How AI Is Being Used in the Travel Industry

ChatGPT and chatbots are transforming much of the business world -- and the travel industry is no exception. You may be surprised to learn that artificial intelligence (AI) is being embraced in many ways within the travel and tourism industry.

Travel companies (such as airlines and hotels) use AI to predict customer behaviors (like flight and hotel cancellations). Similarly, booking platforms, such as Airbnb (ABNB +1.91%), are tapping into ChatGPT to give travelers better, more personalized advice.

Getting valuable, personalized advice is one of the most difficult challenges in the travel industry. Being able to do so would give Airbnb a competitive advantage.

Airbnb already knows a lot about its guests and hosts, so an AI travel concierge based on an individual's preferences makes sense as an application. Sites like Expedia Group (EXPE -0.54%) and Booking Holdings' (BKNG -1.37%) Kayak and Booking.com have also added ChatGPT plug-ins to provide recommendations.

2. AI for travel booking

The internet disrupted traditional travel bookings, making human travel agents obsolete as travelers opted to book flights and hotels through travel sites like those owned by Expedia. However, AI could provide the next advance in travel bookings.

Chatbots and AI assistants are now being deployed on social media sites like Meta Platforms' (META -2.88%) Facebook Messenger and WhatsApp. They can provide sample itineraries based on a range of criteria, but they are not yet able to make bookings.

Start-ups like Booked.ai and Trip Planner AI can help with tasks such as booking flights. Larger online travel agencies, like Booking.com and Expedia, are also starting to use chatbots to provide customers with real-time suggestions, including the cheapest flights available. Other AI apps can build travel itineraries for customers based on their interests, budget, companions, and the purpose of their trip.

3. AI for travel forecasting

Traveling isn't cheap, so it's no surprise that there are plenty of tips for saving money on your next trip. Countless niche websites advise users on when to buy airline tickets to get the best deals.

Hopper, for example, uses machine learning algorithms to predict where airline prices are headed so users know when to buy tickets. Its database uses historical flight prices to guide its predictions. Other sites, such as Kayak, also use algorithms to let users know whether they should buy tickets immediately or wait.

Hotels and airlines use similar technology to adjust their prices according to demand and better predict customer needs, such as changes in flight plans. Airlines also use AI for predictive maintenance, reducing the risk of mechanical problems.

4. AI to improve flying

The conventional wisdom on air travel as a consumer experience is that it's consistently worsened. There's generally less legroom, fewer meals, and not as much attention to customer service and accommodating individual requests.

Will AI revolutionize travel?

AI is already opening new opportunities in travel, and the major players are eager to experiment with ChatGPT and other forms of generative AI. Artificial intelligence can make travel easier by enabling seamless booking and offering personalized recommendations. Such features will only accelerate the industry's growth by lowering the barriers to travel.

Consider some of the stocks mentioned if you're looking for investment opportunities in AI and travel. You could also check out this list of AI stocks, consider an AI ETF to gain broader exposure, or research other options in the travel industry. Given the growth of AI in travel, the intersection of the two should present some significant growth opportunities in the coming years.