Travel firms warned to weigh up ‘creeping costs’ of artificial intelligence
Travel companies that rely too heavily on artificial intelligence could end up paying the price due to the “creeping costs” of using it, the Advantage Travel Partnership conference was warned.
In a keynote speech delivered at the Madrid event, The Times’ economics editor Mehreen Khan highlighted major tech companies including Amazon, Google and Microsoft are expected to invest $649 billion in the technology this year alone.
In a subsequent panel discussion on future insights and predictions, Gold Medal managing director Simon Applebaum said this significant investment will inevitably have to be recouped from users in the future.
“We’re all getting used to using it [AI] for free, but it can’t be free; at some point we’re going to have to pay for the amount tech companies are putting into it,” he said. “That could either be with advertisements, which would fundamentally shift thee products, or in subscriptions”.
Applebaum compared the current AI landscape to the “old drug dealer model,” where the product is initially free to build dependency, before stating he is “in no rush to dive into AI too deeply” unless the business case is “hugely weighted in its favour”.
When asked by Advantage commercial director John Sullivan, who moderated the panel, when he thinks payment may be required for the use of generative tools, Applebaum predicted a shift could come “three to four years from now,” comparing it to the gradual price hikes introduced by Netflix.
Applebaum warned companies leaning too heavily into AI might find it difficult to sustain their business model in the future “unless they get a massive market advantage” due to “creeping costs in the background”.
He further cautioned that businesses using the technology to replace headcount face a long-term risk: “The problem is, if you lose those people, you can’t go and get them back.”
The panellists agreed that while AI will likely boost efficiency by handling “mundane tasks,” maintaining a human element is essential to engendering consumer trust.
Gillian Wickers, head of UK and Ireland sales at British Airways, emphasised passengers still want a personal connection.
“We’re using AI behind the scenes to make everything more efficient but we’re still keeping the human touch,” she said, adding: “The personal touch is what people still want at the end of the day”.
Giles Hawke, Celebrity Cruises’ international vice-president, added the line has begun removing screens from check-in desks and is looking at how to integrate AI into the process so staff can focus on talking directly to passengers.
He argued the true value of AI is in the back office, allowing teams “to be more focused on the consumer and what they want”.
In a separate session, conference host Georgie Barrat – a tech journalist and television presenter – described the current era as the “greatest democratisation of opportunity in human history,” noting AI is “levelling the playing field” and allowing smaller companies to “punch way above their weight”.
However, Barrat warned that as the quantity of content goes up, distinctiveness often goes down.
She urged delegates to protect their expertise, noting that algorithms cannot replicate a person’s judgment or industry experience.
“In an AI world, your human experience is your hard competitive advantage,” she said.
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