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 -1.6%), are tapping into ChatGPT to give travelers better, more personalized advice.

Travel is one of the world's biggest industries and is expected to continue growing as consumers have more discretionary income, remote work allows for increased travel, and younger generations tend to prioritize spending on experiences over goods.

Understanding AI

Understanding the basics of AI

Artificial intelligence refers to the ability of computers and machines to do tasks that typically require human intelligence. This can include any form of pattern recognition, including faces and other images readily recognizable to humans. Machine learning may be the most common form of AI and generally involves computer programs trained with large amounts of data to apply to new data.

In the travel industry, this might appear as recommendations you get on a booking website after choosing a destination or price adjustments based on supply and demand. With the launch of ChatGPT, travel companies are also embracing some forms of generative AI to engage with customers and help make recommendations.

Five uses of AI

Five ways AI is used in travel

Continue reading for a look into how the travel industry is using AI. We'll discuss what AI means in the context of travel, review several AI applications for travel, and look at what's next for AI and the travel industry.

1. AI for recommendations

ChatGPT has changed how people access information. Unsurprisingly, this has implications for travel because the industry is one of the biggest advertising verticals on Google Search.

During a 2023 earnings call, CEO Brian Chesky described his vision for AI at Airbnb, saying it aimed to build the ultimate AI concierge that could give you individualized advice -- unlike chatbots like ChatGPT, which provide the same response to everyone. In April 2025, the company began rolling out an AI customer service agent.

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 -1.69%) and Booking Holdings' (BKNG 0.39%) 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 -0.8%) 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 on customer service and accommodating individual requests.

However, AI tools can improve the traveler experience. Few industries are affected more by the weather than airlines. For instance, flight disruptions can result in millions of dollars in losses. But new sensors, satellites, and modeling are better equipping airlines to deal with erratic weather, including optimizing routes to avoid storms or air traffic.

IBM's (IBM -0.82%) Watson AI is one of the programs that can perform this analysis, integrating data from 100 models and incorporating information from 250,000 weather stations worldwide. Airlines are also using AI in new ways, such as enhancing pilot training, reducing fuel consumption, and even holding connecting flights for delayed passengers.

5. AI for travel itineraries

The holy grail of generative AI and travel is to have a chatbot assistant plan and book a trip for you with just a few commands. For instance, you could tell it you want to go to Miami for three days and stay at a hotel with an infinity pool, and then tell it to make restaurant reservations and other plans for while you're there.

That vision isn't a reality yet. AI systems must improve to provide up-to-the-minute information to make travel bookings at the best prices. However, plenty of companies are working to make this possible.

OpenAI has provided much of the initial infrastructure onto which online travel agencies can layer their data. While we're probably years from this sort of feature, it's clear that this is where AI in travel is headed. Consumers are embracing such tools, which are good at gathering information, but a complete end-to-end experience will take time, as will direct booking through AI.

Efficiency

How AI is making travel more efficient

Behind the scenes or in full view, AI is making travel more efficient, especially for travel companies. Among the areas that businesses are leveraging the new technology are payment processing, customer communications, booking management, and dynamic pricing.

Robotics is also playing an increasing role in travel, for example, in baggage handling. While travelers may get frustrated dealing with AI customer service agents, they should eventually allow airlines and travel companies to lower prices or redeploy spending to areas where it's more valuable, benefiting customers.

Related investing topics

Transform travel

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.

FAQ