Highlights from The Phocuswright Conference – Day 2, Afternoon

40% considering using AI to book travel, says new Phocuswright study
But frustration with increasing intrusiveness of mobile tech is high

 

In a session titled “Travelers vs. Technology – Who’s Winning?”, Alicia Schmid, Director of Research at Phocuswright, presented key findings from the research authority’s latest study, examining the evolving relationship between travelers and technology.   The report revealed that 40% of travelers are considering using Gen AI to book travel in the near future, as well as revealing insights into tech adoption trends and frustrations with existing tools.

 

Schmid segmented travelers into three categories: early adopters, mainstream adopters, and late adopters, each with varying levels of tech engagement.  Schmid noted that “early adopters are most likely to be less than 55 years old, tend to spend more on travel and take more trips than average.”  Mainstream adopters, representing 50% of travelers, “don’t exhibit any age skews, but they do take slightly more trips than average and spend a little more.”  Late adopters, who are “most likely to be 55 and over,” “spend less and take fewer trips on average.”

 

Key findings from the report:

• Future booking intentions – 40% of travelers expressed interest in booking travel with generative AI in the future
• Tech adoption varies – Travelers exhibit different levels of tech engagement, with early adopters, mainstream adopters, and late adopters.
• Mobile app usage is high – 84% of travelers use mobile apps while in their destination
• Mobile app frustration – Travelers express concerns about excessive notifications and intrusive data collection
• Generative AI awareness is high – 85% of travelers are aware of generative AI.
• Personalization vs. privacy – The potential for true personalization exists, but travelers are hesitant to share information due to privacy concerns

 

Mobile phones have become essential travel tools, with apps dominating in-destination usage.  Schmid highlighted that “84% of travelers use mobile apps while in destination.” However, she also emphasized the need for travel providers to address common frustrations, such as excessive notifications and intrusive data collection.  “Two-thirds express some type of frustration using mobile apps,” she noted.

 

The presentation highlighted the rapid rise of generative AI awareness, with 85% of travelers having heard of it.  Despite concerns about safety and accuracy, usage for travel planning has surged.   “It’s astonishing the level of awareness that generative AI has reached in such a short amount of time,” Schmid remarked.

 

Schmid emphasized the potential of generative AI to deliver true personalization, but acknowledged the need to balance this with privacy concerns.  Looking ahead, the report indicated that demands on travel technology will intensify, driven by the expectations of younger, tech-savvy travelers. 

 

Schmid ended the session by urging travel companies to prioritize user experience, address frustrations with mobile apps, and respect privacy concerns related to generative AI.  As the travel industry navigates the evolving landscape of technology, finding the right balance between personalization and privacy will be crucial for continued growth and adoption.

 

Loyalty is about inclusivity, not just frequent flyers, say loyalty leaders

 

A panel of loyalty experts at Phocuswright explored the evolving landscape of customer loyalty in the travel industry, emphasizing the need to move beyond traditional points-based programs and forge deeper, more emotional connections with travelers.

 

The panel, featuring Oral Muir, VP, Partnerships, Experiences, & Distribution at Hilton, Nadia Omer, CEO of AirAsia MOVE, and Jenn Scheurich, Managing Vice President, Capital One Travel & Retail Experience at Capital One, discussed diverse approaches to loyalty, highlighting the importance of inclusivity, personalized experiences, and understanding customer needs.  The panel was moderated by Lorraine Sileo, Founder of Phocuswright Research and Senior Analyst at Phocuswright Inc.

 

“Loyalty has to sink back into the brand promise,” Omer stated, emphasizing the need to cater to a wider range of customers, not just frequent flyers. Muir stressed the importance of building emotional connections and creating memorable experiences, noting that “the transactional focus can…take you off mission.” Scheurich highlighted Capital One’s focus on providing value and flexibility in redemption options, recognizing that “customers’ lives are so much bigger than travel.”

 

The panelists debated the relative importance of points, status, discounts, and perks in driving loyalty.   While acknowledging the appeal of perks and status for some travelers, they emphasized the need to cater to diverse needs and preferences. Muir highlighted the value of personalized service and recognition, stating that “that recognition in that moment is worth more than 100,000 points.”

 

The discussion also touched on the role of partnerships in enhancing loyalty programs.  Muir discussed Hilton’s collaborations with brands like Autocamp and Small Luxury Hotels to offer unique experiences.  Omer highlighted Move’s partnerships with SMEs and financial institutions to expand its loyalty ecosystem and provide value to a broader customer base.  Scheurich emphasized the importance of values alignment in partnerships, citing Capital One’s collaboration with Hopper and Chef José Andrés as successful examples.

 

Travel is the ultimate moonshot for AI, says Google search exec

 

Julie Farago, VP of Engineering for Travel and Local Search at Google, unveiled the company’s vision for AI-powered travel planning in a session titled “Google Travel in the Era of AI.” Farago showcased how Google is leveraging advancements in artificial intelligence to transform search from a keyword-based activity to a more conversational and personalized experience.

 

Farago highlighted the evolution of search inputs, from traditional text-based queries to voice and visual search methods, allowing users to express complex needs and explore travel options in more intuitive ways. “More than 15% of queries each day we’ve never seen before,” she noted, emphasizing the vast and evolving nature of user needs.

 

She demonstrated how Google’s AI-powered tools are enhancing trip planning, showcasing a sample itinerary builder that generates personalized recommendations for destinations, activities, and dining options, complete with factual data and links to relevant sources. “We are evolving in how people can ask questions,” Farago explained, “and…in the way that we provide results.”

 

Farago emphasized the importance of user trust and Google’s commitment to “bold and responsible innovation.” She outlined measures taken to ensure accuracy and transparency in AI-generated results, including labeling generated content, verifying factual information, and linking to trustworthy sources.

 

She offered practical recommendations for travel companies seeking to stay relevant in the evolving search landscape, including:

• Meaningful connections – Focus on human voices and authentic content to connect with users.
• Embrace experimentation – Test and learn with new user interfaces and customer service approaches.
• Internal innovation – Leverage AI to rethink workflows, enhance productivity, and improve customer outreach.

 

Farago expressed her excitement for the future of AI-powered travel planning, stating, “We are extraordinarily lucky to be in travel at this moment of AI innovation.”