker. And it's not just Airbnb; Booking.com also harnesses AI to recommend hotels, flights, and activities based on user behavior and search history. With 57% (5) of travelers willing to share personal data in exchange for personalized experiences, as revealed by a study from Salesforce, it's clear that personalized recommendations are the cornerstone of a memorable journey.

Automated task management; where AI steers the ship with unmatched efficiency and precision.

Delta Air Lines leverages AI-powered software to automate routine tasks such as scheduling and inventory management for ground crew and flight attendants (6). And guess what? It's not just about saving time by reducing manual workload and ensuring timely task completion; it's about freeing up their crew to focus on giving you the best travel experience possible. With BCG’s findings indicating that automation can increase productivity by 30-50% (7), not only does AI-driven task management make things run smoother, but it also saves some serious cash along the way!

Chatbots and virtual assistants; the tireless companions ready to lend an ear and offer solutions at the drop of a hat.

Research by Salesforce reveals that an incredible 64% of agents with AI chatbots are able to spend most of their time solving complex problems, versus 50% of agents without AI chatbots (8). With Expedia's in-app travel planning experience powered by ChatGPT, travelers can get recommendations on places to go, where to stay, how to get around, and what to see and do based on the chat (9). The new trip planning experience brings in intelligent shopping by automatically saving hotels discussed in the conversation to a “trip” in the app, helping members stay organized and making it easier for them to start choosing dates, checking availability, and adding on flights, cars or activities. With round-the-clock assistance and personalized support, chatbots are redefining the customer experience one interaction at a time.

Predictive analytics for pricing and inventory management

AI-powered predictive analytics enable travel companies to optimize pricing and inventory management strategies. By analyzing historical data, market trends, and customer behavior, AI algorithms can forecast demand and adjust pricing dynamically in real-time. This proactive approach allows businesses to maximize revenue by offering competitive prices while avoiding overbooking or underutilization of resources. Using AI algorithms to predict demand and adjust pricing accordingly, H Hotels Dubai was able to increase room occupancy by 9.1 percent and revenue by 13.7 (10) percent year-on-year. Similarly, airlines like Delta Air Lines utilize AI algorithms to predict demand for flights and adjust ticket prices accordingly. By dynamically pricing seats based on demand forecasts, Delta can optimize revenue and maximize profitability while ensuring optimal resource from pilots and flight attendants to meals and beverages.

Hyper-personalized marketing

According to a study by Invesp, an astounding 44% (11) of consumers are likely to become repeat buyers after a personalized shopping experience with a company. Turtle Bay Resort is a shining example, utilizing AI-powered marketing platforms to deliver personalized offers and recommendations to its customers. By analyzing customer data and interactions, Turtle Bay creates targeted campaigns that have led to a 20% increase in booking conversions and a 15% rise in repeat experience bookings (12).

Change is in the air, and guess who's steering the ship in the travel and hospitality industry? Yep, you got it – AI! It's like our trusty captain, guiding us towards epic growth and innovation. From personalized recommendations to super-smooth task management and those ever helpful chatbots, AI's leading the charge. And let's not forget about predictive analytics and hyper-personalized marketing – they're all on board too! So, as we embark on this adventure into the future, one thing's for sure: the sky's the limit, and we're just getting started!

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About the Author

Scott Eberle
Director of Business Value Services, Salesforce

Scott Eberle serves as the Director of Business Value Services at Salesforce, boasting a rich professional history spanning over 15 years in spearheading business transformation and strategy. His expertise has been sought after by some of the globe's most prominent Travel and Hospitality enterprises. At Salesforce, he collaborates closely with customers, strategically aligning goals and priorities to navigate industry challenges and leverage innovation. Scott specializes in constructing robust business cases and implementing metrics to assess the transformative impact and quantify the value of strategic endeavors.