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The travel and hospitality industry has consistently embraced technological advancements to enhance operational efficiency and elevate guest experiences. In 2025, this trend will continue with the integration of AI in travel and hospitality playing a pivotal role. The International Air Transport Association (IATA) forecasts that global airline revenue will surpass one trillion dollars in 2025, with a record 5.2 billion passengers expected to travel, indicating a robust recovery and growth in the sector.
To effectively manage this surge and meet evolving traveler expectations, industry players are increasingly adopting AI technologies. Notably, AI adoption in the hospitality sector is projected to grow at a compound annual growth rate (CAGR) of 25.1% from 2023 to 2030, driven by advancements in virtual assistants, predictive analytics, and automation tech.
In this comprehensive read, we’ll explore the top emerging trends and opportunities in AI within the travel and hospitality industry, highlighting how these innovations are set to transform the landscape.
Smarter, conversational artificial intelligence will be integrated into various platforms to provide enhanced customer experience and satisfaction with improved booking processes, customer service, and 24/7 assistance at every step of the guest’s travel journey. These ‘smarter’ chatbots help travel & hospitality brands save time and reduce costs, offer personalized travel recommendations, real-time trip updates, and quick resolutions. Guests will know that they are communicating with AI, so companies must ensure these chatbots are providing valuable, efficien,t and convenient insights.
The intelligent concierge concept takes chatbots and virtual assistants a step further, offering the most sophisticated and personalized concierge experience for guests. The emergence of Large Language Models created the capability to leverage highly conversational, personalized experiences that rival a traditional, physical concierge. Responses and inquiries are deeply personalized, timely ,and via any channel the guest prefers.
Enterprises are cooking up a storm with AI in travel and hospitalty leveraging AR and VR tech to enhance the guest’s travel experience, offering the ability to preview destinations, virtually tour accommodations, or even experience local attractions before they make a reservation or booking decision. Virtual reality cannot replace the experience of a true vacation, but it can certainly provide a realistic expectation of the destination. This capability is also growing in popularity in the hotel space, with virtual tours of rooms and amenities to stand out from competing hoteliers. Booking.com released a recent study that showed that 43% of global travelers say that virtual reality inspires their vacation choices and that another 46% say they are more likely to travel to unfamiliar destinations after experiencing it virtually.
Another important aspect that is being revolutionalized leveraging AI in travel and hospitality is hyper-personaliztion. Evolving the user experience with personalization is no new trend for any industry, but artificial intelligence takes personalization to an entirely new level. AI algorithms and integrations enable hotels to get a 360 view of the guest in minutes, giving them the opportunity to deliver unique, exceptional experiences to each and every one of their guests. The new term ‘web of one’ has been introduced recently as segmentation of data so deep and specific to the individual guest that it has the potential to transform how all hotels communicate with all guests.
Imagine a guest checking into a hotel for their favorite team’s game at a nearby stadium. AI could enable the hotel to know about this particular guest’s plans in their city so they could offer a room that has stadium views, share gameday tips or even recommend the local team’s pub where fans gather. The hotel can easily offer that unique, tailored treatment to the guest which has the potential to drive extreme loyalty and memorable experiences with the brand.
The Generative AI market is expected to grow to $1.3 trillion over the next 10 years from a market size of just about $40 billion in 2022, according to a recent report by Bloomberg Intelligence (BI). Generative AI that is baked into loyalty programs is a complete game changer for brands, especially those in the travel & hospitality space. Guests enrolled in a company’s loyalty program are already providing consent and access to their zero and first-party data, so coupling that data with a powerful generative AI framework is truly a program and company differentiator. Looking to take your loyalty platform up a notch? Explore Capillary’s Loyalty+.
There are still some aspects of AI in travel and hospitality that have been adapted at a slower rate. Some of these technologies, such as customer service robots at check-in or in the lobby, robotic bartenders taking drink orders and even mixing cocktails, or AI-powered robots managing congestion in busy airport terminals, may seem far from becoming the norm. However, these innovations are already being tested and adopted by a few big names in the travel and hospitality market, signaling a gradual shift towards acceptance and scalability.
The Capillary team attended the Skift Global Forum in NYC in September 2023 to connect with industry leaders and discuss the trends shaping travel and hospitality. The rise and acceleration of AI was, unsurprisingly, a dominant theme across sessions covering marketing, operations, and IT—highlighting the significant role of AI in travel and hospitality. Previous concerns that “AI will replace me” have evolved into a more competitive mindset: “Another company may be utilizing AI more effectively and will end up ahead of us.”
Capillary has extensive experience in leading and innovating in the travel and hospitality industry. Not only was the loyalty platform (Loyalty+) specifically designed to inspire and delight travelers throughout their entire lifecycle with embedded ML & AI, but we’ve now incorporated generative AI into our technologies. Reach out to us today to learn more about Capillary’s travel & hospitality experience and how we stay ahead of trends and deliver memorable experiences across their entire travel lifecycle.
AI in travel and hospitality helps enhance customer experiences through predictive analytics, chatbots, real-time personalization, and efficient operations. From dynamic pricing to virtual assistants, AI is transforming travel experiences by creating smoother, more engaging journeys for customers.
AI-based loyalty programs for travel use machine learning and data insights to deliver hyper-personalized rewards, anticipate customer needs, and create dynamic loyalty tiers. These programs are shifting from transactional models to value-driven relationships by integrating emotional loyalty elements.
Some key travel and hospitality AI trends include the rise of generative AI for creating personalized marketing campaigns, AR/VR for immersive travel experiences, and AI-driven hyper-personalization in travel loyalty programs. These trends are setting the stage for the future of AI in hospitality.
AI is transforming travel experiences by enabling real-time itinerary updates, intelligent customer support through chatbots, personalized recommendations, and seamless booking processes. AI-powered tools also ensure better travel planning and customer satisfaction through data-driven insights.
The future of AI in hospitality lies in leveraging data to create highly personalized guest experiences, from tailored room preferences to loyalty rewards based on unique customer behaviors. By integrating AI with loyalty programs, hospitality brands can drive deeper engagement, build emotional connections, and increase customer retention.
