Isa Maidan recently attended the Phocuswright Conference 2025, where industry leaders and innovators gathered to discuss the future of travel. Unsurprisingly, AI was front of mind, almost all panels and presentations eventually found their way to our algorithmic friends. There was a lot of talk about what artificial intelligence could do, but what are customers doing today, what is coming imminently and what does the future look like?
What is being used today?
More and more customers are using AI to plan their holidays, using it to narrow destination options and plan broad itineraries for a trip. Whilst there isn’t data available on it, there was an agreement that LLMs are clearly part of younger customer decision making around travel. For many businesses, this represents an element of their customers’ journey that isn’t very well understood.
An interesting point to note, when people in the room were asked whether or not they had used AI to research holidays, most hands went up. When asked if they had actually booked the generated suggestion, most went back down. It’s important to take a pragmatic view that as of today, it hasn’t yet dramatically changed the booking process. However, for simpler bookings, the direction of travel is absolutely clear over the longer term.
What is imminent
The big one here: search.
The combination of a highly competitive market and customers’ strong purchase intent at the time of search has meant the travel industry has become highly reliant on PPC. As an investor, a key part of DD for many travel businesses in the last 10 years has been understanding their PPC capabilities and the sustainability of driving traffic through google. This is changing.
AI summaries are leading to fewer clicks and a shift away from Google into LLMs, which is understandably a concern for those who have optimised marketing for Google PPC. Going slightly further down the track, the recent trial and launch of Google AI mode (where search shows very few / no links) has led a lot of people to question what their future marketing spend looks like. More specifically, how do you optimise for a hyper personalised search into an algorithm that you don’t yet understand?
What is evident, is there is a significant opportunity here. Travel websites are complex, so it isn’t easy to transform a site to be optimised for GEO, but those that are agile and able to do so now will see the upside. Search disruption is also not necessarily a bad thing. A single engine dominating traffic has meant CAC often represents a significant portion of many travel businesses’ cost base. Given the general view is LLMs are likely to move to ads, a bit of competition in the search world is no bad thing.
Future
Agentic AI is the clear answer here, the idea being AI can search for, plan and book your perfect holiday based on your historical preferences and specific wants.
This raises significant questions and opportunities for a lot of travel businesses today. What does your business look like if at the extreme we move from a multi- step process today – (plan, search, browse, refine, transact) multiple times across the travel journey, to plan, review, book?
A further consideration that came up multiple times was the interplay between tech and trust. Historically customers have wanted solutions that tech wasn’t capable of delivering. Increasingly with AI it is looking like tech will be delivering solutions before customers trust it. With that in mind, rushing out a sub-optimal solution is not the answer here. Being a brand that is trusted and taking customers on that (improved) journey will be hugely important.
Whilst it’s currently unclear who the ultimate winners and losers are, what is clear is that there will be disruption and therefore opportunity ahead. As an investor, there is renewed focus on travel companies that are offering something that AI can’t easily compete with – high touch, personal, bespoke service and complex travel, where the trust threshold is high. If that isn’t your business model, it’s time to get on the front foot re AI.
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