AI: The Future of Travel Industry

Artificial Intelligence (AI) is the future of the travel industry, and travel companies that take the lead in AI roadmaps will have technological and economic advantages over others. AI comes in many different forms, and executives need to focus on practical applications that can exponentially scale data intake and analysis. In the travel industry, supervised uses of AI are much more controlled than generative applications that have been popular in the news. Supervised learning models work by labeling historical outcomes for pricing as 'good' or 'bad' based on how given actions contributed to the ultimate goal of maximizing revenue. The AI can then assess new variables and suggest pricing modifications consistent with those 'good' decisions. Through thousands of inputs and repetitions of this action daily, it trains to do more of the good and less of the bad and becomes smarter as time progresses. This allows airlines and travel companies to optimize the price for any given flight, offer ancillary products, overbook, price cargo space, and deploy marketing dollars. AI is data hungry, but the advantage is that it's highly scalable. The art is in how you design it, and it can theoretically learn any task you give it. If there is a pattern out there, it's able to learn that pattern and recommend what action to take to maximize the 'reward' it's trained to seek. It's important for travel executives to understand that AI is not a monolith and that they should be thinking about practical applications that will ultimately benefit the bottom line of their companies. The travel industry can take advantage of AI models to improve their decision-making, and every executive should be thinking about how they can take their AI roadmaps to the next level in 2023 to gain a competitive advantage.