Luxury online travel agency Luxtripper has launched a spin-off B2B venture offering its proprietary Artificial Intelligence technology which it claims improved its bottom line by 300%.
Nena Chaletzos, who launched the affordable luxury site in 2013, has set up Travel Genetics having successfully pitched to join the Silicon Valley Plug and Play technology start-up accelerator.
Within four weeks the firm has five major pilots lined up with some of the world’s biggest travel brands including a travel management firm, a hotel chain and a distribution system.
Chaletzos said Luxtripper built its own technology having realised low conversion rates in travel of around 1.45% made it expensive to grow its team of agents to scale the business.
She said as well as personalising from the point of view of traveller intent, Luxtripper approaches personalisation from the inventory side making quote building far more efficient.
Its IDNA (standing for Inventory DNA) artificial intelligence technology automatically tags properties according to a long-tail of attributes based on descriptions and data inputted about product.
This means product can be closely matched to customer requirements based on specific attributes and facilities of the property as well as attractions and activities available in the destination.
Chaletzos said the technology has proved itself with Luxtripper which saw its conversion rate leap to 5% and loyalty levels hit 90%.
She claimed as a result the OTA has established itself as the world’s most influential luxury travel brand on Facebook.
It spends just £500 a month on marketing to drive 500 high quality leads looking to spend at least £7,500 and achieves a return on investment of £15 for every £1 spent on marketing.
“After we launched in 2013 we realised conversions in travel are really low,” said Chaletzos. “Every time a customer came to our site we would have to do eight quotes.
“On average that was taking five to nine hours and you ended up making a tiny margin. That’s when we started to focus on internal technology.”
Travel Genetics is still in “stealth mode”, said Chaletzos – it doesn’t even have a website yet – but she expects it to drive growth in the business by transforming clients’ bottom line.
“Everyone talks about personalisation and when we went to Silicon Valley there are loads of start-ups claiming to do personalisation.
“A lot are creating bots using artificial intelligence, but the challenge is to actually make these things work so you need the market and product intelligence behind it.
“Information about hotel amenities is pretty standard, but we have expanded that for every hotel with additional tags and content to enable travel companies to merchandise in a very relevant way.
“Everyone is trying to personalise at the front end but no one’s doing it on the inventory side. We know what inventory a person is looking for.”
Chaletzos said personalising inventory allows product matching at a granular level and because the technology learns it knows, for instance, what makes a property ‘off the beaten track’ or ‘authentic’.
“This is working on an emotional level,” she said, “what people really want from a holiday. We have enhanced the data by adding what experiences a hotel caters for.
“For each data point we have to analyse what data is available, what we can collect and how we decipher how that hotel really does offer that experience.”
Chaletzos said manual processes of matching customers needs with product means 80% of agents’ time is spent on processing tasks rather than customer service and relationship building.
She expects automating inventory to allow OTAs to merchandise more intelligently, reduce GDS look to book ratios and encourage better travel programme compliance among corporate travellers.
Travel Genetics was built over two-and-half years with a team of developers working on it full time. It has an outstanding application for a patent pending in the US.
Chaletzos said the five paid pilots that are about to start are for firms with a combined turnover of $60 billion.
“We want to increase their bottom line. We increased ours 300% with this technology but even if we achieve 10% that’s significant.”