Global Chats: Emerging Technologies in Travel and Hospitality
As we navigate one of the most rapid periods of technological advancement and adoption in recent memory, it’s undeniable that technology is reshaping the contours of marketing campaigns and revolutionizing how consumers plan their travels and vacations. We have gathered MMGY Global experts to delve into the profound impact of technology on our industry, providing valuable insights and illuminating the horizon for the next wave of transformative technologies we should be prepared for.
Joining me today is MMGY Travel Intelligence EVP and Managing Director Chris Davidson, MMGY SVP of Marketing Technology Robert Patterson and MMGY NextFactorSVP of Innovation Greg Oates.
Thanks for joining me for this discussion on emerging technology in travel and hospitality.
Technology is having an undeniable impact on our everyday lives – from how we shop to how we interact with friends and family. The way we market and plan for travel is no exception. What are some of the most important technological innovations you see impacting the way we connect with consumers?
Well, there’s no doubt that we’re in the very early stages of uncovering how generative AI is going to impact travel planning and the ways in which we generally engage consumers. From content development to itinerary design to personalized tour guides on the fly, AI is going to have a massive impact on the travel experience. I also think augmented reality is going to have a significant impact on the in-destination experience within the next few years.
Generative AI is going to have the biggest impact on how the travel industry and travelers use technology to optimize strategies and plan travel since the rise of social media.
As Chris and Greg mentioned, AI is driving a tremendous amount of buzz at the moment, but there are other technologies such as 5G and the Internet of Things (IoT) that I believe will grow to have a greater impact on how we interact with the world around us.
Chris, MMGY Travel Intelligence recently published a study called Emerging Technologies in Travel & Tourism™. The study highlights that nearly 2 in 3 travelers relied on emerging technologies for their travel experiences in the past year. What do you believe are the main driving factors behind this adoption rate? What are some concerns travelers have expressed when adopting new technologies?
There are several concerns that travelers have. First, they question whether or not the information they get will be trustworthy. If they use ChatGPT to plan their trip itinerary, for example, what happens if they book a tour of a museum on a day when it’s actually closed? Second, there’s a concern that technology will just make things more complicated. People don’t have time these days for “complicated.” And third, data privacy is a huge concern.
I imagine some people actually like to plan vacations, too. Did any of the results from the study talk about the intrinsic satisfaction people get from finding the best off-the-beaten-path beach or the hottest new restaurant that might not be in the training data?
Yes, I found this finding fascinating. There is a certain joy people have in planning their travel experiences and respondents expressed a concern that technology – particularly gen AI – could rob them of some of this joy. They felt the recommendations may look similar for everyone, or that travelers would all end up with the same Instagram photos. It will be important for the industry to ensure this technology can truly personalize and enhance both the planning experience and the experience of travel itself.
We’re hearing a lot about all three of those issues that Chris brought up.
Greg, can you elaborate? What are people saying? Is there a way to tailor gen AI to meet those traveler needs?
Regarding No. 1 about veracity, a lot of that is focused on ChatGPT, which isn’t connected fully to the web other than via some plug-ins that only work so well. Bard, Bing and Perplexity are connected to the web, which helps improve trustworthiness with verifiable links. These three other platforms are not super well known as of yet.
Re: No. 2, that live connection to the web helps ensure the museum is open to tour that day. But in general, I find a lot of these AI tools to be more immediate and personalized than traditional search … Also, there’s an expectation that this is still early days and under development … James Jackson, CEO of Tourism Jasper said the other day that gen AI is usefully imperfect.
And No. 3, DMO CEOs, as well as consumers, are of course preoccupied with data security, but there’s still a lack of basic understanding about how these platforms work. First, I think we need more high-level education about gen AI in general for DMO teams to nail down data security effectively. There are a lot of irrational fears and many DMOs are defaulting to extreme no-use cases, which is understandable for now. Experience Scottsdale recently shared their internal AI-use policy on DI’s tech community forum. Cool to see us learning collectively as an industry.
Robert, there’s a notable difference in perception between travelers and DMOs, especially regarding generative AI. How do you see the role of generative AI in shaping the future of travel marketing, and why do you think travelers aren’t as enthusiastic about it as DMOs?
There is no doubt that AI is going to be transformative for both travelers and travel brands. I think marketers were quick to see the positive impact AI is going to have on efficiency, content production and personalization. Consumers are looking for solutions that aid them in solving their problems, and AI will be another tool at their disposal. While ChatGPT has had the fastest adoption of modern technologies, there are still many who have yet to try and utilize this technology for their own personal travel planning. As users become more familiar with the technology, I believe it will become an important part of their travel planning process.
