The divide between big and small – will it grow bigger in age of AI?

After 19 years with Expedia Group, sporting a new role as chief commercial officer and president of travel partners and media since February and relocating from the US to London, Greg Schulze, speaking at Phocuswright Europe, said “it feels new again”.

Indeed, you could say everything feels new again in the world of digital travel. At the event in Barcelona earlier this month, discussions ranged from new tech like Generative AI that’s sweeping through the industry to concepts such as digital identity actually taking hold and being executed in parts; new (or renewed) pressures being put on tourism authorities to even out the overcrowding around hotspots; and new players entering travel, enabled by improved and enhanced B2B technology.

Greg Schulze: “Our priority is to grow in Europe and Asia.”

In Expedia Group’s case, Schulze was referring to the fact that for the last several years, the group has been focused on retooling and realigning its internal systems, centralising capabilities to simplify operations and reduce duplication among its multiple brands – and now under the leadership of new CEO Ariane Gorin, it is turning its attention outward again.

“It’s really back to growth,” stressed Schulze, who said he was looking forward to being abroad again, after spending five years in Singapore pre-pandemic. “Ariane, after 25 years in Europe, is moving to Seattle,” he added, noting, “Our priority is to grow in Europe and Asia. In Asia, we had a joint venture with AirAsia, we invested in Traveloka. The ambition is there, it’s not so much about expansion but a growth strategy, a more focused approach.”

For example, “finding the personality” of its three core brands – Expedia, Hotels.com and Vrbo – “it can’t be different country to country,” said Schulze, and focus on growing Vrbo. “All the tech work we did to bring Vrbo into Expedia Group platform will benefit and making that supply available to Hotels.com and Expedia, that will benefit too.”

Then there’s its loyalty programme, One Key, linked across its three primary brands – Expedia, Hotels.com and Vrbo – after the completion of the migration and consolidation of its tech stack in 2023.

Schulze said the company is seeing a positive impact on Vrbo, with 25-30% of those booking a rental using their “One Key cash” being first-time users of Vrbo. One Key now has 100 million active members in the US and will launch in the UK soon, with plans to roll out across other markets as well.

“We’ve just begun, there are good early signs,” he said.

He also said Expedia has “every opportunity” to be a leader in the experiences and activities sector. “Everything we know about the traveller and the connection that we have with them through the app, we definitely should be the leader in activities, and we’re not,” he said. “We’re big and it’s a growing business for us, but as we do more to integrate that I think it’s a great opportunity.”

He said it was testing certain things – such as allowing travellers to build their own packages, rather than buying through tour operators, airport transfers, as well as supplying hotels to tour operators. “We have the best supply,” he said, adding that its B2B business sold 100m room nights in 2023.

And of course, it is testing its new Romie app, adding it to WhatsApp group chats. Schulze, who referred to his earlier career as a data analyst 25 years ago, said, “It’s about what data you have and how do you use it? I tested it with my wife on this trip. It collects all the information, makes recommendations, has access to Expedia and is bookable there.

“There’s a lot going on behind the scenes, rather than the flashy consumer stuff.”

Adrian Lopez (left) and Rob Francis on stage with Phocuswire’s Mitra Sorrells: “It’s easier to see the magnitude of this moment.”

For giants like Booking and Flight Centre, investing in AI is a “long game”

And indeed, that was the key message that came across at Phocuswright Europe – that more AI work is going on behind the scenes than can be seen outwardly and it being a long term play, means that giants, with scale, data and resources, can invest more in it than smaller companies, who have to balance between immediate cash flow needs and long term investments.

In an earlier panel, tech leaders from Booking.com and Flight Centre Travel Group spoke about the work going on behind the scenes and when asked about how they were measuring success of their AI initiatives, said that, for them, it was not about immediate return on investment but a long term play.

Of its AI trip planner for example, Rob Francis, SVP & Chief Technology Officer, of Booking.com said, “We’re not holding teams to any metrics. We are searching for the things that customers enjoy and let customers rate the quality. It’s a long game. For internal productivity, we have more specific KPIs – code generation, engineering hours saved.”

Adrian Lopez, head of AI for Corporate at Flight Centre Travel Group, said that with SAM, the group’s AI assistant for travellers, “the interactive tools are easier to measure. We can say that by doing this task with AI, we can save 20% but we don’t want our AI centre to be a cost centre. It’s linked to productivity, costs and hours saved.”

Francis said with the Trip Planner launched in the US, UK and New Zealand, Booking was trying to “optimise the actual understanding of the intent. The better we understand intent, the better we can get them straight to conversions. We see such potential – but we have to work on things like moderation, toxicity, data protection before we can turn it on.”

He also noted that trip planning is only one aspect of AI. “There’s more to come,” he promised.

Lopez, who founded SAM which was acquired by Flight Centre in March 2019, said, “People are now experiencing what we wanted to do with SAM 10 years ago. We had all those ideas then but the tech wasn’t there and we couldn’t build what we had in mind back in 2014. But now it’s a reality.”

He said currently SAM “doesn’t completely understand intent”. “It’s more one-direction, giving information but we are working beyond that to make it a communication agent.”

Both of them called it “a time of a firehose of updates”. “We’re living in the moment, one moment, using a new update, and then 10 minutes later, a new update comes along,” said Lopez.

“I am lucky to be born in the right time, this is a step change, and we’re just getting started and unlike the Internet and iPhone moments, it’s easier to see the magnitude of this moment,” he added.

It’s a magnitude though that could flatten a lot of players who may not be able to keep up with the “firehose of updates” for varying reasons ranging from talent to funds.

Avi Meir: “We observe it in our margin – removing manual work above the margin line, this tech margin is now possible, due to this technology.”

AI benefitting margins at TravelPerk

Meanwhile, in his interview, Avi Meir, CEO and co-founder of hyper-growth business travel management booking platform TravelPerk, said, the company is “deep into AI” and is observing benefits in its margins.

“As an engineer, I was reluctant to use AI before, seeing it as investor lingo. Now it’s flipped. We are implementing it everywhere, not just a chatbot, that’s a simple trick. The search process is painful, we want to solve the pain.

“We get thousands of emails from airlines, cancellations of flights, we need people to read those emails – this can be done by AI, models trained on our own data. You cannot buy it off the shelf, and it’s not possible from scraping tech.

“We observe it in our margin – removing manual work above the margin line, this tech margin is now possible, due to this technology.”

In January 2024, TravelPerk closed an additional $104m investment led by SoftBank Vision Fund 2 with significant participation from existing investors, including Kinnevik and Felix Capital, valuing the company at $1.4b.

On the road ahead, Meir said at the conference, “There are too many opportunities and possibilities – one could easily make the wrong decision and find oneself on the wrong road.”

Thus, “execution and culture” are key, he said.

A week after his appearance in Barcelona, TravelPerk announced its acquisition of Chicago-based startup AmTrav to help further its expansion in the US. To help fund the deal and  broader expansion efforts, it raised $135 million in debt financing from private equity firms Blackstone and Blue Owl. Meir said the deal would see the US become the firm’s biggest revenue-generating region by 2026.

At Phocuswright Europe, Meir had something interesting too to say about personalization in corporate travel.

“You don’t have to personalise for the individual but the type of traveller. You can, in an anonymous way, understand I’m a tech founder, going to a conference and would prefer a hotel with fast wifi. You can do create look-alike groups without infringing on privacy.”

As for what he considers his biggest achievement, he said, “Surviving Covid.”

For everyone else who have survived Covid, it will be interesting to see who survives the “firehose of updates” and who’ll be left standing in the long game of AI.