Low cost and service led, smart travel assistants pose a threat and an opportunity. In part 2, Roland Berger consultants outline why

Smart travel assistants such as OkRoger, Fineway and Claire provide customers access to easy-to-use travel planning, booking and management capabilities at a comparatively low price. They combine the benefits of the online travel agents (OTAs) and metasearch engines, namely simplicity, speed and availability, with the reliability and management of professional travel planners. The combination of high service levels and low price, achieved by state-of-the-art AI systems, data-gathering capabilities and customer interfaces, makes them very attractive.

If you missed Part 1, here is the link Smart travel assistants: the new gateway for travel?

It is worth noting, however, that the companies behind smart travel assistants still employ human experts to provide additional services if required. According to Felicia Schneiderhan, Co-Founder, 30SecondsToFly, “a mixture of AI automation and human agents is ideal to achieve highest traveller satisfaction results”.

Takeaways for incumbents

Smart travel assistants will function as potential partners for inventory providers. They seek to offer a broad range of options to their customers, which providers of inventory want sold to travellers. The offering is therefore of mutual benefit to both parties. However, inventory providers should be aware that automated selection via artificial intelligence might reduce their visibility to customers and may pose potential challenges regarding competitive positioning. Therefore, in order to be ‘Smart Travel Assistant Ready’ inventory providers should ask the following four questions, illustrated with selected examples of business flights and hostel stays:

However, intermediaries will find it more difficult to deal with smart travel assistants than inventory providers. This is because smart assistants could be perceived as competitors, partners or both. The perception depends on the threat, which arises from the respective business model. Companies such as 30SecondsToFly will offer the technology and support to incumbents while simultaneously operating their own smart travel assistant; other companies, though, will strictly compete. Intermediaries must therefore understand which changes are necessary to their own offerings in order to stay relevant in the new sales and distribution ecosystem. For example, we expect that individual travel planners will increase their service level even further and differentiate with a ‘human touch’. Global distribution system providers, however, must enhance their capabilities to distribute ancillaries and specialised inventory in order to provide an individualised inventory for smart assistants.

The bottom line for incumbents

Smart Travel Assistants will compete for ownership of the customer touchpoint. Therefore, inventory providers must track and evaluate how their sales channel mix will shift. Furthermore, due to the personalisation capabilities of smart travel assistants, auxiliary offerings will gain importance. However, since some customers are expected to oppose the use of automated travel planners and machine interfaces, self-service offerings and human travel planners are likely to survive. Nevertheless, their good benefit-cost ratio makes smart travel assistants a significant threat to intermediaries. Providers of smart assistants are expected to enter the market by targeting business and high-value leisure travelers and subsequently cater to the mass tourism market.

Markus Bohl, Co-Founder, Fineway, says: "From a customer perspective there is a huge need to further personalise and improve the smartness of the travel planning and booking processes."

Easy, smart and proactive travel booking is a key selling point, something that Roger offers. It uses real data and AI to save organisations time and money.

As such, smart travel assistants will grow into a new gateway for travel due to their superior cost-benefit ratio. Even though the pace of this development cannot be foreseen, incumbents need to adapt their own capabilities accordingly. However, smart travel assistants will not replace all other intermediaries such as OTAs, metasearch engines and professional travel planners.

Recent decades have shown that new players in travel distribution rarely replace pre-existing players. Even when smart travel assistants have perfected their services, many travellers will still want to plan, book, and manage journeys on their own. Other customers will resist interacting with automated interfaces and prefer to speak to human beings via phone or face to face. Additionally, incumbents will further incorporate processes and technologies of smart assistants, eg. voice and chat integration. The capability to offer easy, smart and proactive travel booking will be a key selling point in the future. The time to build this service is now.

This guest post is by Roland Berger consultants Joerg Esser, Rafael Geisler and Stephan Hundertmark. Esser, who spent over 10 years in the travel industry in various roles at Thomas Cook, will be moderating a session at the upcoming EyeforTravel Digital Strategy Summit (May 21-22)