At the recent AITO conference, I was asked the intriguing question of “Which Travel Sector is most threatened by the rollout of AI?”
Honestly, it’s easier to flip this question and look at what protections the travel industry has against AI. For example, “Asset” holders like airlines, cruise lines, and hotels aren’t threatened just because customers will always need them, and they can’t be “disintermediated”. Therefore, companies such as Tui, Easyjet, and Jet2 Holidays are likely to see AI as a way to improve efficiency and will use it to open new distribution routes.
However, “Online Travel Agents” (OTAs) face two significant and imminent threats.
Over the past 20 years, Google has dominated holiday search, and its algorithms, which reward higher click volumes with lower average costs, have established a fairly “locked-in” hierarchy primarily shared among Love Holidays, On the Beach, and booking.com for most holiday search terms. This is now being seriously disrupted by the introduction of Google AI search mode powered by Gemini, which has taken 30-40% of the traffic that used to flow to the top-positioned advertisers and redistributed it in a completely different way based on the best match to a customer’s request.
This trend is only going to be exacerbated as competing AI search tools such as ChatGPT and Perplexity rapidly increase their market share in the UK.
At the same time, Gemini and the other LLM (Large Language Model) search engines are all launching “Agentic AI” solutions for travel. These enable customers to either type or use voice activation to make complex, detailed travel requests, which then open new windows with the “Agentic AI Agent,” which mimics a human and uses relevant travel sites like Skyscanner to identify the best flight options before combining them with hotel options from booking.com.
This new age “Dynamic Packaging” avoids the extensive costs and restrictions of ATOL bonding and therefore offers customers lower cost options, threatening to undermine the OTA’s core offering of range and lowest price.
Some customers will still seek “Principal Status” and ATOL protection, but I doubt this will be the majority, which puts Love and OTB’s market share at real risk. However, nobody should ever dismiss this innovative business, as they could simply pivot to using AI to develop their offering while leveraging their established brand recognition.
Travel Agents also face a significant threat, but ironically, it’s not from being replaced by AI but from more agents joining the hunt for customers and “Super Agents” hoovering up a much larger share of the market.
We have already seen 37,000 agents join the sector under the umbrella of “IntelleTravel”, but this figure is set to rise dramatically as “Agentic AI” tools mean nearly anyone can book travel with minimal training. Add to this the extensive product knowledge available at their fingertips from AI tools, and the “Agency” battle shifts to how cost-effectively agents can attract customers and on what scale.
I believe there will be a new wave of “Influencer agents” using TikTok, Instagram, and Facebook to promote inspiring destination content, generating leads that they then either pass on to third-party price-comparison sites or book themselves using agentic AI tools.
Even within traditional homeworking channels, top sellers can grow even faster by delegating all their back-office booking and research tasks to AI, while using their freed-up time to leverage their human sales skills to handle 2-3 times more customers per year. These “Super Agents” will logically gain increased market share, forcing weaker agents to go part-time or leave the sector.
It will also be fascinating to see what new travel brands are created using the new “Model Context Protocol” (MCP) technology. MCP is a simple standardisation wrapper that LLMs are forcing suppliers to put around their API feeds to turn them into “Standardised Bricks” accessible by AI coding teams to create new “Travel Super Stores”.
Using MCP tools from suppliers significantly simplifies the creation of price-comparison sites and innovative packaging tools, such as “Event Trip,” a new spin-out soon to be launched by Neural River Incubator.
The established travel order is set for a significant shake-up, not in the next 10 years as some commentators predict, but rather within the next 2 years, in my opinion, as the wave of AI change is now accelerating rapidly, with even the slow-moving travel sector beginning to engage first gear.