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Artificial Intelligence (AI) in the Travel Industry

If you make your living as a corporate slave, you’re probably familiar with business travel. This is where companies like Amex fleece people provide a valuable service by selling corporate flights and hotels at the highest rates possible. It seems like at no point in the transaction do they ever consider trying to save companies money but instead, try to sell the most expensive tickets and accommodations they can find. Generally, that has been our experience dealing with corporate travel agencies (or any travel agent for that matter).

We took a stab at artificial intelligence in travel because we believe the use of AI in the travel industry should be more than just suggesting destinations but also, cutting down the cost to travel by hopefully getting rid of the middleman middle-person entirely.

Travel is one industry where you can achieve a competitive advantage through data-driven marketing. Big data in the hands of travel industry players should drive the improvement of customer experience. Even the customers buy into this with 83% of millennials willing to let travel brands track their habits in exchange for a better, more individual experience. Those darn millennials (rolls eyes).

According to Forrester research, even a 10% improvement in customer experience can mean an additional $600 million revenue for an airline. This is all null and void though if you convert customer experience into an extreme sport and drag your paying customers out of a plane in the case of United Airlines (NYSE:UAL). (Even if passengers get belligerent, you must be nice to them or you will incur the wrath of millions of armchair airline CEOs on Twitter.

According to Smart Insights, total retail travel sales alone across the globe in 2016 were valued at $22.049 trillion, up 6.0% from 2015, and the online travel industry alone is expected to grow to $762 billion by 2019. Can you believe those numbers? Here are some startups successfully integrating AI into their value proposition in order to improve the customer experience in the travel industry.

Click for company websiteFounded in 2009, Tradeshift, a company based in San Francisco, California, has racked up $182 million in funding so far from investors that include HSBC, American Express and Paypal. The founders saw previous success in building a trade platform called EasyTrade that 95% of Danish businesses still use today. Tradeshift has built an Alexa-like tool called Tradeshift Go that is used to book and pay for corporate travel. In 2016, they acquired a company called Hyper Travel which is the AI component of Tradeshift Go and deals with routing the booking request to travel agents along with the conversational elements of the tool. Here’s how a Tradeshift dashboard is going to look like for a business:

Tradeshift Go Dashboard

The service is aimed at corporate travelers by assisting in the search for flights, car rentals, planning group travel, etc. while taking into account travel preferences, corporate credit limits, budget allocation for travel, and pre-approved credit purchases. 

Tradeshift recently announced that they are adding a new layer of artificial intelligence they call Ada, integrating with Tradeshift Go, Tradeshift Analytics, Tradeshift Buy, and externally to Slack. This will come in handy once Tradeshift completes the acquisition of IBX Business Network from the Scandinavian company Capgemini this month. The acquisition will mean 1.5 million businesses (including 500 global enterprise customers) will be connected to Tradeshift’s existing B2B platform translating to an increase transacted value of more than half a trillion dollars in the next 12 months alone.

Click for company websiteFounded in 2011, Irish startup Boxever has taken in $19 million from 4 rounds of funding. Typically a company interacts with its customers via email, advertising, company webpage, mobile phones, operations, call center, and social media. Each point of interaction generates its own unstructured and disconnected big data. This is the reason why 74% of marketing leaders have no meaningful insights into their customers’ behavior. Although primarily aimed at engaging customers of enterprises in the travel industry, Boxever’s technology can also serve customers in the airline, financial, and retail industry.

Boxever can cut down traffic at the check-in counters by 30% and has generated at least $1 million for the past eight months for VivaAerobus. Cebu Pacific Air claims to have realized a 100% ROI within a week upon using Boxever urgency messaging. If you have 3 minutes, here’s a video showing how Boxever did it in these companies.

The technology is currently being used by airlines like Emirates, Brussels Airlines, and Air New Zealand among others in order to enrich customer engagement. 

Travel Chatbots

We already wrote about the myth of “clever AI chatbots” but we’ll need to keep paying attention to this, skeptical as we are. Marketers are expected to spend around $250 million on this technology in 2017. Here are some startups worth mentioning not only because they are interesting but because customers are actually paying for them.

