Tim Hughes: “Post the search box, there’s lots of interesting AI content work you can do.”
Both a human revolution is needed amid the technology revolution unfolding in travel if the industry is to navigate into the third age of digital travel with resilience, confidence and purpose, and as it does so, it faces several quandaries.
That was the key takeaway from discussions with travel tech companies gathered at WiT Japan & North Asia in Tokyo this month.
The first quandary is, how do you strike the balance between tech and product innovation and the human behaviour of consumers – so that all the AI-infused products being rolled out by travel brands are not too far ahead of what consumers are used to?
Timothy Hughes, vice president, corporate development, Agoda, called it the “curse of the search box”, where consumers remain tethered to the traditional destination and date search paradigm, hindering the adoption of more advanced recommendation systems.
“We haven’t yet figured a way to train consumers away from the search box. But post the search box, there’s lots of interesting AI content work you can do. I think we’re not that far away from the tick box filtering system disappearing, being replaced by a filtering system.”
Reimagining the user interface, but what about the human attention span?
David Liu, Klook, in conversation: “Maybe at some stage down the road, we can completely change the interface.”
One might argue though that consumer behaviour may be faster to change given the plethora of mass generative AI tools out there, especially this week when OpenAI and Google announced a slew of new features that will accelerate mass adoption by consumers and techies alike.
David Liu, chief product officer, Klook, observed, “Maybe at some stage down the road, we can completely change the interface. It’s no longer a user coming up to search. Maybe they’re going to tell you something or they’re going to show you a picture or whatever and you’re going to start this engagement with the user from there.”
In the reimagination of the user interface, there is another quandary – that of designing for shorter attention spans. Said Liu, “I was sharing data with my team the other day – the attention span of a human being. There’s research about this – in 2000 it was 12 seconds, and in 2013, it was 8 seconds. And now, if you look at the newer generation, the behaviour on TikTok and Instagram is like two to three seconds at most.”
How do you design such a complex product as travel in that fraction of time? “We need to make it as easy as possible, as intuitive as possible, for customers. But the easier it is on the surface, the harder it is for us under the surface,” said Liu.
How do humans keep up with pace of change? Rapid reskilling needed
So how do humans working in travel tech companies keep up with the pace of change? Is changing mindset good enough, as many CEOs have told me they’re trying to instill in their organisations? What if the mind is willing, but the body or the hearty is not? Existential questions to be posed in another place …
Practically, rapid reskilling is needed for the workforce to work with the new tools to ensure their jobs are not displaced. And while there was much talk about AI replacing skills, not jobs, the reality is, many tasks will be taken over by the machine and humans will have to figure out our place in the value chain.
For instance, will humans be relegated to making the hotel beds while the machine figures out who sleeps in them, what price they should pay and what sheets they want?
Grappling with the “resource allocation battle”
One practical tech solution, said Klook’s Liu, is to build flexible and modular systems which allows for rapid adaptation of the tech infrastructure and for systems to be decoupled to meet shifting consumer demands.
Liu said this was a valuable lesson learnt during the pandemic. “Over time, we were making the system more and more flexible, and making it more and more standardized. So today we are able to use this, what we call, things to do template, to basically have the customers book anything as a trial.
“The more flexible the systems are, the better you have a chance when things will change.”
Then there’s the quandary of what Agoda’s Hughes calls the “resource allocation battle” how to prioritize and develop systems to make strategic choices amidst competing demands and the ever-present threat of competitors gaining an edge.
He said, “We have so many things we have to work on. You have to pick and choose the systems and processes you want to work on. To make those choices is really hard, it’s desperately hard. And if you give the competitor a moment, a step forward … We’re terrified of misallocating our resources on one side or the other.”
Having said that, he added, “You never give up, right? This is the beauty of being able to run experiments at scale on large technology platforms – we don’t have to give up. We just got to keep testing and trying and wait for the day when things are ready.”
Vincent Deyro, Veltra: “Knowing the global market and seeing a lot of products coming in, even though we have the advantage here in the Japanese market, I don’t think it will last. We need to prepare for it.”
What happens when you don’t have scale and giants enter
The biggest quandary is thus for smaller or local companies to grapple with – how do you compete without the scale and resource, and the natural DNA to keep testing and trying so that you have an unnatural advantage over your competitors? How do you defend your moat?
During a panel on “The Human-ness of Experiences & Places”, while it was said that the human element was still important in the delivery of experiences on the ground, the panellists agreed there was no denying the competition coming from global OTAs such as Klook and GetYourGuide in the Japanese market. Not only do they want a piece of the inbound market but now they are after the domestic and outbound markets too, a natural advantage for the Japanese-based companies.
Said Vincent Deyro, senior engineering manager at Veltra, Japan’s largest tours and activities marketplace, “We should capitalize on our local knowledge and double down on what we are good at. As a foreigner here in Japan, working for a Japanese company, it’s kind of scary. Knowing the global market and seeing a lot of products coming in, even though we have the advantage here in the Japanese market, I don’t think it will last. We need to prepare for it.”
AI Agent Era can only come true if data silos are integrated, Atsushi Tarai calls for AI protocols in travel
Atsushi Tarai: Travel needs to develop industry-wide AI-to-AI communication protocols that could help integrate fragmented travel data silos, enabling AI agents to collaborate seamlessly.
In another session, Atsushi Tarai, co-founder of positive impact fund, TheEdgeof, which has raised a seed fund of $200m to invest in AI-focused startups, said he strongly believes “that from now on each industry will be totally revolutionized by AI technology”.
Tarai, who was involved in the first wave of AI 30 years ago, when he wrote his master’s thesis on AI applied to industrial robotic design, called this “AI agent era”.
“Each individual will have a personal AI agent who understand my preferences, private information, interests and tastes. I would not be surprised that my AI agent will go to the AI travel agent to discuss the next vacation plan and give me the options to pick and choose, and will recommend the least carbon foot print option. I don’t have enough knowledge to think about the environmental impacts by the travel options but AI agent can do for me.”
However, Tarai, who said it was the first industry-specific conference he had attended, noted that travel faced specific challenges related to data fragmentation and silos, similar to what is faced by other verticals.
His advice? Travel needs to develop “industry-wide AI-to-AI communication protocols that could help integrate fragmented travel data silos, enabling AI agents to collaborate seamlessly” and he said a neutral industry body could make this happen.
“Maybe something like WiT, with your community, could be a starting point,” he said during his interview on stage. “All those fragmented AIs need to talk to each other.”
Only then, could AI be more productive for travellers – “Now I need to ask questions to get answers, so I need to be very creative to get the right answers. A more productive AI could give me the right answers.”
I will let Klook’s Liu have the last word, “No one knows for sure where we’re going to head, when we’re going to be there, but we’re all in this industry together.”