Four stages of understanding the impact of AI on local tour operators
December 16th, 2022by Alex Bainbridge
This sudden and recent interest in AI from mainstream tourism, brought about by Chat GPT in the last few weeks, has been a bit of a sea change event.
I first spoke about the impact of AI on local tourism at World Travel Market London in 2017, ITB Berlin in 2018 and Arival Las Vegas in 2022. At that point in time these presentations were seen as unlikely futurology that was of slight interest, but not really key to daily decisions that conference delegates were making in their businesses.
AI has become a mainstream discussion now, and a topic everyone wants to talk about at conferences on the larger stages. Welcome to the AI club everyone!
The general flow of understanding AI goes:
1 – I hate everything about AI. I don’t accept this is happening, my tours are amazing so won’t be impacted
YES, the stages of grief are real. Even if your tours are not directly impacted, consumer expectation has now changed, and price pressure will be downward…
2 – Oh we can create blog posts with Chat GPT, AI is cool
YES, but now everyone can create blog posts, so whatever you thought you were doing with your blog posts, that won’t work as a strategy now.
3 – Oh we can create tour itineraries with this. Wow I can scale up to 20 cities
YES, but pure LLM AI generated itineraries are a bit rubbish, our sector has specific factual data needs, like availability/opening times, and more basically, are proposed locations nearby to each other so make an itinerary that is practical (spatial awareness) as well as memorable…. This is a short term execution issue. People like me have been working on exactly that problem for a while now. Assume it is solvable, but not by large language models by themselves.
4 – Ok, wow, I hadn’t heard about that, assuming generating great itineraries is solved, and we can create infinite personalised itineraries instantly, how exactly do we operate these experiences? How does generative AI change my operating model?
YES this is the next problem – let me introduce you to Sahra 🙂
- Price goes to zero / near zero – creating downward price pressure for human lead tours where tour guides offer experiences that are candidates for AI operated experiences (not all experiences are candidates, incidentally)
- Likely to hasten the transition to voice first tech – one impact of that is you need to undertake a radical simplification of rate types – in my platform we have a maximum of 4 rate types (Adult / Child etc) because when you are booking voice first, you really don’t want to go through 10 options as a consumer
- New brands join the sector – with digital tour operating, there is no inherent reason why these experiences need to be branded as a local tour operator, rather than say the OTA that sold their flight or the hotel they are staying at
- Personalisation becomes key – do you digitally know your customers preferences? Do you know who has trouble walking long distances? Do you know who is vegan?
- New industry structure – wrote about that before – refer to this blog post
This is moving the industry toward a tech centric industry on the product side. Some people hate that, if you are in that camp fine, you will be like fans of live theatre, right to appreciate how amazing it is, but cinema and then youtube attracted a different clientele at higher volumes.
Both approaches share the same basic skills (e.g. storytelling), and both still exist today, but mainstream transitioned from live theatre to cinema and youtube etc. If you are a top end tour guide, you will be OK for the moment, if you are a mainstream tour guide, Chat GPT is your wakeup call.
This new tech isn’t being built for local tour operators – some is – but most of it isn’t….. so if your immediate reaction is “interesting but I can’t see how to use that in my business”, it is probably your business that has to change rather than the technology.
Image: Stable Diffusion AI
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