In the nearly two years since OpenAI released its now globally renowned ChatGPT, the travel industry has been abuzz about the potential of generative artificial intelligence to transform the industry.
It has become a main character in the travel technology plotline – startups have popped up dedicated solely to AI travel planning, larger companies have purchased smaller AI-focused entities to improve their own AI strategy and industry giants have come out with generative AI products.
But as the larger world considers how AI might continue to evolve and alter the world around us, is the travel industry where it should be in terms of adoption?
PhocusWire touched base with industry leaders at The Phocuswright Conference 2024 to get their take on where things stand in terms of the pace of AI adoption, expectations and what they are excited about when it comes to the technology. The piece builds on our recent check-in with senior industry leaders on general AI hype and how companies are making it part of their wider strategies.
Responses have been edited for brevity and clarity.
Has the travel industry embraced generative AI to the level you would expect?
Erik Blachford, founder of Pine5 Partners and former CEO of Expedia: Yes, though as the technology evolves (pun intended), the progress will be nonlinear, we are still in the experimentation stage in terms of real world applications in travel.
Melissa Maher, CEO and founder of Pinnacle Enterprises Group and former Expedia Group CMO: The industry has dipped its toes into generative AI, but it hasn’t fully cannonballed into the deep end — yet. While there are promising examples, like AI-driven concierge services and personalized trip planning, too many companies are still treating AI like a shiny new tool rather than a strategic game-changer.
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Eric Bailey, managing director of Purposeful Travel Solutions and former director of employee travel at Microsoft: They’re definitely trying to embrace [AI]. I don’t see the impact yet of what it probably could do. And I think part of it is that you’re dealing with incomplete information to make decisions.
Stuart Greif, executive vice president, chief strategy, innovation and operating officer of Forbes Travel Guide: I think I have more realistic expectations informed by direct experience. And I think all of a sudden, in two to three years, there’s going to be what appears to be a giant step in seeing capabilities. It has been building behind the scenes along the way. And I think that’s the thing … [it will happen] gradually at first and then all of a sudden.
Marilyn Markham, vice president of AI and automation strategy at American Express Global Business Travel: It doesn’t help that my expectations were low… Travel is very experiential, right? It’s a human experience… There’s a lot of prep that is more tech heavy and [needs] planning, I would say with generative AI… it wasn’t an organic and automatic fit…. I would say [that in the] last year, we have seen the interest that we would have expected from the world of travel, maybe not business travel.
Have you seen any specific AI initiatives that you’re particularly excited about?
Blachford: I’m an investor in OTTO, a startup using AI agents to book unmanaged business travel, which I think is going to free up a huge amount of time for administrative and executive assistants everywhere.
Maher: Yes, but it’s not just about the technology — it’s about the mindset shift. Expedia’s AI integration for personalized search is exciting because it doesn’t just enhance the booking process; it rewrites the traveler’s journey from discovery to decision-making. Another standout is Accor experimenting with generative AI for operational insights, a move that could transform the ‘back of house’ into a predictive engine for seamless guest experiences. These examples prove that when used creatively, AI doesn’t just solve problems — it redefines them.
Bailey: Nothing… groundbreaking. I don’t think [anything] that I see is like, “Oh, that’s giving exactly what you want.” I still feel as if we’re searching for stuff and what we want to find. … We thought when [this started and we all got excited], that maybe it would be like, “This is going to change everything overnight,” … but I haven’t seen that.
Greif: Gen AI video.
Markham: I’ve seen a lot of people trying to use generative AI to be their travel agent in the leisure space. But the challenge there has been accuracy of data. Because if the pandemic had never happened, I think it would be really good, but because it has data that’s sort of getting old and dated, there are a lot of businesses in our industries locally that have gone out of business, have changed the servicing and restricted service, and so it’s not up to date.
Do you think the industry is moving fast enough with this technology?
Blachford: AI is changing so quickly that it’s a tall order to keep up just on the experimentation side, which a number of companies seem to be doing well, and it’s risky to deploy scaled systems ahead of the next phase shift, it’s a time for test and learn across the board.
Maher: Honestly? No. The industry is cruising at a comfortable altitude when it should be breaking the sound barrier. Travelers’ expectations are evolving faster than many companies can adapt. AI has the power to anticipate needs before travelers even articulate them. The question isn’t whether we’re moving fast enough — it’s whether we’re daring enough to lead the pack rather than just keeping up.
Bailey: There’s the opportunity to really, sort of rebuild things almost from the ground up. But this industry is notoriously slow, and there’s a lot of moats that have been dug, as opposed to bridges built. And so we’re definitely seeing people wanting it to happen, but not people needing it to happen.
Greif: Travel never moves fast enough, some of that [is] structural, some of its capital. I think that is the nature of human beings and large organizations. So the frictions are not the technology. Even as the technology still needs to advance, the frictions are more about the existing models of safely experimenting, of gradually getting and ecosystems have to develop. I do think there is a gestation period, and we are in that gestation period.
Markham: There’s definitely all the FOMO to fuel the fire. Fast enough is really relative. I think we’re definitely moving cautiously, which is fair, because we have to retain the confidence of people. I think we’re seeing more innovation, and I would say fast paced moving with startups. And the challenge there is that it takes a while for a startup to mature… so for right now, it may look like there’s not enough coming to market, but there’s a lot being done.
How would you suggest the industry might better adapt and scale as others are?
Erik Blachford: From booking to customer service to coding assistance there are so many ways for the travel industry to test and learn, it’s really a question of curiosity and enthusiasm at this point, and online travel tends to punch above its weight in those categories.
Maher: The industry needs to stop playing defense and start innovating offense. Invest in AI not just for incremental improvements but for bold moves that redefine what hospitality means. Imagine predictive tools that not only recommend hotels but design an entire travel experience tailored to your preferences — before you even open a browser. Beyond that, companies must embrace cross-industry collaboration. Why not learn from healthcare or retail, where AI has already cracked personalization at scale? Scaling isn’t just about resources; it’s about rethinking the limits of what’s possible.
Bailey: I think it’s going to have to be either bringing costs down or bring[ing] revenues up. The revenues up is always speculative, though… because nobody knows exactly if something’s going to increase revenue by 1% or 100%, so it may even be bringing the cost down… Figuring out, how do we make it more efficient?
Greif: I think the easy answer is, one bite at a time… focus discreetly, prioritize one or two use cases that are right. Get that done. It’s also getting your employees to get familiar with and learn how to use the tools and creating
Markham: Others? Are they though? If you think about just general consumer technology, there are not a whole bunch of companies you can point to who have had a fantastic adoption of generative AI. I feel there’s more FOMO than reality right now around generative AI and enterprise adoption, whatever your enterprise is.
