34% of North American travelers have used Generative AI for planning in 2023

NYC-based management consultants OliverWyman have released results of an August 2023 survey in which they asked nearly 1,100 leisure travelers in the US and Canada about their experience with using generative AI (Gen AI) for travel planning.

Note that the survey was taken only a few months after the initial public release of Gen AI tools.

Key findings:

• 34% said they had recently used Gen AI for travel inspiration, planning or booking.
• 51% who used Gen AI booked all or most of the recommendations it gave them.
• 44% said they trusted Gen AI throughout the booking process.
• 84% said they were satisfied (45%) or very satisfied (39%) with the quality of recommendations they got from Gen AI. 14% were neither satisfied nor dissatisfied, and only 2% were dissatisfied or very dissatisfied.
• 55% said they would select a booking channel because it has Gen AI capabilities.

Ratings of importance of Gen AI capabiities (Top 5):

1. Comparative pricing, cited by 76%
2. Ability to book all trip elements in one place (50%)
3. Ability to integrate with loyalty programs (41%)
4. Ability to search for pricing and/or pay in cash or loyalty currency (40%)
5. Ability to book vacation packages (32%)

Customer segments:

Attitudes about Gen AI varied according to loyalty program use, with "Mid-upper tier elite travel loyalty members" being most positive about Gen AI, vs. loyalty program non-members::

• Recently used Gen AI: 48% vs. 20%
• Trust Gen AI and would follow its travel recommendations: 54% vs. 31%
• Would select a booking channel because it has Gen AI capabilities: 63% vs. 44%

OliverWyman recommendations for travel suppliers:

• Develop you own Gen AI capabilities.
• Leverage loyalty member data and unique local; market knowledge to develop Gen AI tools offering superior personalization.

Cruise travel:

• 56% of 2022-2023 cruise travelers used Gen AI tools vs. 34% of all travelers
• 60% of travelers who had taken 2 or more cruises 2022-2023 used Gen AI tools vs. 53% who had taken only one cruise.

Activities and experiences:

38% said they would use Gen AI tools to book non-core elements of their trips (car rentals, etc.)

Vacation packages:

32% said they had booked their trips as vacation packages (flight plus hotel minimum) but 42% would buy packages having personalized Gen AI itineraries.

Ratings of importance of Gen AI vacation package features (Top 5):

• Comparative pricing between packages, cited by 60%
• Comparative pricing vs. non-Gen AI packages (49%)
• Personalization of itineraries (42%)
• Ability to book directly through the tool (40%)
• Wide variety of supplier options for each trip element (33%)

OliverWyman predictions:

• Significant shift of booking share from suppliers to OTAs could occur, unless suppliers develop their own Gen AI tools.
• OTAs could increase booking share by 15% by 2028, resulting in $1.4B loss to hotels.

Comment: Hotels are living in interesting times right now because of new threats posed by (1) OTA use of Gen AI and (2) OTA loyalty programs, which you can read about over at our TourismMarketer site.

How will hotels respond? Watch this space.

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