AI in Tourism

AI application in tourism is seen as the result of the increasing consumer interest in the individual and unique travel that is created by using the machine learning techniques of recommendation systems. Further, AI-chatbots and virtual assistant services increase consumer satisfaction by helping them in real-time, managing bookings, and responding to queries effectively. In addition, applications of dynamic pricing and revenue management include the use of artificial intelligence in assessing market trends, demand variability, and competitor’s prices, to help the firm update prices and make the highest possible revenues.

The AI in Tourism Market is expected to grow with a significant CAGR of 23.1% during the forecast period (2024-2032). Artificial intelligence technologies deployed in tourism services prioritize experience optimization while optimizing operational resources to generate better decision outcomes throughout the tourism sector. Travel and tourism businesses use AI-powered applications including customer service chatbots alongside machine learning recommendation engines, customer demand forecasting programs and facial recognition hardware. Travel companies along with hotels airlines and tourism boards can maximize their efficiency alongside increasing customer engagement and retail pricing optimization through automated big data processing with natural language capabilities.

On February 27, 2024, Huawei launched four intelligent solutions to accelerate intelligence in transportation i.e. Intelligent Transportation System 2.0 Solution, Smart Railway — Perimeter Detection Solution, Smart Airport — Fully Connected Fiber Network Solution, Smart Airport — Perimeter Security with Fiber Sensing Solution.

• Based on the type, the market is segmented into air travel, rail travel, and cruise travel. Among these, air travel held a dominant share of the market in 2023. AI-powered predictive maintenance is used by airlines to reduce delays and maximize aircraft reliability. Also, the rising use of facial recognition and biometric authentication that AI eliminates security checks and the boarding process. In addition, AI helps airlines to provide personalized in-flight services based on customers' preferences and their travel history. For instance, on March 6, 2024, Qatar Airways presented its second-generation virtual cabin crew, Sama 2.0, powered by innovative conversational AI. The national carrier of the State of Qatar has broken new ground at ITB Berlin 2024 with the successful launch of its holographic virtual cabin crew, Sama 2.0. Qatar Airways is the world’s first airline to develop an Artificial Intelligence powered digital human cabin crew to assist its passengers in designing curated travel experiences.
• Based on deployment mode, the market is segmented into on-premise and cloud-based. The cloud-based held a significant share of the market in 2023. The cloud-based AI solutions help real-time data processing, scalability, and complete customer interaction in the tourism sector. Cloud AI is used by travel agencies, hotels, and airlines for dynamic pricing, predictive analytics, and smart inventory management. These platforms are also cloud-based, which helps to improve collaboration with stakeholders by making the data sharing efficient to help in making better decisions. Similarly, AI-driven cloud solutions also secure the cybersecurity of managed transactions and database security of the customer’s data. In addition, AI in the cloud allows an automated booking system as it gives a boost to operational efficiency and customer accessibility. For instance, on April 9, 2024, IHG Hotels & Resorts, one of the world’s leading hotel companies, and Google Cloud, announced an expanded partnership that will fuel new customer experiences within the IHG One Rewards mobile app. With Google Cloud’s technologies, IHG will launch a generative AI-powered travel planning capability that can help guests easily plan their next vacation directly in the IHG One Rewards mobile app in a suite of new features that will launch in the second half of 2024, creating a more dynamic digital guest experience.
• Based on the solution, the market is segmented into virtual assistant & chatbots, pricing & revenue management, and booking management systems. The virtual assistant & chatbots Pacific is expected to grow with a significant CAGR during the forecast period. The tourism customer interactions are changing through virtual assistants and chatbots that use AI to offer instant support and personal recommendations to guide visitors. Chatbots are used by travel agencies and hotels to handle inquiries, and bookings and also provide real-time assistance. Also, AI assistants are being used by airlines for flight status updates, checking one’s baggage, and more personalized travel tips. For instance, on November 7, 2024, The Saudi Tourism Authority (STA) unveiled SARA, a cutting-edge AI digital human developed to represent Welcome to Arabia as a brand ambassador, a travel companion and personal concierge.
• For a better understanding of the market adoption of AI in Tourism, the market is analyzed based on its worldwide presence in countries such as North America (U.S., Canada, and the Rest of North America), Europe (Germany, France, U.K., Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. Throughout the forecast period from 2024 to 2032, Asia-Pacific is expected to grow with a significant CAGR. The rising uses of digital transformation speed alongside increasing guest demands for tailored travel options to attract artificial intelligence growth. AI technologies have found broad adoption across travel agencies airlines and hospitality establishments because of Asia-Pacific's well-developed tech-savvy consumer market. Furthermore, smart cities along with tourism sustainability success require AI for optimized management functions which results in better visitor satisfaction. Besides demand forecasting and route optimization, AI technology operators handle large tourist numbers effectively. Moreover, major Asian companies had major collaborations, partnerships, and launches and also use AI as a foundation for delivering instant chatbot assistance and tailoring travel plans and intelligent booking processes to customers.

On December 06, 2024, Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading technology services and consulting company, announced a collaboration with SIAM.AI, a member of the NVIDIA Cloud Partner program in Thailand. The companies will leverage NVIDIA accelerated computing and software to develop an AI-powered digital assistant for the Tourism Authority of Thailand. This collaboration will utilize infrastructure, data, and networks within the country, advancing Thailand’s sovereign AI objectives.

• Some of the major players operating in the market include Snowflake Inc., NVIDIA Corporation, IBM, Microsoft, Amazon Web Services, Inc., Salesforce, Inc., HUAWEI Developers, Sabre GLBL Inc., SAS Institute Inc., Amadeus Hospitality.