The rumors about the end of the OTAs at the hands of AI are highly exaggerated
A recent article in Platform Aeronaut titled ChatGPT Advanced Voice: The Future of Travel Booking or the End of OTAs? (read related article)
suggested that the latest reiteration of this genAI application would be the ultimate OTA killer.
See a link to the actual article in the first comment.
Here is my take.
Let’s start with two simple questions:
1. Who were the first adopters of genAI like ChatGPT? Not the global airlines, major hotel chains like Marriott, or mega cruise lines like Carnival Cruises. In the travel industry, the OTAs were the first and only adopters for a while. The OTAs will be the first to adopt any future AI-related innovations, way ahead of travel services providers that are moving with a snail speed.
2. Where from and how would any general AI or generative AI platform or application get access to ARI (availability, rates and inventory) i.e. bookable in real time travel inventory? The travel industry uses a spaghetti-like maze of cloud, legacy and on-prem inventory, rate management and distribution technologies that take a PhD to even comprehend. It took the OTAs three decades to build their CRS platforms with APIs to 2.5 million multi room accommodation establishments, 6 million vacation rentals, 600 airlines, 350,000 local experiences, etc.
This is why all travel itineraries suggested by ChatGPT are powered by …OTAs like Expedia.
Generative AI will democratize the industry, no doubt about it. But so did the Internet. Social media. Mobile technology, etc. Here the question is: who can take advantage of this democratization? Companies who can invest in talent and technology. Guess who these are at the end of the day? The small tour operator? Travel agency? Vacation rental host? Independent hotel? Nah, the the big kahunas like Booking, Expedia, Viator, GetYourGuide or Airbnb, followed by the big travel suppliers like airlines, hotel chains, cruise lines, car rental companies.
Unfortunately, ChatGPT will not liberate the industry from the yoke of the OTAs
,
on the contrary, it will cement their dominance. AI and particularly
genAI will make search faster, search results more precise, search
content more enticing and meaningful, but the actual underlying ARI
(availability, rates and inventory) feeds and booking will be provided
by the OTAs. In this sense genAI platforms like ChatGPT will be mere
affiliates of the OTAs.
