In Focus: TMC AI Investments

The entire travel industry is invested in artificial intelligence—financially, technologically even psychologically, it seems. Some of the most intriguing areas of AI development are happening in the itinerary search and discovery phases, understanding traveler intent in natural language conversations and pinpointing personalization opportunities. Much of this work is happening on the consumer side of travel, though some parts—especially the natural language interactions—have gained a foothold in business travel management. For the most part, travel management companies until this point have focused on more foundational work: enhancing workflows, increasing agent productivity, juicing up travel data and reporting capabilities and intervening in airline IROPs, i.e. delays and cancellations. 

This is according to ongoing research from Business Travel News’ media portfolio mate The Beat, which is conducting an analogous survey of travel management companies’ current AI strategies and initiatives as BTN has surveyed the buyers’ side of the business travel equation.

TMCs report that AI, to date, has not been a major differentiator to travel buyers when it comes to competitive bids. Just 9 percent said AI had been positioned as a strong competitive requirement for buyers, although nearly half of TMCs said buyers have expressed a growing interest in their AI-enabled capabilities. About one-third had received limited, but noticeable interest from buyers, while another 9 percent said buyers had not been particularly interested to date in AI-powered technologies or processes at the TMC level. 

Even with what looks like contained enthusiasm on the part of the travel buyer, TMCs have not sat on their laurels when it comes to pursuing AI advances. 

Some of these efforts may not be at the eye-level of the average travel buyer—but that doesn’t mean travel programs won’t benefit from them. More than half of the TMCs surveyed by The Beat said they had focused AI investments on agent productivity tools, using AI-enabled systems to feed travel advisors information on travel options, specific policy points and even personalization tools that allow them to be more efficient and effective with their clients whether they are calling, emailing or chatting into the agency. Even more TMCs plan to invest in this area in the next two years—with some doubling down on productivity investments and other TMCs just getting started on their AI-assisted agent journeys. Likewise, while only 17 percent of TMCs had invested to date in back-office automation, 43 percent said they would be doing so in the next two years—showing that agency operations is looking like a huge opportunity for TMC executives. 

Two major focus areas for AI investment have been among the most forward-facing to the client. 

Half of the agencies surveyed by The Beat have worked to enhance data analytics and reporting with the help of artificial intelligence. This has been happening for years, starting with machine learning capabilities that TMCs began applying to their data processes nearly a decade ago. With generative AI now in play, analytics and reporting capabilities have evolved to another level with natural language queries across vast quantities of data to produce deeper insights more quickly and with high confidence levels. Additional investment in data analytics looks to be limited, with less than 20 percent of queried agencies planning future work in this area.  

Investment in traveler servicing via virtual agents and chatbots is a different story. This has been a critical focal point for 44 percent of agencies so far, and that investment looks like it will be sustained over the next couple of years—and even slightly increased—with 49 percent of surveyed TMCs pushing forward with similar future investments. There are hints throughout respondents’ open commentary, however, that traveler servicing has been a challenge that requires more evolution to realize meaningful gains.  

One TMC executive took a dismissive tone on the subject, claiming “most TMCs and suppliers are stuck in creating one more Q&A chatbot for their traveler[s].” Another said that while servicing and personalization had been hyped in terms of AI, it would take more time and effort to realize “any level of scale or measurable impact.”

TMC Ambitions Awaiting Structural Traction

The business travel industry’s current approach to AI “is best described as ambitious but fragmented,” according to one TMC executive responding to The Beat’s survey. They cited clear momentum and proven value in pockets, but with structural challenges that prevent full agency transformation.

“Fragmented” was a key word across agency leaders, along with “tactical” and “not quite strategic” or with a more positive spin, AI has “optimized on individual steps” but it has not reached a level of orchestration that agencies can visualize but have yet to operationalize in an end-to-end process.

One executive described a dream state for AI:  

"Smart organizations [see] a great opportunity to use AI to transform their operation by integrating services and data into a smart business layer. AI Agents connected to Salesforce, Outlook and the dozens of tools used by travel agents and account managers every day to completely transform how work is done. For example: gather traveler information scattered across from five different systems from a chat interface and perform a price check or profile update from that same interface and finally send an email from that same chat. Another example is automating traveler conversation reviews across phone/chat/email … to identify complaints or issues that, together, indicate a larger emerging challenge. Then, automating a signal to the ops lead and the account manager to manage clients proactively.”

While executives can put the vision together—and they are clearly putting together the budgets—connecting disparate technologies via an AI layer will take more than ChatGPT or Gemini. In most cases it will take a structural rebuild, said one leader:

“Without fully redesigning the end-to-end operational model, the risk is that AI becomes just an additional layer on top of already complex workflows, rather than a true enabler of transformation. In my view, the real value of AI in business travel emerges only when it is embedded within a well-structured operating model. You need clear processes, standardized data and defined service logics (SLA, channels, policy) before AI can scale effectively. Otherwise, you simply automate inefficiencies.”

Is Business Travel Lagging?

One exec claimed “travel generally lags in terms of technology” while others were more upbeat, citing successes across the industry “embedding AI in booking, disruption management, expense processing and policy compliance.” While some of that gestures to capabilities outside the TMC’s remit, it remains evidence that AI has permeated major process areas across the managed travel ecosystem.  

According to the University of Pennsylvania’s Wharton Business School, which for three years has conducted horizontal research across industries on their AI implementations and maturity levels, travel and travel agencies may not be so far behind its peers. What could prove different is how realistic TMC tech executives may be when it comes to understanding the challenges ahead of them. Will that realism discourage innovation or accelerate it through pragmatism? It's too early to tell, but check out this interview with Wharton research co-author Jeremy Korst, to find out how travel businesses measure up to other industry peers when it comes to AI advancement. Korst is also a member of the Wharton executive advisory board and CEO of product and marketing strategy firm GBK Collective.

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BTN thanks The Beat for extending BTN readers preview results of its proprietary AI & Travel Management Companies research. The information in this brief is a segment of the report The Beat will share later this quarter. A paid subscription is required to access content from The Beat.