To build on what Robert said, I think it’s because consumers don’t necessarily know what reality will look like when these technologies are introduced. Imagine when a skier, for example, can use smart goggles and augmented reality to easily guide them to trails, lifts and on-mountain restaurants based only on voice cues. Or, when a tourist can use AI and augmented reality together to immediately create a personalized, on-demand tour based on their unique interests and available time. It will have to be experienced to be appreciated. It will take the convergence of good hardware, excellent connection speeds and compelling content. No different than when the iPhone was launched in 2007.
We as an industry do a less than stellar job seeing and understanding the end-user experience.
Seems like we’re often producing content for Google versus the consumer.
Greg, on that note, the difference in perspective between travelers and DMOs on which technologies will most benefit the travel experience is fascinating. How can the industry bridge this gap and ensure both sides see eye to eye in the future?
Well firstly, AI is evolving so fast and there has been a high rate of adoption, so I think DMOs and visitors will come together a lot more on the benefits, use cases, etc., in the short term. Also, DMOs are more optimistic about the potential of VR/AR than consumers, and I’m not sure why. AR may be a technology that both DMOs and travelers can see eye to eye on, down the line.
I think these differences are somewhat inevitable at this point. Until the concept becomes the next big Christmas gift idea, I’m not sure travelers know what these tech innovations will do for them.
Data privacy concerns are prevalent amongst consumers, with 3 out of every 4 travelers expressing concerns. From a marketing technology perspective, how can DMOs ensure they’re not only compliant with regulations but also genuinely reassuring travelers about their data’s safety?
DMOs need to understand their strengths and their weaknesses. Data collection, processing and management is not a core skill set of most DMOs. Therefore, we need to lean into consulting experts in this area including privacy attorneys and established data governance platforms. The land beneath today’s marketer is constantly shifting, as are data regulations. Marketers need to focus on marketing and using data in a consensual and ethical manner. That starts with communicating to consumers what data is being collected, how it is being used and what that value proposition of sharing their data is.
The key is to be transparent and responsible with the data. Treat it as if it were your own.
Ah, the golden rule!
Would like to see the age breakdown of “3 out of every 4 travelers expressing concerns” re: data privacy.
It goes up to 4 out of 5 when you get above age 55.
What about younger travelers?
Generally, they’re less concerned than older travelers – but that makes sense. Younger travelers have grown up with this technology and they’re much more comfortable sharing their personal data as long as they feel like there’s something in it for them.
What I find interesting is that consumers claim to be concerned about data breaches, but consumers rarely punish a company when a data breach occurs. I can think of one telecommunications company that has had several breaches, but their user base continues to grow. Consumers seem to be treating these breaches like a cost of doing business. So I wonder if the severity of the concern is not overstated.
I believe it’s a concern, but probably something that is ultimately outweighed by the perceived value of whatever utility the technology offers.
Given the feedback from this study, what would be the top three recommendations you would make to travel industry executives looking to introduce new technologies successfully?
Focus on the personalization aspect – how can technology truly personalize the travel experience at scale?
And, simplify, simplify, simplify.
1. Find an advocate within your organization to champion the technology and its use cases.
2. Make incremental investments until it is proven.
3. Test, test and then test some more.
Lastly, focus on the technology investment that will be most transformative and impactful for your business.
Robert, are you offering up MMGY to be that technology partner?
You know I am.
1. Aggressively educate the industry on AI and how it’s about way more than just ChatGPT.
2. Emphasize the value of AI as much more than search, fact finding, itinerary building and writing press releases. This is more for suppliers. The real value of these tools is in strategic planning, brainstorming, data insights, generating new solutions to seemingly intractable challenges, etc. They thrive in direct correlation to how much you ask of them. For example, we use new AI platforms to develop strategies to address workforce housing, labor shortages and community/industry dysfunction. These are big challenges that we deal with daily with clients. AI is providing new direction in these areas.
3. Emphasize the value of AI re: mass personalization and the payments industry. That’s where all of this is heading.
Looking ahead, how do you anticipate the landscape changing for emerging technologies? Is there anything within the study or outside the study that you foresee having a significant impact on the travel and tourism industry in the next decade?
I can envision AI fundamentally transforming the theme park experience. Just imagine what a 4D immersive, personalized ride experience might look like in 10 years. It will make today’s theme park experience feel like a community carnival from the ‘70s.
I also expect significant advances in eco-friendly mass transit that reduces congestion in major destinations. Whether it’s elevated pod taxis, autonomous vehicles on dedicated tracks or something similar, I expect technology to substantially improve how people move around the places they visit.
I am most excited about spatial computing and AR. I think these technologies are going to help us lift our heads up out of our phones and put our environments and life experiences at the forefront again. The most amazing technologies and advancements are the ones that just work in the background and you don’t think about them like electricity, the Internet and 5G.
I’m excited about blockchain/Web3 in the future. Other sectors have invested heavily in decentralized web tech for years to drive loyalty and customer lifetime value. The travel industry will get there eventually.
This has been a lot of fun and very insightful. Thank you all so much for your time today and for sharing your thoughts on emerging technologies.