The Impact Of AI And ML In Tourism And Hospitality : BOON Or BANE?

Not too long ago, with the advent of online booking search engines and direct to consumer travel websites, there was a big furore about whether the role of travel agencies and independent travel advisors was still relevant. This outcry is now being replaced by the greater fear of how (or when) AI -artificial intelligence) and ML (machine learning) will invariably replace manual, repetitive and often outdated job functions and menial tasks.
With AI and ML tools, travellers no longer need to visit travel agencies to book flights or search for accommodation. AI assistants and Intelligent chatbots have now taken the place of travel agents allowing travellers to book flights and accommodations and hire vehicles online, including a plethora of travel-related services much to the glee of the better-informed traveller.
Experts are persistently upgrading artificial intelligence solutions making them reliable and effective instruments for numerous spheres. The tourism sector is implementing the best of AI and ML into versatile segments. These modern technologies help business owners perform various administrative tasks and offer excellent customer services on the one hand and ensure an effortless and convenient practice for travellers on the other.

Increased deployment of AI and ML in the travel industry accounts for:

a. Enhancing personalization
b. Giving valuable advice
c. Ensuring a speedy response

These deliverables are performed even when the employees are absent. As many hotels and resorts worldwide depend heavily on artificial intelligence solutions in delivering their services and gaining a strong reputation, the travel AI market is projected to exceed $1.2 bn by 2026. (Source:

Obviously, the impact of artificial intelligence in the tourism industry should be given due recognition towards satisfying and meeting the requirements of today’s ‘new-age’ travellers. AI-driven solutions reveal another dimension to a big number of travel facilities, including airports, railway stations, hotels, and other travel-related businesses.


The application of AI in this article shows beyond doubt that from a traveller’s perspective, the far-reaching integration of innovative technologies has considerably simplified trip planning, itinerary design, booking, and the trip itself.

As for the travel-related service providers, AI technologies enable them to forecast travel options, tailor customized trip solutions adjusted to traveller’s needs and timings, uplift customer service, boost operational capacity, reduce running expenditures, and bring higher profits for the tourism business.

Based on the above, the benefits of AI and ML greatly outdo the means. Let us investigate the various challenges from an entrepreneurial viewpoint, by examining them from a few perspectives.

§ Technologies have come a long way in their ability to sieve and generate fast, accurate demand forecasts, but how much do we know about it?

§ The practice of Demand forecasting is an analytical assessment process of potential demand for the company’s products in the future. It is based on algorithms and uses historical data (past demand), market trends, and uncontrollable factors (competition, seasons or weather). For some specialists, demand planning and forecasting are synonymous, but, forecasting is a starting point of planning.

§ In contrast to the above, Demand planning includes forecasts of both products or services and items used in the supply chain. Simply put, planners take care of inventory optimization and demand forecasting and compare the forecasts with sales.


The concept of using data to make better informed management decisions is not entirely new. Before big data became a buzzword, business entrepreneurs had recognized the intrinsic value of business intelligence and statistics. The term ‘big data’ currently refers to large data sets characterized by high volume, velocity, variety and volatility as modern apps and big data technologies allow organizations to filter immense amounts of structured and unstructured data.

Yet, despite the hype around becoming data-driven and having virtually limitless access to all kinds of data, many organizations fail to deploy such information and to use it to their benefit. Obviously, the barriers to big data adoption cannot be removed overnight and overcoming them should involve a well-thought-out strategy.

How then, can the use of AI and ML be of the greatest benefit to support the travel and tourism sectors?

Artificial intelligence is particularly relevant to travel and tourism for several reasons. Tourists need to make a series of informed decisions about future trips, for example, choosing a destination, transportation requirements, hotel accommodation, and activities, among other things. These decisions will have a significant impact on tourists’ satisfaction with their trips, particularly their budgets.


However, the range of destinations, transport, accommodation, and travel-related activities currently available present an almost infinite array of options necessitating assistance and human interaction. Below are some of the challenges.

a. Tourism organizations and travel agents face a similar challenge when trying to find the best match between customers and travel packages tailored to their needs. Organizations have an almost unlimited supply of potential customers. Thus, matching demand with a product is an extremely complex process that seems well suited to the capabilities of AI. Once at their destination, tourists must navigate the realm of the unknown, characterized by differing habits, languages, cultural norms, and cuisine preferences, among many other features that may be unfamiliar to them. Again, AI can help tourists in such “strange” environments, for example, by recommending a travel itinerary or helping with language and cultural barriers. Also, AI can help organizations to personalize experiences to tailor them to the desires of tourists.

How can the use of AI and ML be of the greatest benefit to support the hospitality sector?

b. One of the potential benefits of AI in hospitality is personalized recommendations. By analyzing data from customers’ previous bookings, preferences, and feedback, AI can make personalized recommendations for their next stay, such as suggesting room types, amenities, and activities and suggesting visits to local attractions.
What is the future of artificial intelligence in the hospitality industry? In particular, AI will become valuable for hotels and their revenue management processes. By using predictive modelling, hotel professionals will be able to analyse historical data and predict future demand and revenue. In doing so, pricing will be optimized and revenue maximized at all times.


Irrespective of the benefits and pitfalls associated with the application of AI and ML, the vast array of travel service providers and stakeholders must take cognizant of the changing and often-times, travellers with higher expectations.
By pursuing a strategy via a company culture of customer engagement in tourism, organizations will be able to lose the gap and forge a link with their customers in the tourism, travel and hospitality sectors. Customer engagement (CE) is a ‘deeper, more meaningful connection between the company and the customer. ‘ The more ‘engaged’ the customer is, the likelier he is to buy more and give referrals. Customer Engagement Management plays a central role in the success of organizations in tourism.

Written by:

Dr. John Chan Weng Fatt, DBA
Certified Tourism Consultant
Travel Management Trainer
SENTRAL College Penang Industry Expert for the School of Tourism & Hospitality