By Kevin Duckworth, founder and owner of the Travel Hub Consultancy
Change is the only constant and I can bear witness to that during my many years working in the travel industry across all sectors. Technology is the key driver of change but what is different now is the accelerated rate, pace and speed of change.
The resulting digital disruption has created many web and tech savvy pure play new entrants into the market with business models are based around speed and agility. They challenge the status quo keeping leaders and owners of legacy travel business models awake at night thinking how can they possibly keep up and not lose sales, margin or competitive advantage and differentiation.
Some of the more enlightened business leaders are proactively implementing dedicated competency and resources to fight back against these digital disruptors by investing in big data, analytics, cloud and mobile solutions.
They are adjusting their marketing strategies across digital platforms and recognising the importance of personalised content, consumer engagement, predictive analysis etc. However there is a new disruptor, one with such huge potential that it will challenge every aspect of our industry, it is Artificial Intelligence.
Artificial Intelligence (AI) is not futuristic it is happening here and now. The foundations, applications and solutions are already available.
There are already several well-known Intelligent Assistance applications which are using AI technology. They including Apple’s Siri, Amazon’s Echo Alexa, IBM’s Watson, Google Now and Microsoft Cortana who recently announced it has helped answer over 6 billion questions since its launch in 2015.
Each platform varies in its capabilities, some provide answers to basic questions and responses to regular web searches whilst others are more sophisticated and can help you organise you day to day activities such as meetings, reminders etc. Other solutions ‘learn’ your habits and interests thus building more bespoke responses.
AI combined with Machine Based Learning (MBL) technologies will bring about transformational change and has the capability of disrupting the disruptors. It will be the technology powering the Internet of Things bringing new digital challenges, opportunities and threats and has the potential to grow exponentially once it has passed through the early adoption phase.
Many of my fellow travel professionals know from history, in this industry things can happen very fast.
1998 Google launches
2000 Broadband launches in the UK, by 2009 50% of UK households are connected to Broadband, by 2016 that was 89%
2004 Facebook Launches
2007 Apple launches the iPhone
2008 Airbnb launches by 2013 it reports 6 million new guests
2009 Uber launches
2015 The Internet of Things. It is forecast by 2025 there will be over 100 billion connected devices
2016 In the UK 70% of adults accessed the internet ‘on the go’ using a mobile device or smartphone. In the 16-24 age range that penetration was 96%. Source ONS
So what is Artificial intelligence and Machine Based Learning?
AI is defined by the Oxford Dictionary as the theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.
According to the late Arthur Samuel, a pioneer in machine based learning (MSB) defined it as the study, design and development of the algorithms that give computers the capability to learn without being explicitly programmed. For example at the start of the process a task is given to form a hypothesis from observations, then to use those hypothesis to make plans, execute the plans and observe the outcomes relative to the task efficiently.
The cumulative effect is like compounding interest in that each cycle creates even more intelligence, greater learning and a greater ability to form more complex tasks.
Artificial Intelligence and machine based learning can also be used as a hybrid model including human intervention. Let’s take an everyday travel example. A prospective clients uses a voice or text based intelligent assist tool to ask about prices for a flight from London to New York providing dates, passenger numbers and any other preferences.
AI robots use information gathered from existing data to provide a bespoke answer, however, if the client asks a more complex question then the robot introduces a human interface. This is all done seamlessly as far as the customer is concerned.
The AI robot continues to listen in to the conversation and through machine based learning it will remember and learns the new information so it is able to provide this independently for future enquiries. Over time through the repetitive process, it builds increased capability to process more and more complex enquiries.
This allows the travel company to free up valuable employee resource and redeploy costs so they can focus on functions that can create greater organisational value especially in areas that are more creative or emotional in nature.
From a commercial point of view the benefits to the travel industry are significant, for example;
• A potential alternative to over dependency on high cost Search and Paid channels.
• The opportunity to significantly reduce overhead costs especially in payroll and marketing. Early stage AI developments, even at sub human capacity, can be used to process simple or routine tasks or sell commoditised travel products for example point to point flights or accommodation only.
• AI provides the ultimate in personalisation using machine based learning capabilities to intelligently recognise, remember and recall customer needs, requirements and preferences working with existing CRM solutions.
• AI can be used to significantly improved the effectiveness and ROI of your e-mail marketing campaigns. AI can intelligently recognise buying signals through trigger language and words and prioritising ‘hot’ leads for follow up. It does this by using filters to qualify responses, specific words, sentiments and intent leading to greater targeting and prioritising of higher quality leads and ultimately conversion. It can also integrate with CRM solutions like Salesforce.com.
If we look outside of the travel industry there are some significant investments in Artificial Intelligence and related technologies with many enlightened and visionary business leaders recognising its potential.
According to Masayoshi Son of Japans Soft Bank, stated by as early as 2018; “The number of transistors on a chip is projected to exceed the number of cells in a human brain”. So convinced is Son of the future of AI that his firm recently purchased Cambridge based ARM Technologies for U$38 Billion calling the move a ‘paradigm shift’.
On the 8th of December 2016 the Guardian newspaper ran an article reporting that Capita, a FTSE 100 listed firm, said it needed to axe 2,000 jobs as part of a cost cutting drive and that it would reinvest the money it saved in automated technology across all the company’s divisions.
In the same article, the Apple and Samsung supplier Foxcomm was reported to have replaced 60,000 workers with artificially intelligent robots earlier this year.
Advances in AI mean that in theory every aspect of learning or any other feature of intelligence can in principal be so precisely described that a machine can be made to stimulate it.
There are many people who are concerned about creating technology that has the potential to have superior human intelligence and or the potential for creating unemployment by replacing people with machines but these justified moral and ethical concerns are for another post.
So what should travel business leaders be doing now?
The main message I want to leave the reader with is that AI is already here and it’s here to stay. Start giving AI some strategic focus, talk to your CTO and CMO about how your business could benefit from this and how can you get a competitive and first mover advantage, which parts of your business could benefit from any quick wins and which parts are under threat.
Start working collaboratively with a technology partner to help you map out your thinking, understand what technology is currently available and start developing appropriate solutions. There are many providers already out there already developing Bots for conversational user interfaces (UI) and working with some leading travel companies to develop solutions.
AI is not fantasy or futuristic, it is here now and has the potential to have an explosive effect on many existing travel businesses, one example is Emirates.
According to Sir Tim Clark, President of Emirates their end goal is to intelligently redefine the customer experience by developing a personal bond with individual customers at a scale which has never been achieved before in the history of the service industry.
Examining new technologies and ideas to identify the opportunities they represent for both incremental improvement and disruptive change in our business model. Big data, predictive analytics, artificial intelligence, machine learning, robotics, crowd sourcing and collaboration are areas we are considering to help us establish an architecture of continuous innovation and re-invention.
Contact Kevin Duckworth on 07860 953151 or on twitter