Will AI Totally Transform Travel in Asia?

“Our key objective is to remove known but hard-to-solve travel sector pain points,” says Mary Li, Founder and CEO of Singapore-based Atlas, which provides low-cost carrier (LCC) flight content to online travel agents (OTAs). Atlas’s China-based tech engineers have developed a small team of AI-empowered “digital employees”. All day and night, these digital detectives scour airline booking code to flag for immediate repair data holes that cause travellers to receive a dreaded on-screen “Error” message or payment denial while a booking a flight. This could capture millions of dollars of revenue otherwise lost in data space.

Worldwide, tourism has roared back since the pandemic, and Asia Pacific, which endured a slow restart due to long pandemic border closures, is catching up fast.

After slow border reopenings and minimal flight travel during Covid, the Asia Pacific region is catching up to its pre-pandemic travel levels. Image: Wikimedia Commons

UN Tourism forecasts that 2024 will see “a full recovery in international arrivals” compared to 2019. The post-Covid recovery remains unevenly distributed with some global regions (and countries within regions) enjoying a faster turnaround than others. In the first eight months of 2024, Asia Pacific reached 82% of pre-pandemic visitor arrivals. This means 18% of the market is yet to return, but marks a major uplift from 35% at the end of 2023, 75% in 2022 and 93% in 2021.

The return of mass tourism has brought familiar and emerging challenges, or pain points. Online bookings are denied, flights get delayed or cancelled, luggage goes astray, passport lines are long, taxi and ride-share fares surge and hotels overlook room requests that are “subject to availability”. Over-tourism disrupts both cities and small communities. And, for many Asian travellers, the e-payment formats they use daily don’t work in other countries.

The Travel Changemaker?

Can AI tools fix these problems? At this embryonic stage, surge pricing by ride-sharing apps (and dynamic pricing by airlines) shows that AI is suited to the algorithmic manipulation of transactional supply and demand. Fixing flight code errors falls into a similar category. The intersection with unpredictable human behavioural actions might prove more challenging.

AI tools will become more and more ubiquitous. Image: Unsplash

Nevertheless, AI is widely hailed as the travel industry’s changemaker. At last month’s ITB Asia tourism trade show and conference in Singapore, which attracted visitors from 85 countries, AI beat out climate impact, carbon emissions and over-tourism to be the most-debated theme. Used inter-changeably for a spectrum of business processing and home-use purposes, AI is now the lingua franca of tech-in-travel debates. 

Machine learning has existed as a business tool for many years but only since the launch of ChatGPT in late 2022 has GenAI talked directly to people, and vice versa. A scorching uptake pace of GenAI tools by users across Asia questions whether travel firms can respond fast enough. Analysts believe most, if not all, of the travel industry is ripe for AI disruption.

“Last year, 22% of our surveyed users said they feel confident using AI to help them plan and book travel. This year, it was 47%.” says Jarrod Kris, Head of Distribution Partnerships at Skyscanner, which is owned by Chinese online travel booking giant Trip.com.

Hotels & Hyper-Personalisation

It is widely agreed that hotels have plenty to gain from using AI to reframe their revenue strategies. By their own admission, hotels don’t optimise the range of information about their guests that they capture and store. Given a low starting base of technology utilisation, some hotels are cautious about how quickly AI can add value to their businesses beyond customer service chatbots.

Singapore-based Ascott Group of hotels and residencies has launched a chatbot called Cubby, which is “capable of replying to 97% of questions,” from guests says Kevin Goh, the company’s CEO. “That’s just the start. Next, we are looking at booking capability, and hope to roll out a new AI solution by the end of the year.” 

Ascott Group's AI chatbot Cubby in action.

Ambitious hotel groups are hiring start-up entrepreneurs and technicians from fields like banking to broaden their scope of AI engineering. A widely touted goal is to transition hotels into mobile retail platforms where rooms, restaurants and spas form part of the offering, alongside merchandise, partner products and services, tours and experiences – which guests can pick and choose to suite their own preferences. This may be a long-term shot.

“AI has the potential to transform the hotel industry but it will occur in a non-linear, phased approach,” says Amy Read, Vice President of Innovation for Sabre Hospitality. “We will move from data fragmentation to developing unified views of all hotel guests, and that could later lead towards hyper-personalisation.”

Hyper-personalisation is a hot topic. It refers to using customer profiling based on each person’s online history to offer travel products, services and experiences specifically suited for them. Flipped around, travellers could self-personalise every detail of a trip because, in theory, service providers know everything that they do and don’t desire. A debate rages about whether hyper-personalisation is a tailored marketing perception rather than a reality.

Hyper-Digitized Travellers

Unlike grocery shopping or ride hailing apps that we use every day, and which can instantly recall and act upon our usage history, most people don’t book travel frequently. Therefore, there must be huge gaps in the data-based knowledge of travel providers like OTAs that seek to offer the oft-promised “Connected Trip” or “Seamless Trip”?

OTAs want to use AI to capture every single touchpoint and transaction opportunity from trip planning to arriving back home – and each social interaction shared on route. Trip.com group is leading the play.

Trip.com's AI assistant TripGenie.

During China’s three-year isolation from international travel, it found a novel way to tap Chinese consumers’ avid use of short-video apps. Travel is a major driver of video content, which vacationers refer to when seeking ideas for their next trip.

Trip.com built its own mobile content platform adjacent to its booking app. It incentivised travellers to share their own trip videos and comment on other people’s content here, rather than on third-party social networks. An entire channel of user-generated travel videos and photography was created to keep users engaged for longer with the app, and generate vast proprietary data flows. This self-contained eco-system is being harvested to enable a suite of AI trip-planning tools to recommend travel services and experiences that are data-tailored.

 “80% of our customers use their mobile phone to plan and book travel. They are hyper-digitized and want self-service. So, they use our intuitive mobile apps across the entire travel journey,” says Yi Ru, Assistant Vice President, APAC Markets, for Trip.com. “AI is already playing a transformative role for them from booking travel to beyond.”

Asia Media Centre