Who in travel should be most worried about AI disruption?

At the recent Aito conference, I was asked the intriguing question: “Which travel sector is most threatened by the rollout of AI?”

 

In all honesty, it’s easier to flip this question and look at what protections the travel industry has against AI. For example, ‘asset’ holders like airlines, cruise lines and hotels aren’t threatened because customers will always need them, and they can’t be “disintermediated”.

 

Therefore, companies such as Tui, easyJet and Jet2holidays are likely to see AI as a way to improve efficiency and will use it to open new distribution routes. However, online travel agents face two significant and imminent threats.

 

More: What’s the biggest impact of AI in Travel? 

 

Endacott urges AI voice adoption across travel with new start-up

 

Over the past 20 years, Google has dominated holiday search, and its algorithms that reward higher click volumes with lower average costs have established a fairly “locked-in” hierarchy primarily shared between Love Holidays, On the Beach and booking.com for most holiday search terms.

 

This is now being seriously disrupted by the introduction of Google AI search mode powered by Gemini, which has taken 30-40% of the traffic that used to flow to the top-positioned advertisers and redistributed it in a completely different way based on the best match to a customer’s request.

 

This trend is only going to be exacerbated as competing AI search tools such as ChatGPT and Perplexity continue to rapidly increase their UK search market share.

 

At the same time, Gemini and the other LLM (Large Language Model) search engines are launching “agentic AI” solutions for travel. These enable customers to either type or use voice activation to make complex, detailed travel requests, which then open new windows with the “agentic AI agent” mimicking a human to use relevant travel sites like Skyscanner to identify the best flight options before combining them with hotel options from booking.com.

 

This new-age dynamic packaging avoids the extensive costs and restrictions of Atol bonding and therefore offers customers lower-cost options, threatening to undermine the OTA’s core offering of range and lowest price.

 

Some customers will still seek principal status and Atol protection, but I doubt this will be the majority, which puts Love and OTB’s market share at real risk. However, nobody should ever dismiss this innovative business model, as they could simply pivot to using AI to develop their offering while leveraging their established brand recognition.

 

Changing face of the travel agent

As I wrote recently, travel agents also face a significant threat, but ironically, it’s not from being replaced by AI but from more agents joining the hunt for customers and “super agents” hoovering up a much larger share of the market.

 

We have already seen 37,000 agents join the sector under the umbrella of InteleTravel, and this figure is set to rise dramatically as “agentic AI” tools mean nearly anyone can book travel with minimal training.

 

Add to this the extensive product knowledge available at their fingertips from AI tools, and the “agency” battle shifts to how cost-effectively agents can attract customers and on what scale.

 

I believe there will be a new wave of “influencer agents”, using TikTok, Instagram, and Facebook to promote inspiring destination content to generate leads that they then either pass onto third-party price comparison sites or book themselves using agentic AI tools.

 

Even within traditional homeworking channels, top sellers can grow even faster by delegating all their back office booking and research tasks to AI while they use their freed-up time to leverage their human sales skills to handle two to three times more customers per year. These “super agents” will logically gain increased market share, forcing weaker agents to go part-time or leave the sector.

 

It will also be fascinating to see what new travel brands are created using the new “model context protocol” (MCP) technology. MCP is a simple standardisation wrapper that LLMs are forcing suppliers to put around their API feeds to make them into “standardised bricks” that can be accessed by AI coding teams to create new “travel superstores”.

 

Using MCP tools from suppliers significantly simplifies the creation of price comparison sites and innovative packaging tools such as “Event Trip,” which is a new spin-out soon to be launched by my own Neural River incubator.

 

The established travel order is set for a major shake-up – not in the next 10 years as some commentators predict, but rather within the next two years – as the wave of AI change is now accelerating rapidly, with even the slow-moving travel sector beginning to engage first gear.