It required no sophisticated algorithm to predict that AI would be the dominant topic at last month's Phocuswright Conference, including its transformation of corporate travel management. As Expedia Group CEO Ariane Gorin put it, in what could have been a tagline for the conference: "It's going to be everywhere, and we need to test it everywhere."
Both the winner and runner-up of Phocuswright's Launch competition were AI technologies, also not too surprising given that a good portion of the 11 competitors were showcasing AI technology. The winner was cloud data storage provider Snowflake, which in recent months launched an AI data cloud product specific to travel and hospitality, and AI startup Hightouch, which is working with Snowflake to use that data to help hotel companies on the marketing side. The runner-up and People's Choice winner was startup Mobi.AI, which structures data about hotel properties to enable natural language searches resulting in personalized recommendations that take into consideration not only the hotel but also factors such as dining and transportation options and nearby activities and wildlife.
Mobi VP of product Harriet Brown in an interview with BTN said the technology "gravitates toward leisure use cases." For example, a mom might describe a desired vacation—covering five days of spring break, with a flight that isn't too long and that provides opportunities for ziplining and snorkeling for the kids—to an agent, who can use the tool to search and discover an ideal destination that fits those parameters, she said. However, Brown said there also are corporate travel use cases given the "hard constraints and soft constraints" business travelers often have when selecting a hotel.
"When you travel for business, you have some number of constraints," Brown said. "You're meeting in a certain spot, so you might want to be five to 10 minutes from the meeting, and you may have other things you want to do: You need a place to take someone to dinner, a café to work at. You could say, 'I need a hotel that has all those things.' "
Speaking in a mainstage interview, Madrona Venture Group managing director and Spotnana CEO Steve Singh detailed a bit of his own AI agent under development: Otto, which Singh said would be on the market "in mid-2025 at the latest."
Singh described Otto as "fundamentally a conversational interface that allows you to book travel with an understanding of your context. It's not just your preferences, and all the things that are important to you in travel, but your calendar. We have busy lives, and I want travel to fit within the calendar I have."
Otto at first will focus on unmanaged travel, "which is an underserved market segment, and being able to provide [travel management company]-equivalent services in a largely digital format is a welcome solution within that segment," Singh said. Even as AI agents begin to disintermediate travel booking, as well as offer conversational interfaces for trip disruption and management, Singh said he still sees a role for the travel management company—probably a good thing, since he added TMC Direct Travel to his growing investment empire this year.
"There's always instances where I want to talk to somebody," Singh said. "There's also very complex bookings, where I want to have a conversation and understand the nuances and fine details of what I really want to book. That doesn't mean the TMC won't evolve dramatically."
As part of that evolution, TMCs are "in a technology arms race, whether they realize that or not," Sabre president and CEO Kurt Ekert said at the conference. "The corporate market is going to evolve and change over time and look and feel more like an [online travel agency], with a lot more business logic behind it."
TMCs, meanwhile, will see consolidation, whether that's actual consolidation or "winners and losers," Ekert said.
For Direct Travel specifically, Singh projected that in 10 years, "with the exact same number of travel counselors, we will be able to serve two to three times the number of customers." That service will come across a variety of interfaces, including chat, AI conversational interface, in-app messaging and phone calls.
AI, of course, is only part of the technology transformation that Singh said would enable that efficiency, with Spotnana modernizing the "archaic" system of record. With that, Singh said operations by the end of 2025 would be "at a scale of half of what a traditional TMC cost structure looks like."
Speaking a few weeks later at The Beat Live, Singh further clarified that number came with the estimate that the cost of servicing transactions make up about 25 percent of a TMC's total cost structure, and he believed that could be brought down to 10 to 12 percent. He also emphasized that even after the acquisition, Direct Travel remained its own business separate from Spotnana, and that Spotnana would continue to be open to partnering with any TMC on the market.
Kayak Plays Long Game
Kayak CEO and cofounder Steve Hafner, who has been expanding into the corporate travel space with Kayak for Business, called corporate travel "still a broken product" with "lots of legacy behaviors." With regards to Kayak for Business' Enterprise tool, Hafner echoed what Blockskye co-CEO and cofounder Brook Armstrong said during the BTN Innovate conference in October, that building clients will be a slow process, given the long sales cycles for TMCs and the issue that "a lot of people [in corporate travel don't want to change]."
However, Kayak is in it for the long game, he said.
"It will take us time to actually make an impact on corporate travel," Hafner said. "We have a small team against it, it's profitable and we're adding accounts, and it's a better space for us to grow than going head-to-head against Google."
As an affirmation of its model, Blockskye recently released numbers around disruption management during hurricanes Helene and Milton this year. The company said Kayak for Business travelers on itineraries with Blockskye's Connected Suppliers were able to cancel or rebook travel digitally, without agent assistance, 99.5 percent of the time.
In terms of AI, Hafner said Kayak has a team "rethinking what search could be in an AI world" and said the company would launch something within the next couple of months.
"It's pretty straightforward that searching behavior is going to change, booking behavior is going to change and customer service is for sure going to change," Hafner said. "In five years, it's going to be so natural to use these agents, you're going to say to yourself, 'Why did I ever do it the other way?' "
Specific to corporate travel, however, Singh said legacy technology would remain a stumbling block to AI transformation.
"A whole bunch of the experiences are going to change, and it's very hard for legacy players to drive that level of revolution," Singh said. "You can't drive AI into the application stack by saying it's an add-on. You have to re-architect your entire application stack and say it's actually an AI-native application."
Amadeus president of travel Decius Valmorbida said the broader travel industry is "in a state of evolution, not revolution" with AI, even as it's a time of "gold fever" for AI investment.
"Everyone at this moment has the fear they are going to miss the boat, and they need to invest," he said. "At this stage, it's about productivity, be it the possibility of assisting people in doing their jobs easier or a virtual assistant able to be there."
Valmorbida said industry fragmentation also is always a challenge to overcome. To illustrate, he compared Amazon's investment of about $70 billion in IT to Amadeus' investment of $1.3 billion, which he claimed was "the biggest investor in terms of travel tech." As such, true transformation in travel will require collaboration across the industry.
"It's a very fragmented system, with tens of thousands of travel sellers and thousands of airlines, so how are we going to adopt that technology at the same pace so customers see a differentiated experience?" Valmorbida said. "We would like to deliver the Amazon experience in travel, but that will require collaboration, focusing on the idea that we are building an ecosystem together."