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In 1996, the internet was a fledgling technology barely out of its… | Howard Yu

  • Howard Yu
  • 21 March 2025
  • 2 minute read
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This article was written by a Hotel Marketing Flipboard. Click here to read the original article

image

In 1996, the internet was a fledgling technology barely out of its infancy, but it gave birth to a curious experiment: Microsoft’s Expedia.

This unassuming website, a digital travel agent for the dial-up era, offered a then-radical proposition—the ability for any individual with a modem to bypass traditional travel agencies and book their own vacations.

Fast forward nearly three decades, and the travel industry finds itself on the brink of another, far more profound revolution.

This time, the disruption isn’t driven by human interaction with drop-down menus, but by algorithms capable of orchestrating a complex itinerary before you finish your coffee.

Generative AI stands out as the most disruptive wildcard in the travel landscape. For years, consumers have comfortably navigated self-service travel planning: browsing aggregator sites, comparing flights, and reading user reviews.

This tedious ‘click fatigue’ is now primed for reinvention by autonomous booking agents such as ChatGPT’s Operator.

At its core, GenAI shifts the travel model from human-led aggregation to AI-powered curation. Instead of manually searching through dozens of options, travelers may simply instruct AI assistants to book itineraries in seconds.

The argument is simple: a well-designed AI interface can, within seconds, conjure precisely what the traveler desires.

Price Skimming: Are Hotels Leaving Too Much Money on the Table?
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Price Skimming: Are Hotels Leaving Too Much Money on the Table?

Yet this isn’t just about speed; it’s about a fundamental shift in power, from human curation to algorithmic precision.

What does this mean for industry players?

→ OTAs, which often charge 15–30% commission, risk disintermediation if hotels or airlines seize the opportunity to encourage direct bookings – and if AI helps customers see the direct channel’s cost savings in real-time

→ If an AI decides a $200 fare savings offer is worth more than 5,000 loyalty miles, passengers might well forsake brand loyalty for cost efficiency

→ Low-cost carriers such as Ryanair and easyJet may find their labyrinthine fees exposed when AI flags mandatory charges for seat selection and priority boarding, eroding the appeal of headline “€9.99 fares.” These airlines’ profits currently depend a practice that AI might systematically neutralize

This technological shift amplifies existing industry trends:

— 46% of organizations risk missing their interim energy transition goals
— 72% of corporate travelers extended business trips for leisure in 2023
— The sector faces multiple challenges, from geopolitical uncertainty to evolving consumer preferences

For industry incumbents, the lesson is clear:

Organizations with desirable physical assets (from global airline networks to distinctive hotel experiences) that invest in strong data-driven marketing stand to flourish.

The travel industry stands at a strategic crossroads — is your organization prepared for this fundamental power shift?

Read IMD’s full breakdown here:

https://lnkd.in/e2XSQG3T

Please click here to access the full original article.

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