// . //  Insights //  Generative AI Has Intrigued The Most Dedicated Travelers

Leisure travelers have gotten a glimpse of what generative artificial intelligence (AI) can do for them, and they want to see a lot more. Making their debut during the first half of 2023, generative AI travel planning tools — which provide customized destination ideas and itineraries in response to simple natural-language prompts — already are affecting traveler behaviors.

It could be the start of a major change for travel suppliers, whose most valuable customers, their elite loyalty members, have especially embraced the technology. In a survey conducted by Oliver Wyman, 48% of elite airline, hotel, and cruise line loyalty members said they had recently used generative AI tools, and 69% indicated they are likely or very likely to use the technology for future travel inspiration or planning. This compared with 34% and 62%, respectively, of all leisure travelers surveyed.

Exhibit 1: Elite airline, hotel, and cruise line loyalty members are keen to use generative AI
Source: Oliver Wyman August 2023 Generative AI Travel & Leisure survey, Oliver Wyman analysis

These findings highlight a challenge that travel suppliers now face and raise the stakes of the generative AI opportunity. Elite loyalty members are typically high-spending travelers who are more inclined to make supplier-direct bookings. But while many online travel agencies (OTAs) and other technology companies have released generative AI tools, suppliers generally have yet to do so. As a result, travel suppliers without generative AI capabilities may start to lose direct booking share among their most valuable customers or, even worse, risk losing those loyal customers to competing brands who incorporate generative AI capabilities into their own channels.

For suppliers that move quickly in developing generative AI strategies in the near term, though, the forecast is bright. Loyalty programs are a key driver of customer value and favorable economic outcomes. To illustrate, the loyalty programs of the top US airlines (Delta, United, and American) each command valuations of more than $20 billion, according to travel news outlet Skift. In other words: If suppliers create the right generative AI tools, the power of loyalty can help keep their most prized customers satisfied and generate lasting economic value.

Elite loyalty members want generative AI tools and travel suppliers need them

A deeper dive into our survey findings shows just how enthusiastic elite loyalty members are about generative AI. Of the loyalty members who recently used the technology, 86% were satisfied or very satisfied with the quality of the recommendations they received, and 64% booked all or most of them. Given that generative AI is still in its infancy, that is a very strong vote of confidence from a seasoned and knowledgeable customer base.

Exhibit 2: Elite loyalty members who used generative AI were highly satisfied and booked its recommendations
Source: Oliver Wyman August 2023 Generative AI Travel & Leisure survey, Oliver Wyman analysis

Looking ahead, there are more signs that brand.com sites and apps may need generative AI tools to remain competitive: 63% of elite loyalty members said they would select a future booking channel because it has generative AI capabilities, compared with 56% of all loyalty members and 44% of non-members.

Travel suppliers must move aggressively

Suppliers need to capitalize on their loyalty member data, local market knowledge, and other proprietary insights to develop superior tools that provide tailored offerings their loyal customers perceive as valuable. Those that move quickly to develop their strategies, soliciting feedback from their loyalty members along the way, will achieve the biggest wins. Ultimately, they may find themselves at the forefront of an entirely new era of holistic, end-to-end personalization in the world of travel.

Additional contributor: Frank DePinto