Algorithms or agents? There’s room for both in travel

There seems to be two rather different realities presented about human interaction with consumers in the travel industry. We hear that the industry is moving to bots and pure online services, yet simultaneously we are seeing the strong comeback of the travel agent. So which will it be?

NB: This is a viewpoint by Atle Skalleberg, chief digital officer for Flight Centre Travel Group.

The truth is that it is not a zero-sum game. In 2017 and beyond, travel will largely remain as a human-machine hybrid. While bot tech is accelerating, it is still limited by not only by the information it can access but also an inability to respond to complex queries.

Perhaps the introduction of bots is actually fuelling the resurgence of the agent, as the two compliment and learn from each other in a new ecosystem that manifests the best of both worlds.

Technology in the world of complex transactions

Web technologies in travel so far have managed to simplify what was never a simple transaction. But now, emerging intelligent technologies are bridging the gap between human knowledge and data, creating an entirely new customer experience that is fast and convenient, yet curated and personalized via tech-enabled human beings.

A  good percentage of simple transactions have moved away from human travel agents since the first OTAs were established in the mid-90s. According to Phocuswright’s U.S. Online Travel Overview Report, OTA hotel gross bookings have achieved double-digit growth each year since 2013 and made up 46 percent of OTA gross bookings in 2015. OTAs are responsible for 28 percent of all mobile bookings, and the study said that it will increase to 44 percent in 2017.

The piping is there (hundreds of thousands of bookable hotel and flight options) and several players have built excellent booking services that work well for simple transactions with fairly well known itineraries, some degree of destination familiarity and repeat business. This makes all of the sense in the world. The economics are favorable, it scales and it is convenient.

While the role of online bookings in travel is undisputed, it is worth noting that, according to Euromonitor International, only 44 percent of travel sales and bookings are expected to occur online through either desktop or mobile devices during the next five years.

Some so-called simple web-friendly transactions (hotel, flights) will be made offline, but complex transactions and itineraries comprise the bulk of offline activity. What is often lost in travel tech discussions is the fact that travel is often a hugely emotional purchase.

For trips that are higher-stakes (such as getting the honeymoon right), more emotional (first family vacation) and/or unfamiliar (gap years, round the world flights, tours), human beings seek out other human beings.

Human interaction is critical for travelers who do not want to adapt their behaviors to work with machines. It is worth noting that while bots have faced more resistance in North America, to the millions of Chinese travelers who have been working with WeChat and other chatbots for many years, they are already second nature.

We have also seen widespread adoption of bots in Latin America.

Therefore, it is important to consider a travelers’ geography and profile when evaluating the importance of “human touch.”

Lacking the “human touch”

Consumer-facing services will undoubtedly use emerging technologies –  such as bots, machine learning and artificial intelligence – to build the next generation of travel services. But while these technologies are showing a lot of promise we are not expecting them to completely replace the human touch anytime soon. Yes, you can do a lot online, but travelers turn to travel agents for guidance and expertise.

According to MMGY Global, the use of travel agents is at a six-year high. 28 percent of Millennials surveyed said they had consulted a traditional travel agent in the last 12 months — higher than any other age segment — and 30 percent said they plan to do so in the next two years.

Even with the enormous search and ecommerce improvements we have seen in the past decade, travel still remains a very confusing game to a lot of consumers due to hundreds of sites and brands, supplier fragmentation and complex pricing structures.

Adding the human touch means that they have someone to call for help when facing real challenges, during the actual travel experience – a missed connection, a flight cancellation, or during the search – the need to talk to someone that is in the know instead of relying on reviews.

Price also plays a key role – travelers understand that while booking online can be convenient, it is not always cheaper. Travel agents can often access exclusive deals and a wider range of options and they have the experience and knowledge to help travelers on a case-by-case basis.

Truly understanding the emotional aspects of travel and the desires of a traveler takes more than a bit of machine learning. Looking at popular travel patterns the permutations are staggering and we see new trends, such as bleisure (travelers who mix leisure and business travel) making scenarios increasingly complex.

In tech we often talk about a disruptive service needing to be 10x better to become a game-changer. Well, human beings are still 50x better than machines for complex travel shopping.

The human-machine “hybrid”

The massive development in the machine-human hybrid arena will continue in 2017 and beyond. Emerging technologies will continue to reduce the need for human intervention in simple tasks – increasing speed and reducing costs.

For example, we know that rapid improvements to natural language processing will enable amazing user experiences, replacing currently painful processes such as customer service calls and reservation changes.

Human interaction will still be critical in the “last mile” to ensure that travelers are satisfied and have the correct information.  A bot does not have empathy or experiential knowledge and while consumers are tech-dependent they are not always tech savvy. I believe a lot of the next generation jetsetters are actually quite agnostic when it comes to booking channels.

These are truly amazing times – the travel industry will use many of these new technologies to better serve billions of travelers in the decades to come. Many of these travelers will travel for the first time and there are a growing group of travelers who will travel in ways and with budgets that were formerly reserved for explorers and the ultra-wealthy only a few decades ago.

In one of the world’s largest industries and with continued growth in travel markets, we believe consumers will increasingly demand more than booking utilities.

We should not see machine and agent as two mutually exclusive booking alternatives, but rather two key components in the development of any meaningful travel service.

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NB: This is a viewpoint by Atle Skalleberg, chief digital officer for Flight Centre Travel Group. It appears here as part of Tnooz’s sponsored content initiative.

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