As artificial intelligence (AI) continues to reshape industries, travel and tourism businesses are urged to adapt and invest in this transformative technology. According to Filip Filipov, Chief Operating Officer at OAG, AI is here to stay, and companies in the travel sector must start understanding and incorporating it into their operations.
During his presentation at the recent Aviation Festival Asia in Singapore, Filipov discussed the rapid evolution of AI, emphasizing both its strengths and limitations. He pointed out that while AI has made significant strides in areas like data analysis, language understanding, and decision-making, it still faces challenges such as the potential for “hallucinations” — situations where AI systems, particularly chatbots powered by large language models, provide incorrect or misleading answers with confidence.
Filipov highlighted how AI is already being used to improve customer experiences in the aviation sector. For example, airlines are using AI to enhance customer satisfaction, streamline airport operations, and accurately forecast demand and market trends, which aids in pricing and decision-making. Online Travel Agencies (OTAs) like Expedia are also using AI-powered platforms to engage with customers, as seen in their Dream It, Plan It program, which has facilitated over 29 million virtual conversations.
However, despite the growing use of AI, Filipov warned that many travel businesses are still underinvesting in technology. According to data from SITA, the typical technology spend for travel businesses is between four and six percent of annual revenue. This figure is rising, with technology investment growing by 10 to 15 percent annually as more companies shift funds from capital expenditures to operational expenses like cloud services and AI.
Filipov advised travel industry players not to focus on building AI models themselves but to rely on major technology companies like Google, Meta, OpenAI, and Microsoft, which are investing billions into AI infrastructure. He pointed out that these companies are better equipped to develop AI models and that travel businesses should instead focus on understanding AI, training their teams, and licensing the technology.
He stressed that the current wave of AI development is as significant as the advent of the internet, mobile devices, social platforms, and cloud computing services. Companies that fail to invest in AI now risk falling behind. While Filipov acknowledged that AI may not be perfect yet, he believes its potential will only grow over time. He cited the rapid advancements in AI, such as the evolution of ChatGPT from a basic text summarizer to an advanced task-performing agent, as evidence of AI’s transformative power.
Filipov concluded with a quote from Bill Gates: “We overestimate what can be done in a year and underestimate what can be done in ten.” He urged companies to embrace AI and focus on applying it to specific problems rather than viewing it as a one-size-fits-all solution. While some applications, like customer support chatbots, are already mature, others, such as payments, are still developing but hold great promise for the future.
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