There's no question that agentic artificial intelligence (AI) and autonomous agents will impact the travel sector. But for suppliers and intermediaries, how this new technology will affect distribution infrastructure is top of mind.
In the latest installment of Phocuswright’s The New Age(nts) Trend Series, industry leaders sat down to discuss the travel sector’s preparedness in the face of the generative AI revolution.
The conversation was facilitated by Mike Coletta, senior manager of research and innovation at Phocuswright. Panelists included Norm Rose, senior technology and corporate market analyst at Phocuswright, Julie White, Accor's chief commercial officer of Europe and North Africa for its premium, midscale and economy brands, Kayak's chief product officer Matthias Keller and Tom Underwood, co-founder and chief operating officer of Bonafide.
Panelists agreed changes are likely and preparation is necessary when asked how they believe agentic AI may disrupt distribution.
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According to White, while “early adopters” may want to capitalize on autonomous agents, it will still be necessary to cater to those who prefer the more traditional route. For those who actively pursue AI, building trust with users will be critical.
"[For] those who experience booking through these tools and through this type of AI, how much do they end up rendering and trusting the information that it generates to them? Do they trust the information as unbiased? Do they trust it's in their best interest, and do they trust that they're really, truly getting the value for money that they're looking for in their choices?" White said.
"That's where these new tools have to establish that trust first, and then we'll see where it goes from there."
Accor's chief commercial, digital and tech officer Alix Boulnois also touched on AI in a recent interview with PhocusWire, calling it "an accelerator" of what the company is already doing with personalization and tailoring offers and messaging for consumers.
For his part, Underwood said agentic AI is poised to cause “dramatic disruption”—even if it isn’t immediate—due to migration from traditional dated searches to searching for different combinations of attributes.
“What I do think you’ll see agentic AI do is find the best value for the customer,” Underwood said. “So, greater utility may not be a rush to the lowest price. It may be finding something that truly is what the customer would want if they could shop across more than just property by property.”
Personalization and marketing
Personalization will play a significant role in helping consumers make the travel decisions that best suit their needs, Keller said. It may also help shift the focus from pricing, particularly when booking hotels.
"I think for everyone, there's going to be the opportunity to really personalize. When you go to a site like ours or [Booking.com] and you make that search, and maybe you haven't used that product for the last 10 years, there's not a lot of personalization happening. It's a little bit of a shot in the dark [with] what you may like," he said.
"But now, if you think about the chat interfaces or even the agent that knows everything about you, I think personalization will really help to no longer just be by price, but really it's just going to be personalization on steroids ... you still may want to have a good deal, but you're probably willing to spend more because we just now suddenly understand that [a certain attribute] really matters to you."
Marketing to AI, as opposed to just humans, is another piece of the puzzle.
“Now, you have to position your marketing not only to the human eyeballs that are looking at your social media platforms but also to the AI that is rendering that information back and helping to match the desires of the individual with the representation of those brands,” White said.
How will larger tech companies get involved?
Travel intermediaries and suppliers will have to adjust as new agents are introduced by larger tech firms like Microsoft and OpenAI. But according to Keller, the dynamic is a bit like shopping at a department store versus a mom-and-pop shop.
I can only speculate as much as everyone else, but certainly what we have seen is that AI Mode is right up the alley when it comes to agents and also travel capabilities.
Matthias Keller, Kayak
"There is certainly going to be the value of brand, right? Hopefully, [you] want to use Kayak because you really like Kayak, and you have all your trips there and you have many reasons to come to us,” Keller said.
“But at the same time, building travel distribution is a large undertaking,” he said, noting that while larger companies may have the resources to do so, it goes beyond running something like OpenAI's "Operator."
“We have to see how deep they all want to go in the tech stack and whether they want to hand the process over to someone else,” Keller said, pointing to the recent launch of Kayak.ai as an example of how Kayak is staying competitive in the space.
With Google—especially considering recent announcements at its I/O developer conference last week—again, it will depend on how much of the delivery it wants to do itself and much it is offload to others.
“It’s a very complicated organization. I can only speculate as much as everyone else, but certainly what we have seen is that AI Mode is right up the alley when it comes to agents and also travel capabilities,” Keller said.
It’s unlikely that Google will become a merchant or an online travel agent, i.e. providing duty of care or service, as they’ve avoided doing so thus far, according to Underwood.
White agreed.
“As a supplier, we respect the relationship of the booking agent. That’s not an area we interfere [with], and when it comes to the financial flows of working with the guests and with the customer and if they have a disruption and need a change—that, currently, in the way we work today, goes through the booking agent. I don’t see Google wanting to take on that merchant of record role,” she said.
How will tech need to be updated?
Industry leaders said content will be pivotal when it comes to preparing on a technical level.
Underwood used the example of current hotel websites, which are “designed for humans,” letting them know it has an amenity like a pool. But with large language models (LLMs), it will be “much more granular” and need to focus on attributes and customer experiences.
“To prepare for that, you need thousands of pieces of information—not just a few—but you need to do so in a way that does not disrupt the consumer experience,” Underwood said.
“Getting the information where it can be seen by the LLMs without disrupting the human experience is where I think things are going.”
However, according to White, keeping content up to date is a pain point, especially with franchisees.
There's so much potential and so much opportunity here. It just comes down to really making sure that the experience the customer has is trustworthy.
Julie White, Accor
LLMs may actually be able to step in and assist here by having franchisees validate information compiled by LLMs instead of compiling it themselves, Underwood said.
Panelists also said that the look-to-book ratio is likely to be affected by generative AI, especially as compute becomes less expensive and allows for more caching.
Reviews will add yet another component, as LLMs often use these as sources.
When it comes to validating those reviews, digital ID offers a solution, helping to verify travelers, businesses and who’s “real,” Coletta said.
Looking ahead
Panelists were optimistic about smarter and more personalized approaches with generative AI when asked how travel distribution might look in the next five to 10 years.
“Those who want to have quiet rooms will know what’s meant by ‘quiet,’ and they’ll actually know that decibel level—if they care for that much detail,” Underwood said.
“So, the nuances that will be available through LLMs providing the information—it’s going to be amazing, and because of that, the ecosystem is going to make more money, meaning the hotels themselves are going to do better because customers will be able to match what they’re looking for more precisely.”
Keller reiterated that things are likely to get more agentic and personalized, with less time spent “on the chore of running hundreds of searches to figure out our travel plans.”
“There's so much potential and so much opportunity here. It just comes down to really making sure that that the experience the customer has is trustworthy and that [in] these early days, we make sure that we partner with the right connectors in providing the information to the travelers in a way that they trust us and they will come back again and again and again,” White said.
Phocuswright's New Age(nts) Trend Series
Join Phocuswright for a deep dive on how AI and agents are affects the travel industry in the areas of operations, in-destination experience, distribution and marketing, as well as the connection between agents and digital ID. Watch past sessions on demand and sign up for future ones.