Generative AI Revolutionizes Summer Travel Planning, New Oliver Wyman Report Says

Rhea-AI Summary

Generative AI is revolutionizing summer travel planning, according to a new report from Oliver Wyman, a business of Marsh McLennan (NYSE: MMC). The report reveals that 41% of Americans and Canadians have used generative AI for trip inspiration or itinerary planning, up from 34% in August 2023.

Online travel agencies (OTAs) could potentially increase their share of the US online travel market by up to 17 percentage points by 2029 if travel suppliers do not invest in generative AI. This could result in OTAs earning over $2 billion in additional commissions.

Key findings include that 82% of travelers who used generative AI for planning are likely to use it again, with high satisfaction rates. Generative AI is particularly favored by younger travelers under 45 (59%) but also used by 31% of those 45 and older. Additionally, over 90% of users booked travel plans suggested by AI, including specific activities and dining options.

Positive

• 41% of surveyed Americans and Canadians used generative AI for trip planning, up from 34% in August 2023.
• OTAs could increase their booking share of the US online travel market by 17 percentage points by 2029.
• OTAs may gain over $2 billion in incremental commissions from suppliers by leveraging generative AI.
• 82% of travelers who used generative AI are likely to use it again in the future.
• High satisfaction rates with AI-generated travel plans, with over 90% booking suggested activities and dining options.
• 59% of travelers under 45 are using generative AI, showing strong adoption among younger demographics.
• Loyalty members have shown a strong affinity for generative AI, with 45% of elite members using it recently.

Negative

• Travel brands are slow to develop customer-facing generative AI tools, missing opportunities to boost customer loyalty and direct bookings.
• Only 31% of travelers aged 45 and older are utilizing generative AI for travel planning, indicating lower adoption rates among older demographics.

NEW YORK, May 24, 2024 /PRNewswire/ -- Generative artificial intelligence (AI) has rapidly gained traction in leisure travel transforming the way consumers approach vacation planning just in time for summer, according to a new report from consulting firm Oliver Wyman, a business of Marsh McLennan (NYSE: MMC).

The report, titled, Why Generative AI Is a Game Changer for Leisure Travel found that 41% of Americans and Canadians surveyed have used generative AI for either trip inspiration or itinerary planning, an increase from 34% in August 2023. Oliver Wyman's analysis found that online travel agencies (OTAs) could increase their booking share of the US online travel market by up to 17 percentage points by 2029 if travel suppliers continue to forgo investment in generative AI capabilities. This potential shift could result in OTAs reaping an incremental $2 billion-plus in commissions from suppliers.

"Consumers are avoiding two major pain points when using generative AI for travel planning-- information overload and the time spent navigating multiple sources for inspiration and planning for travel that meets their needs," said Lawrence Burka, a principal in Oliver Wyman's Transportation and Services and Pricing, Sales, and Marketing practices. "However, travel brands have been relatively slow in developing customer-facing generative AI tools. This presents a missed opportunity for travel brands to enhance customer loyalty, incentivize direct bookings, and offer personalized recommendations to expand itineraries."

Additional key findings from the report include:

• Happy Travelers – For travelers who used generative AI tools, 82% are likely to use it again to make travel plans in the future. Generative AI has particularly resonated with younger travelers, with 59% of those under 45 years old utilizing these tools for travel planning. However, 31% of travelers 45 years old and older are also using it. Additionally, over three-quarters of consumers are happy with the travel recommendations provided by generative AI tools, with high conversion rates for booking the AI suggested trip option.
  
  
• Amenities and Add Ons – Of the more than 90% of recent users who booked generative AI-produced travel plans, many followed through with booking specific activities (44%) and dining suggestions (43%) recommended by the tool.
  
  
• Loyalty -- Loyalty members of travel brands have shown a strong affinity for generative AI, with 45% of elite loyalty members using generative AI recently to plan trips. The survey also revealed that generative AI is popular among those who take cruises, with 54% of respondents who had taken at least one cruise since 2022 recently using generative AI for travel planning.

About the survey 
The survey was conducted among nearly 2,100 consumers in the United States and Canada in March of 2024. To qualify for the survey, respondents had to have booked a roundtrip flight or lodging stay for leisure purposes since the beginning of 2023, or a cruise for leisure purposes since the beginning of 2022.

About Oliver Wyman 
Oliver Wyman is a global leader in management consulting. With offices in more than 70 cities across 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has 7,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh McLennan [NYSE: MMC]. For more information, visit www.oliverwyman.com.Follow Oliver Wyman on X @OliverWyman

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SOURCE Oliver Wyman

FAQ

How many Americans and Canadians are using generative AI for trip planning?

41% of Americans and Canadians have used generative AI for trip inspiration or itinerary planning.

What is the potential market share increase for OTAs due to generative AI by 2029?

OTAs could increase their booking share of the US online travel market by up to 17 percentage points by 2029.

How much additional commission could OTAs earn from generative AI by 2029?

OTAs could earn over $2 billion in incremental commissions from suppliers by leveraging generative AI.

What percentage of travelers plan to use generative AI for future travel planning?

82% of travelers who used generative AI for planning are likely to use it again.

How satisfied are consumers with generative AI travel recommendations?

Over three-quarters of consumers are happy with the travel recommendations provided by generative AI tools.

What percentage of young travelers under 45 are using generative AI?

59% of travelers under 45 are using generative AI for travel planning.

Are loyalty members inclined to use generative AI for travel planning?

Yes, 45% of elite loyalty members have recently used generative AI to plan trips.