Leisure travel is on the road to $15T but also the road to disruption - Boston Consulting Group

Boston Consulting Group (BCG) this week put out a new report predicting that “leisure travel” will grow to become a $15T annual business by 2040. That is $5T jump on the 2024 actual figure.

The reasons for the massive spike “are myriad” according to the report. “One is the burgeoning middle class in many emerging markets, eager to travel. Another is the growing emphasis on experiences, rather than things—people are increasingly choosing to spend their money on creating good memories.”

Whilst BCG is predicting that international overnights are going to more than double from 2B to 5B the actual biggest increase in term of $$ is in domestic tourism, mainly in burgeoning economies such as India, China and Saudi Arabia. They predict domestic leisure will rise from $4.1T to $11.7T over that period.

The standout piece of information for mine however was this:

“Looking forward, travelers will move beyond dedicated LLM search chatbots into social media environments like Instagram and Facebook. Here, travelers enter an imagination and inspiration phase. Leveraging social interactions, likes, and viewed content, AI-powered travel agents can proactively suggest and facilitate travel bookings directly within the social platforms. This contextually enriched browsing experience relies on extensive user behavior data, transforming casual browsing into a highly personalized, seamless booking journey and fundamentally disrupting current travel discovery and booking paradigms.”

This is exactly the big bet we are taking on at Videreo. An army of travel content creators bring the traveller through the door and then hand off to the AI agent to take the guest through the rest of the journey, occasionally handing off to the best qualified human for the most complex and high stakes bookings such as luxury.

According to BCG, the TAM here is $15T.

Is that a big enough bet?

The ball is already in the air. Videreo is taking a swing.

Videreo is the place for brands and creators to meet & create a new sales pipeline together.

Contact Adrian for more details on how to get your travel product prepared for the future that is happening right now.

This content is provided by the (interim) newsletter sponsor Videreo.com

AI takes over deciding who gets an upgrade at Marriott (maybe)

According to this article in View from the Wing, on July 14, AI will become the sole decision maker on who is getting an upgrade at Marriott hotels.

“We learned a couple of weeks ago that Marriott will take away room assignment and elite upgrades from the front desk and turn it over to AI.” read the article.

Whilst there has been no official announcement from the company itself, the scoop came from a Reddit post “by someone who frequently posts from the perspective of a knowledgeable employee at a Marriott property.”

According to the article, currently Marriott sends the hotel a daily list of guests who could be eligible for a room upgrade (Marriott Bonvoy Gold and higher-tier Elite members). Now the AI will auto-assign the rooms to these guests saving on this task workload and time spent manually allocating these rooms.

This of course makes sense from an operational efficiency POV and the majority of customers I’m sure would prefer these allocations to made purely on merit and not other subjective inferences. Those on the cusp but great at working the desk to get the upgrade would be the only losers here.

The downside is “surprise and delight” is abolished.

Be interesting to see if this comes to fruition and if Marriott themselves decide to announce the change.

Is Priceline the home of AI R&D for Booking Holdings?

A few different articles emerged this week that point to the case that whilst everyone is staring intently at Booking for big moves, they might be better served by keeping an eye on Priceline.

A LinkedIn post from Skift Founder, Rafat Ali was one to surface this opinion.

“But here’s what’s surprising if you know where to look: Priceline is hiring four major roles to build out Penny, its AI travel assistant most people haven’t even heard of.”

So why Priceline you ask?

According to Ali the rationale here is: “Because maybe being the underdog gives it room to experiment. By incubating a stand-alone AI concierge in the (lighter-regulation) U.S. market, Priceline can iterate fast and quietly ship innovations that may later flow upstream to its bigger Dutch sibling.”

Timely then that another post emerged directly from the horses mouth. Smartbrief interviewed Priceline CEO Brett Keller on exactly this topic. 

Keller is taking the emergence of AI extremely seriously. “After 25+ years in travel, I see AI as the third seismic shift in how the industry operates.”

And it seems Keller agrees with BCG’s assessment of the new world. “AI has the potential to significantly disrupt how a customer moves through the travel planning and booking experience.”

My biggest takeaway from the interview was not the stuff about personalisation or their Chatbot “Penny” but this nugget: “We’ve also deployed these tools across our entire organization—not just to developers—and even have quarterly genAI people goals for every employee.” (Emphasis is mine here).

I think at this point in the transition, this is how you become the leader, not the follower. Every company of any size should be doing this because the best already are. This is advice I’ve been giving in consulting gigs and to boards for over 18 months now. (Listen to the podcast we did with Travis Pittman of TourRadar where we went deeper on this topic if looking for some free advice on how to implement this).

In other news, Booking.com cut 900 jobs. Potentially demonstrating where their initial AI focus might be.

Musician schools the travel industry on AI

A musician might seem like an odd choice for the keynote speaker at a Travel Technology conference, but I think it is an inspired choice. At the TravelTech Conference in London this week, musician LJ Rich took the stage to talk about AI and travel.

Breaking Travel News grabbed an interview just prior to get the early scoop on the thoughts of Rich who is also one of the hosts of the BBC’s Click program.

Not only does Rich bring a little bit of celebrity, turns out she is an ideal customer profile. “Part of leading a production team at the BBC involved booking complex and costly travel plans. The team would take turns transporting 8 people plus kit to various parts of the world from Boston to Bangalore. I’d go further, researching where to eat and stay as much as the stories we’d cover.”

