Not all players in the travel industry are pleased about the coming of artificial intelligence.
Airbnb has repeatedly noted how AI could fundamentally change the company's operations.
Travel industry website skift.com has published a report on why the 'travel giants' – Airbnb, Choice Hotels, Expedia, Hyatt Hotels, Hilton Hotels, Uber, TripAdvisor, Booking Holdings (which owns Booking.com, Agoda, Priceline, and Kayak along with its 11 travel companies) – have misgivings about the advent of AI, evident in their latest earnings calls.
Skift.com says that these recently published company reports reveal why the travel behemoths are wary of AI.
Meanwhile, events have nudged these travel companies to explore how they can use AI to improve operations, processes, and products.
New competitors
The AI wave has released new start-up competitors to the giants, like trip planners and back-office software task solutions. The nature of start-ups is to be fast and agile.
Booking Holdings has said it is aware of the competitive pressure this situation exerts on it to innovate and keep pace in areas that are currently outside its expertise, and it's possible it will not be able to respond quickly enough.
Hyatt said it was wary that competitors or others might incorporate AI into their offerings more quickly or more successfully than Hyatt could. It said this could impair its ability to compete effectively and adversely affect its results. "Our competition may have access to greater financial and technological resources, giving them a competitive advantage in recruiting, motivating, and retaining sought-after AI professionals."
In 2023, Tripadvisor launched an AI-powered travel itinerary generator which creates personalised travel itineraries using OpenAI's generative artificial intelligence technology. "There is no guarantee that our itinerary generator or other artificial intelligence-focused initiatives will be competitive or attract more consumers to our platform."
Regulatory uncertainty
The Skift.com report notes there needs to be more current regulation around AI. Governments in the US and the EU want stricter regulations governing what AI companies are allowed to do. Both the US and the EU have plans for regulation, but so far, the laws of both institutions have been unable to keep pace.
Airbnb feels that new laws, guidance, and decisions in this area may limit its ability to use machine learning and AI or require changes to its platform or operations that may decrease its operational efficiency. This could lead to an increase in costs and hinder its ability to improve its services. At the same time, it said, intellectual property ownership and license rights, including copyright, around AI had not yet been fully addressed by courts or laws or regulations, and it observed that its own use of AI could expose it to claims of intellectual property "misappropriation".
Uber also feared exposure to lawsuits and brand damage through AI. "AI use or management by us or others…could impair the acceptance of AI solutions or subject us to lawsuits, regulatory investigations or other harm, such as negative impacts to the value of our intellectual property or our brand."
Limitations
There have been countless examples of generative AI producing inaccurate answers, and travel companies are cautious of AI producing incorrect results and resulting flak – with good reason.
Air Canada recently had a legal claim filed against it by a passenger (who won the case) who had been misinformed by a chatbot. No doubt this sits heavily on the minds of the giants.
Uber and TripAdvisor are both circumspect about the damage that can be caused by flawed or insufficient datasets. Even worse, AI, based on data containing biased information, can create inaccurate or discriminatory outcomes. This could subject travel companies to legal liability, regulatory action, and brand harm.
Cybersecurity
AI can be turned against the user. Expedia believed the rapid adoption of AI could increase the risk of fraud among bookers and suppliers, resulting in brand damage.
Choice Hotels said cybercriminals have advanced capabilities, such as using zero-day vulnerabilities (undiscovered security gaps in tech applications) and rapid integration of new technology, such as generative AI.
Hilton said AI would accelerate hackers' unauthorised access to information systems as criminals leverage generative AI.
Costs
The cost to these travel companies of overhauling their operations to incorporate AI would be high, especially if such a venture didn't pay off.
Uber said that it would have to allocate additional resources to implement AI ethically, and it could also necessitate costly investments in proprietary datasets, machine-learning models, and other systems.
Booking Holdings similarly foresaw additional investment around complex tech systems, which could impact its profits.
Hyatt, too, had concerns over costs: "There is also a risk that we may not have access to the technology and qualified AI personnel resources to adequately incorporate ongoing advancements into our AI initiatives, including access to the licensing of key intellectual property from third parties."
