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Will AI be an optimiser or disruptor for travel businesses? What it actually means for you.
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At the Travlaw Big Tent event on Wednesday, Matt Gatenby asked the inevitable question of the panelists. “How do you think AI will impact travel in the next 5 years?”

Mark Duguid, from Kuoni UK, will be focusing on back office optimisation and efficiency. Removing the tedious tasks and making sure the human face of travel remains central to their customer experiences and service.

Brian Young, from G Adventures, sees the opportunity to train an in-house model to improve their customer’s ‘Dream phase’ of their trip - taking G Adventures itineraries, product offering and consumer data in a closed environment to make the best recommendations to customers searching for their next adventure.

Both of these are great examples of how AI can be used to optimise existing products or processes. These applications of AI would be considered AI workflows - taking deterministic tasks (e.g. you know roughly what the end output should be) which require an element of flexibility but ultimately, the businesses are still keeping a high level of control and observation of the results. 

For internal optimisation, travel businesses of any size should consider Software as a Service (SaaS) providers actively investing in AI to make operations smoother. The reason to go for SaaS rather than instance based software or bespoke builds is that you will benefit from the evolving product as it improves. This includes industry-specific solutions like Felloh, and broader platforms like Xero’s Just Ask Xero (JAX). JAX combines the flexibility of AI with smart controls that help it understand accounting data, making it more accurate and secure than regular AI models. Using these tools can help you work more efficiently and free up time to focus on creating great customer experiences.

The same goes for customer facing AI applications, most SaaS CRM systems will be actively investing not only in the automation of task and data entry, but also helps you understand and predict your customer data. Self-building for these kinds of tools would be very expensive so checking the market for options where you can pilot your recommendations AI would be a strong proof of concept for most SME travel businesses.

But are we missing the bigger picture? What if AI in travel will not be an optimisation technology but a disrupting one? The fact is, it’s not just businesses that can use AI, consumers have it too. At the Travlaw event, consumer loyalty to travel brands was highlighted as a changing consumer behaviour - travellers care more about value and experience than sticking with one travel company.

So, let’s flip this around and think about consumer adoption of AI.

Online booking has been disrupting the travel sector for well over 20 years, this combined with the rise in low cost airlines and a changing consumer behaviour towards “real” or “unique” experiences over “bucket and spade”, means there are more people willing to plan trips themselves. In previous years, the research and “dream phase” may have centred around finding a tour operator who is offering those “unique” experiences, now this phase can be done with easily accessible AI tools, planning everything with much less effort.

In this example, a consumer is willing to trust ChatGPT (or their preferred free AI tool) to build their tour for them, specifically “14 day travel itinerary in Sri Lanka for a family of 3 - the child is 2 years old”. 

This prompt would return a pretty generic holiday, one which would essentially return the same result as if you were to Google the same query. Where the consumer adoption of AI comes in, is the willingness to share more details in the question, guiding the response to be more tailored to their specific needs. Layering on specific requirements like budget, flight time preference, minimum nights per stop, transport preference and activities of interest will return a more personalised recommendation. What’s more, it’s one which isn’t based on the existing products of a tour operator but any accommodation options or activities which OpenAI can find.

The Itinerary: "Here’s a proposed 14-day itinerary for a family trip to Sri Lanka tailored to your requirements. It balances comfort, activities suitable for a toddler, and a blend of nature, culture, and relaxation."


"Let me know if you'd like adjustments or more details!"

Upon review, it all looked a bit much for a 2 year old, so now comes the tweaking phase:

"Here’s an updated itinerary with fewer internal transfers, more time at the beach, and accommodations offering child-friendly amenities, including childcare where available."


"This revised plan allows for more relaxation while catering to family needs. Let me know if you’d like further adjustments!"

What are the risks to the consumer?

As every tour operator knows, with great power comes great responsibility. Something that the tech savvy consumer may not take into consideration would be how their consumer rights are going to be impacted by curating their trip themselves and booking directly with suppliers.

If the consumer is creating their own tour with AI assistance, they won't be protected by ATOL and Package Travel Regulations if something goes wrong or gets cancelled.

Another issue is the black box of how and why AI is making the recommendations to the end customer; is this something that could accelerate over-tourism? Taking the effort to refine your queries can alleviate some of this risk, but it also shows that true hidden gems will not be on the cards for this trip:

"Great question! The accommodation recommendations were chosen based on a combination of factors, such as:"

What are the threats and opportunities for travel businesses?

Let’s start with the threats.