Click for company websiteFounded in 2015, 30SecondsToFly is a startup based in New York that has taken in 2 rounds of undisclosed funding so far. This startup is targeting the travel market for small and medium-sized businesses (SMBs) which is estimated to be around $36 billion in the U.S. by offering its travel management solution called Claire. SMBs usually have no clear travel patterns and don’t have to worry about policy compliance that plagues larger corporates. With Claire, SMB travelers can find the most reliable flights, maximize their miles, comply with travel policies, and at the same time take advantage of travel bonuses and negotiated fares. Claire can understand written text and its user interface can book, reschedule, and cancel trips via SMS, Facebook, Whatsapp, and Slack. Here are some pretty screenshots:

An overview of Claire’s different User Interface

Claire’s revenue stream comes from subscription plans offered to corporate customers plus commissions on travel products such as airfares, hotel bookings and car rentals. These arrangements are later fed into the customer’s existing expense management system.

Click for company websiteFounded in 2015, this startup based in San Francisco, California, has taken up $11.8 million in 2 rounds of funding. Mezi’s free IOS app is like your personal assistant who takes care of your travel and shopping when you ask via your mobile SMS. You simply text Mezi where you want to go and you get to enjoy end-to-end assistance during your travel from booking flights, hotel accommodations, top restaurant reservations, and even cancellations in real-time.

A snapshot of a typical Mezi text conversation

Hey mezi, how about a hotel that doesn’t cost the equivalent of an average car payment for every night we stay? The startup is backed up by a network of price-hunting experts supported by algorithms, AI, and payment processing via Stripe (which uses machine learning for fraud detection now). Mezi factors in a “tip” on top of purchases you make through its search. 

Click for company websiteFounded in 2015, Colorado startup Pana has taken in $1.45 million from 2 rounds of funding. Attempting to take over where the travel agent left off, Pana uses what it calls “a combination of live travel experts and the company’s artificial intelligence (AI) technology” to enable users to call up information on accommodations, transportation, and dining. Pana’s Standard Plan, at $25 per month, provides customers access to restaurant suggestions, airfare, hotels, and car rental bookings. The plan has a proactive contingency plans in the event of delays or emergencies. The Lux Plan goes for a steep $250 per month, includes all the services from the standard plan, plus access to black car rental services, upgrades, travel lounges, and VIP privileges (subject to availability).

For businesses where recruitment is a strategic component, Pana offers a plan which frees up the recruitment team from arranging in and out trips for candidates for just $79 per candidate (or a subscription with up to 50% discount). Here’s a snapshot of an interaction with the travel app for recruitment:

Inviting a Job Candidate to Travel for Interview via Pana

Pana is planning to offer a Free Plan for occasional pleasure travelers. (Does anyone else think that this thing sounds like a waste of good AI algorithms? When you have recruiters who think Taleo is the next best thing to sliced bread, you know you can sell them just about anything and you don’t need to use AI to do it.)

Update 05/01/19: Pana has raised $10 million in Series A funding to help companies arrange travel for onsite interviews. This brings the company’s total funding to $11.5 million to date.

Click for company websiteLola Travel was founded by Paul English who is a co-founder of Kayak. Although a lot of information online links Lola Travel to AI (and most make a point to emphasize that), Lola’s website does not say much about what’s driving its technology. We find this startup worth mentioning because its business model is similar to the startups we just covered here plus 2 rounds of funding amounting to $44.7 million is a bit hard to ignore with investors on board who also funded Kayak which went public in July 2012 and was later acquired. Here’s a screenshot of the app:

Lola Travel acquired Room 77 in November 2016, a startup (similar to Kayak) which took in $43.8 million of funding so isht appears to be going down.

Update 03/26/19: Lola has raised $37 million in Series C funding to continue building out its technology and hire more talent as it takes on incumbents like SAP. This brings total funding to $81.7 million to date.   

While nearly 50% of consumers surveyed are still unexcited about chatbots (we’re in that group), 79% of marketing executives believe the exact opposite. Mobile search queries performed using chatbot technology are expected to grow from 20 percent to more than 50 percent by the end of this year. 

MBAs out there. Build a chatbot that finds us a hotel in our chosen destination and never exceeds $100 a night. Ever. And it also finds the cheapest fare possible. Always. If you can build that chatbot, and make it sound like Gordon Ramsey instead of Martha Stewart, we’re in.

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  • Nanalyze

    Thank you for that Rachel.

    The app looks up events in your area and tells you about them? It looks like that’s the gist of it. Where does AI come in here?

    Or to ask the question a bit differently, what is being accomplished with AI that couldn’t be accomplished using traditional programming?

    It’s really a question that needs to be asked to every single company using AI. As we always say, the evidence is usually in the results.

    Thank you for the heads up!

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