Artificial intelligence (AI) is making inroads into the travel industry as most consumers now expect seamless travel experiences, and the industry is taking notice.
Kayak CEO Steve Hafner told PYMNTS that the company plans to launch AI agents this year to help travelers with everything from trip searching to checkout.
"One thing Kayak hasn't done as well as search is booking," Hafner said. "We've had to hand people off to airline or hotel websites or online travel agencies to complete the booking.
"With agentic AI, we can actually facilitate that without the consumer ever having to leave the Kayak experience," he added.
AI agents are bots that not just provide information or do single tasks, like AI chatbots, but complete multistep tasks for the user. That means that while ChatGPT can plan a vacation itinerary for the user, an AI agent can actually make reservations and pay for travel.
Will consumers be comfortable giving that much power to AI agents?
"Agentic AI, like humans, makes mistakes. We want humans to ... oversee that and be responsible for them," Hafner said. "So at every step of the way, we tell them what we're working on and what we're doing, and they can take control of the process if they want to - and certainly before any payment gets submitted. They have to OK that."
In fact, PYMNTS data shows more consumers expect generative AI to help with their travel planning and experiences. So it comes as no surprise that the industry is listening.
Right now, Hafner said, Kayak is playing around with OpenAI's 'Operator' AI agent, which can look at a webpage as well as type, click, scroll, fill out forms and do tasks like order groceries that humans would do online. He said Kayak is looking at Perplexity's tools too.
Hafner said that Kayak is not focused on providing travel experiences, such as customized outings like flying to another city to attend a Taylor Swift concert. "A lot of other companies are doing that pretty well, so I don't think that's in our DNA," he said, adding that it may be a possibility later on.
While Kayak focuses on AI agents, other companies in the sector are taking a different approach.
Sabre, one of largest global distribution system providers that connects travel suppliers (airlines, hotels) with travel buyers (companies, travel agencies), uses AI differently.
Richard Ratliff, executive scientist at Sabre, told PYMNTS that its AI powers smarter decision-making, better personalization, and more efficient operations across airlines, hotels and travel agencies.
Sabre focuses on three key principles: data-driven intelligence, openness and modularity. "AI learns from real-time booking behaviors, integrates seamlessly with existing travel systems, and allows companies to adopt only the solutions they need," Ratliff said.
One of the biggest challenges in travel is that airlines, hotels and agencies all run on different systems, leading to inconsistent pricing and a fragmented booking experience, Ratliff added. Sabre's AI-powered tools help bridge these gaps by making pricing more consistent and offers more personalized.
An AI-powered marketplace connects airline content, low-cost carriers, hotel inventory, car rentals and rail bookings into a single platform, Ratliff said. Instead of travel agents manually sorting through different sources, AI can help find preferred flights and hotels, personalize offers, and optimize content delivery, freeing agents to focus on service.
Ratliff cited the company's SabreMosaic, an AI-driven platform that lets airlines and hotels maximize revenue while improving the travel experience; Air Price IQ that adjusts airfare pricing in real time; Ancillary IQ that prices extras like baggage and seat selection; and Upgrade IQ that enables travelers to bid for premium seats at "optimal" prices, Ratliff said.
Other AI capabilities Sabre is using include predicting potential disruptions, like weather-related travel delays, so airlines and agencies can offer alternatives proactively. It is also using AI for payment solutions to streamline transactions, reduce fraud and speed up processing times, since a single booking can involve several banks, currencies, tax rules and security checks. AI ensures that payments are secure, compliant and efficient.
For example, when searching for standard economy flights between two cities, travelers often see multiple options with sometimes big price differences. That's because one option might include seat assignments, bag check and Wi-Fi, and the cheaper option does not.
Travelport's technology would compare apples-to-apples. Let's say an airfare between Miami and Los Angeles costs $497 but includes seats, bags and Wi-Fi for no additional fees. A cheaper alternative airfare costs $395 but without any extras. Travelport's search engine would show how much the cheaper airfare would cost if including fees for seats, bags and Wi-Fi.
Earlier this month, Tripadvisor announced that it is partnering with Perplexity AI to enhance the way travelers plan their trips.
The three-year alliance would integrate Tripadvisor's repository of 1 billion reviews, AI-generated summaries, and Viator's catalog of more than 300,000 travel experiences with Perplexity's advanced search capabilities.
The goal is to provide users with faster, more direct, and personalized recommendations, thereby simplifying trip planning through AI-driven insights, according to Tripadvisor. The partnership also leverages Tripadvisor's reach across 43 markets and 22 languages.
The feature is already on Perplexity.ai and will soon come to mobile apps, the companies said.
Airbnb is taking a different approach on AI, according to CEO Brian Chesky said during the company's earnings call earlier this month.
AI will first be used for customer support before expanding to other use cases. "AI can do an incredible job of customer service, can speak every language, 24/7, they can read ... thousands of pages of documents," he said. As for travel planning, "I don't think it's quite ready for prime time."
But over the coming years, that customer service AI agent will be added to search and eventually become a "travel and living concierge," Chesky said.
Last October, Booking.com said it expanded its suite of generative AI tools with Smart Filter, Property Q&A and Review Summaries. These tools will help travelers find lodging, analyze guest reviews and book reservations. These three tools expand upon Booking.com's AI Trip Planner, unveiled in 2023, which creates a personalized itinerary for travelers. (Booking.com is the sister company of Kayak. Both are owned by Booking Holdings.)
Expedia also is on the AI bandwagon. Last year, it introduced Romie, a travel AI assistant that can help plan, shop, book and support travelers. It learns from the traveler's experiences and preferences. and Expedia also unveiled a personalized trip planner that uses AI to provide custom recommendations, discover and compare destinations, summarize guest reviews, and others.
But Expedia also warned against the faults of generative AI, which can be "expensive to deploy, has a higher computation time, and runs the risk of hallucinations," the company said in a blog post. "There are plenty of experiences where traditional AI (such as predictive analytics) can better achieve the desired business and user goals," the authors said.
