With AI-driven personalisation, predictive analytics, and automated interactions, travel brands can scale up their offering and stand out in a competitive market, says Romain Lerallut of the Criteo AI Lab
The way people plan holidays is rapidly changing. While online reviews, booking sites, and ‘Top 10’ lists remain essential tools for many travellers, a growing number have embraced a much smarter companion – AI. This notable shift in how holidays are planned is not only reshaping consumer behaviour, it’s also reshaping the entire travel sector. If travel brands aren’t already using the power of AI, now is the time to start.
Europe is experiencing a significant rise in AI-assisted travel bookings, according to Criteo’s research into global travel. This trend underscores AI’s growing role as a digital travel agent, transforming the way travellers plan and book their holidays.
What’s fuelling the trend?
Efficiency, hyper-personalisation, and sheer convenience are propelling this trend. Our research shows that over 41% of global travellers now rely on AI for destination ideas, with more than 30% using it to choose accommodation, dining, and activities. This is a paradigm shift driven by a fundamental desire for simplicity and relevance.
Planning multi-leg journeys or booking extensive itineraries involves complex decisions and strategic thinking. Traditional recommendation systems can only go so far here, managing the combinational complexity and personal constraints involved in planning, say, a family ski holiday or a multi-city European tour requires more intelligence. That’s exactly where advanced AI excels, dynamically integrating consumer preferences, budgets, and logistics to propose personalised travel recommendations.
One step ahead
Advanced AI agents can now incorporate nuanced context into their decision-making processes. For instance, an AI travel agent would recognise that a ‘stag weekend in Barcelona’ calls for downtown hotels and lively nightlife recommendations, while a ‘honeymoon in Tahiti’ should emphasise aesthetic appeal and intimate experiences such as snorkelling excursions. Crucially, these advanced systems can articulate the reasoning behind their suggestions, increasing consumer trust.
These capabilities go beyond familiar pre-packaged options, being fully dynamic and adaptable to any type of travel scenario, thanks to the sophisticated reasoning abilities of large language models (LLMs).
The new travel agent
Travel recommendation systems have certainly evolved dramatically. If we look back, early AI systems used simple logic: ‘Travellers who booked X also booked Y.’ Today, AI leverages explicit linear reasoning, assessing detailed consumer preferences, predicting what travellers will value most, be it cost efficiency, luxury, or convenience, and providing tailored recommendations accordingly.
AI has taken travel planning from a static, fragmented experience into a dynamic, integrated journey. Traditional deterministic models, which rely solely on past purchases, have changed. Advanced AI systems can now predict consumer preferences by analysing vast datasets – from seasonal trends and cultural nuances to real-time behavioural signals – delivering intuitive and tailored recommendations that adapt to travellers’ unique contexts and needs.
The next-generation AI systems are sophisticated, employing explicit, constrained, and non-linear reasoning powered by LLMs. Imagine an AI assistant that doesn’t just recommend a hotel based on past bookings, but proactively suggests a bundled travel plan that aligns perfectly with lifestyle, budget constraints, and immediate context. This isn’t futuristic; it’s already happening.
These advanced AI agents can dynamically build comprehensive travel packages – flights, accommodation, dining, and local experiences – in one seamless interaction, fundamentally changing how consumers interact with travel brands.
Enhancing the customer journey
Today’s travellers also expect a frictionless journey, and this starts long before they set off for the holiday. The full journey needs to be carefully considered by travel brands, from the initial point of awareness and consideration right through to the booking. AI has the ability to meet these expectations, providing seamless experiences across all touchpoints.
By analysing consumer behaviour, content context, and timing, AI can serve highly personalised and engaging advertisements exactly when travellers are most receptive. This is crucial in not only capturing consumer interest, but in increasing conversion rates. In our research, we found something very important – converting existing customers through personalisation and targeted AI interactions is five times cheaper than acquiring new ones.
As consumers expect ever more immediate responses, AI can help ensure travel providers are one step ahead, anticipating demand and dynamically adjusting offerings and ads in real-time. This precision makes the customer’s journey not just seamless, but predictive. Travel brands have a real opportunity to engage customers with hyper-relevant content and provide positive experiences that encourage them to keep coming back.
This can make a real difference when it comes to improving customer satisfaction and boosting conversions. AI, therefore, has become not just a facilitator of customer satisfaction, but a driver of loyalty and profitability.
Beyond holiday bookings
For travel brands, AI is transformative. Its potential extends beyond individual bookings, it positions itself as a virtual travel agent. Future AI systems can offer travel guidance, constantly learning and adapting to preferences over time to provide tailored recommendations. This has the opportunity to foster trust and customer intimacy in this digital age, where travellers rely on their AI assistants not just for one-off holiday bookings but for a variety of trips in the future.
AI in travel isn’t coming, it’s already here. Brands that understand and adapt to this new reality will thrive, capturing the loyalty (and wallets) of digitally savvy travellers that are looking for seamless, stress-free holiday bookings. With AI-driven personalisation, predictive analytics, and automated interactions, travel brands can scale up their offering and stand out in a competitive market.
About the author
Romain Lerallut is VP of Engineering at Criteo and Head of the Criteo AI Lab.