Special Report: How to exploit AI

Special Report: How to exploit AI

Travel firms are starting to get a handle on how the tech can aid their business. Lee Hayhurst reports

Travel firms are starting to get a handle on how the tech can aid their business. Lee Hayhurst reports

Although growth in the impact of Artificial Intelligence (AI) is slowing the emerging technology is expected to be at the heart of innovation in travel for years to come.

According to figures released by research and advisory company Gartner, growth of AI-derived business value will rise by 62% in 2019, down from 70% last year.

Gartner’s Business Value of Artificial Intelligence, Worldwide, 2017-2025, report forecast an even more dramatic fall in 2020 to 39% with growth settling on around 7% from 2024.

AI is estimated to have delivered $2 trillion of business value globally in 2018, double that in 2017.

Ian Richardson, chief executive of technology consultancy TheICEWay, said this was a sign that the technology was maturing and genuine business applications were being developed.

“In terms of innovation AI is going to be key,” said Richardson, “even though the growth of AI spending globally is slowing down.

“That’s the pattern you usually see in most emerging technologies; people spend lots initially and as it starts to pick up spend slows down.

“The hype has gone and people are starting to realise what it’s capable of and fitting it in to their businesses.

“People are lowering their expectations of what it can do and working out what it can do for their business.”

Technology giants like IBM, Salesforce and Google have “democratised AI” with platforms like IBM’s Watson spawning niche suppliers who have developed specific applications.

Richardson said he sees three main areas in which AI will be applied by travel firms:

Decision Support – data networks powering recommendation engines
Decision Automation – making sense of ambiguous unstructured data, and
Bots and Virtual Agents – resolving routine queries and augmenting human agents

“The consumer, especially in travel is still the most important thing,” Richardson said. “But virtual agents are becoming more advanced and mature now.

“As long as you don’t believe they can do everything and you retain that human touch, a lot of simpler tasks can be done by virtual agents to reduce costs.”

Brennon Williams, chief executive of Iridium Systems and Robotics Corporation and an AI evangelist, said speaking as a consumer the slow pace of adoption of this tech is frustrating.

He said the technology exists to revolutionise customer experience in travel through cognitive AI – a development of algorithmic AI that is capable of holding a conversation.

But he said in the west this technology is dominated by multinationals, like Google, Microsoft, Amazon and Apple, whose commercial interests dictate speed of adoption.

And Williams warned firms in emerging markets like China and India, unhindered by the same commercial constraints, are innovating faster and could be the next big disruptors.

“There’s now a divide between how we in the west use tech compared to the speed it’s being adopted in the east, China notably, but also Japan and some Middle Eastern countries.

“There are not the same commercial constraints, so they move much faster. In the east they have such huge volumes of users and understand the money is in harvesting their data.

“Commercialisation of the technology is secondary to the long-term play which is having the data. You will start to see a lot more innovation in the east.

Williams added: “In the last two to three years in countries like India and china you have seen an acceleration in recognition of patent systems.

“Previously they did not do a lot of innovation, they focused in copying and doing it cheaper, but they are starting to understand how to deploy systems with a global model in mind.

“China is now leading the way in patents and countries are overtaking the US in innovation. There are some large companies in those regions starting to spread their wings.”

Williams cited Chinese ecommerce site and online retailer Alibaba and Japanese conglomerate Softbank, which has a 30% stake in Alibaba, as ones to watch.

He said the UK may tout itself as a leader in AI with many top minds coming out of its universities but it is “completely rubbish at commercialising any products”.

London-based Deep Mind was a classic example of an innovative UK firm that was acquired by Google, Williams said.

“Technology, resources, and skilled people are being snapped up and products and services will be owned by the big US companies who determine when the world gets to see this tech.

“As a consumer of services, in travel or anything else, it’s incredibly frustrating that I’m going through the same problems in the user journey I’ve been going through for years.

“The user experience in travel hasn’t been improved much at all, it’s pretty much the same process as it always was.”

Williams said a travel firm may be willing to invest “a couple of million quid” on data analytics to improve its algorithmic AI.

But none will invest enough and put at risk its entire revenue to change the user experience in travel entirely by embracing the promise of cognitive AI.

“Looking at it from the travel sector perspective, what that does create is an enormous opportunity for someone to come in and do it.

“That most likely will not come from one of the major players in the competitive landscape now. They will be happy to keep the status quo and protect their revenues.

“Airbnb surprised the hotel industry because it figured out a new relatively low cost way to work in that sector.

“The same thing, I think, will occur in the experience of searching, booking, and consuming travel and loyalty. That’s the biggest opportunity going forward.

“User experience drives loyalty, but no one’s prepared to make that bet on the next paradigm of customer experience.”

From the Travolution Innovation Report 2019