The Sri Lanka example here took very little time to create a potential itinerary. While ChatGPT is not able to make the booking directly, it can return the exact options of how and where to book:

"I can't directly send booking requests or make reservations on your behalf, but I can guide you on how to book these accommodations. Here’s how you can proceed:"


"Would you like me to help draft inquiry emails to the accommodations or assist with any specific details for the bookings?"

Where AI Agents come in as a next-level offering would be the ability for all of this to be reserved automatically. Whether this will be a threat soon is yet to be determined; it would take a huge level of trust from the consumer and would likely be closely linked to adoption of similar agents in different sectors. A trend to track this will be AI agent restaurant bookings as an indicator of behaviour change with end consumers.

In terms of mass market adoption, OpenAI just launched their own Agent tool Operator, so it will be easier than ever to get started: 

Operator can be asked to handle a wide variety of repetitive browser tasks such as filling out forms, ordering groceries, and even creating memes. The ability to use the same interfaces and tools that humans interact with on a daily basis broadens the utility of AI, helping people save time on everyday tasks while opening up new engagement opportunities for businesses.

For retail agents, there is a threat that consumers will go direct, but some groups of customers might be slow to adopt these new tools.

The understandable frustration for bespoke tour operators is that building relationships with local suppliers has been the Unique Selling Point for your business. AI is going to get that for free. For some, one solution to that problem is to keep your itinerary details vague - after all, AI can't recommend what it doesn't know about! Unfortunately, in some cases, the secret sauce is already out there thanks to customer reviews and recommendations which you’ve likely spent the last decade actively  encouraging people to share.

A point which Mark Duguid, from Kuoni UK made at the Travlaw event was if you do decide to go down the path of using AI in your customer facing products or services, be conscious that you’re no longer offering the human experience. Losing that personal touch could be a big turn-off for consumers; if you’re relying on a readily available AI model to answer their questions, are you still providing a service worth paying for? 

So that’s the threats, but what are the opportunities?

An important point to note is that AI costs are steadily getting cheaper as more models become available. This trend is making AI more accessible, meaning more businesses can use AI, and handling large-scale tasks that need lots of computing power.


Over the past 20 years, online travel agents (OTAs) fundamentally changed how traditional high street tour operators and travel agents work.  They won customers by making everything more convenient, clear, and easy to use. Now, forward-thinking travel businesses have a chance to use AI in a similar way—not just to compete but to lead.

AI presents an opportunity to revolutionise how travel businesses operate, offering new ways to make customer experiences better, simplifying processes, and stand out from competitors. Just as OTAs made digital tools to make travel planning more accessible, AI can put your business at the forefront of what's next.

The key is being visible and easy to find. The more detailed and open you are about what your business has to offer. the more likely you are to become the go-to choice for consumers using AI-powered tools to plan their trips. Instead of creating barriers around your unique experiences, focus on making them easy to discover.

Much like SEO (Search Engine Optimisation) helped businesses get noticed by customer  in Google searches, now AI Optimisation (AIO) will make sure your offerings show up when customers use AI to search for trips. By embracing this approach, you can secure a competitive edge and adapt to the evolving travel landscape.

Make sure consumers understand why booking with you makes their trip better - not only do they get protection if things go wrong, but your human connections in destinations can create the truly memorable moments they're looking for.

And if customers choose to book individual parts of their trip separately, make it easy for them to book those parts with you. This will reduce the burden of PTRs for travel businesses who have direct relationships with unique suppliers in destinations. 

What to do next?

  1. Automate your manual tasks with AI-powered Software as a Service
    You don’t need in-house AI tools to do this, most software providers will be doing the heavy lifting for you

    If you’re on older systems which aren’t well integrated with your wider business systems, maybe it’s time to review if you have the right tech in place to start winning with AI. A good starting point would be customer relationship management systems that automate data entry or generative AI for personalised marketing campaigns.

  2. Step up your SEO and AI Optimisation (AIO) strategy
    Make sure your experiences are easily discoverable in consumer-generated itineraries. If you’ve invested in search engine optimisation (SEO) in the past, a lot of that work will be paying off now, but if not, it’s never too late to tag your images, set meta descriptions and make sure your most important content is machine readable.
  3. Experiment cautiously with customer facing AI tools
    If you’re not yet using any AI in your business, now is not the time to rip out your search function on your website and replace it with an AI chat bot! As an end consumer you probably know how frustrating it can be to deal with a poorly trained bot. Instead, find a problem you have which is worth solving but not business critical to start learning in a low-risk environment.

    For us at Felloh, we did this with our AI decline analysis which adds value to our customers to understand next steps for a declined card or open banking payment but isn’t giving the keys to business critical data to an AI model.
Written by
Caroline Rennie
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