Frequent. Group. Complex.

Rich tells us “Once everything was booked, I’d create a ‘call sheet’ with lots of info - from rendezvous times & places (you can find me at the best coffee in the airport 3 hours early) to logistics like booking references, flight times, directions to where we’d stay. I’d go further - nearest hospitals, helpful numbers, other contingencies.”

The real scoop in the article: “I would definitely love an AI-enabled Call Sheet for both business and domestic trips!”

Between Inspiration and Travel is a very messy middle for pretty much every single traveller. Those who use travel advisors, outsource this mess. Those who build ‘trip planners’ speed past it like every decision doesn’t require any consideration. AI speaks with confidence helping to reinforce this illusion.

In the end, most still head off with notes on their phone, a few bookings in their emails and maybe a google sheet for the more organised.

LJ is telling us what people actually want.

Floodgates are opening on AI video in travel

A week after reporting on the fab Linz Tourism video, we have two new contenders just a week later.

Klook this week dropped their new series of AI created videos. Their concept revolves around a travelling goose. Targeted to the Hong Kong market “With 'goose' and 'me' sounding alike in Cantonese, the character becomes a deeply local and personal symbol. Klook believes life shouldn’t be limited to daily routine; it should be filled with moments to break free and explore, just like the goose.”

Duffy Lau from the agency Grey who Klook partnered with on the campaign tells us “Inspired by the old tale of the Ugly Duckling, the campaign is about how a journey can help you find your place in the world — not by fitting in, but by following your own path,”

But you don’t need to be some giant company to leverage AI to produce video content as Scottish tour company Heartland Travel proved this week.

Their concept was to get famous characters from Scottish history to welcome their guests to come and explore.

“Imagine Robert the Bruce or Mary Queen of Scots stepping out of the history books to personally invite you on a grand tour of their beloved homeland.”

Leveraging the new Veo3 from Google a company spokesperson explained “"As a small business, we could never produce content like this, and as real as it is, AI is a game changer for our little tour business,"

Both these efforts continue to show the playbook for AI video. Come up with a concept based not in reality - geese don’t go backpacking, Bonnie Prince Charles is not live on camera - but such that can tell your story in a unique way that can resonate with your ideal customer.

Expect a lot more of this.

Mindtrip releases app for when you are on the trip

Mindtrip this week dropped their new iOS app which is marketed as an “on trip” companion.

CEO Andy Moss said “No longer do you have to do extensive research before visiting a destination…. With our new app, we're offering an entirely new on-trip experience and we can't wait to see how travelers of all ages take advantage of it in the wild."

The timing is great for me! I am looking for the silver bullet to finding gluten free, vegetarian friendly eateries right across the Balkans for our family holiday to be a ‘hangry’ free zone!

Cmon Mindtrip - I’m rooting for you (for me)!!

If you think someone (or everyone) you know or work with could grow from being more informed on the topic of ai + travel (or could use the training above) then please forward this email to them and they can click the button below:

Marketplace Spotlight: MyTrip.ai

MyTrip.AI provides generative AI tools and services ranging from free, easy to use writing tools, to advanced high quality, high volume AI content creation services, to AI Assistants who assume different roles and assume different tasks in your travel company.

Their flagship service is a custom made AI Sales and Service Assistant that greets your users on your website or Whatsapp, helps them plan their trip using your website contents and sales process and works together with your sales and service team.

If you have a B2B business underpinned by AI and looking for people to notice you, you can sign up to the marketplace for peanuts (top right corner, 5 mins, bring your logo).

I’ve priced for bootstrapped startups but also accepting larger companies too.

Who will guide us?

In Alex Bainbridge’s Cyborguide this week, he asks whether future us is more likely to be guided around by our AI Boyfriend or say, the City of Dublin’s AI guide, Brendan?

Behind this (somewhat weird) grouping of choices, is the question of whether we have our all purpose and all knowing AI that we rely on for everything or if we need these specialist AI’s for specialist tasks?

Does Brendan know more than our general AI? Could Dublin City Council have access to data that is not otherwise available? Could our generalist AI download Brendan and go through every possible question they know their human wants answered and then relay that back - or just do it on the fly to look smart and ask and answer in the moment.

Will our personal AI put on a charming Irish accent? Are Irish accents hard to understand? Is that a feature or bug?

Or should we just hire a Mercedes and drive around asking our questions and getting the car to answer?

Slack Group!

Shorts

Every week a lot of stuff is left on the cutting room floor. I thought maybe I’ll just lest those here for anyone interested in digging more:

• This report on AI and the environment shouldn’t really be a short - but let’s face it, as a species we’ve pretty much given up on the environment beyond lip service.

Podcasts and Sponsors

Podcasts now on Spotify and Apple Podcasts:

New podcasts are now showing up on Spotify and Apple Podcasts for your easy listening pleasure!

Also check out the Agentic Whitepaper for tourism that our episode with Gam Dias was based on

This week we caught up with Jason Cincotta from Kismet on making agentic bookings in the hotel industry a reality.

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Most clicked last week was the link to the Linz Tourism AI video. Actually, it is the most clicked article ever in this newsletter’s history.

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