Today, nearly every industry embraces chatbots for convenience and enhanced customer experience. A Facebook report reveals that 65% of customers prefer to contact businesses via chat rather than calls or emails.
The travel industry is experiencing a gradual rebound, as highlighted in Skift Research's State of Travel report. However, AI is driving the real transformation in hospitality, bookings, and travel management.
Intelligent chatbots play a key role in this shift. They assist customers in planning itineraries and making bookings and help businesses streamline backend operations and manage data more efficiently.
In this blog, we'll explore the numerous benefits chatbots provide to travel agencies. We’ll also delve into essential chatbot features and the implementation process, share relevant case studies, and provide best practices to help you maximize the value of your chatbot investment.
Travel industry chatbot landscape: A brief overview
The rapid growth of chatbots today can be attributed to the proliferation of smartphones in the global market. Smartphones make travel content highly accessible to the target audience, making chatbots a more convenient way of inquiring about tickets or bookings.
According to Business Research Company, the market for chatbots is worth $8.3 billion in 2024 and is projected to grow at a CAGR of a whopping 27.7% over the next five years.
With the travel and tourism industry contributing to about 14% of chatbot revenue share, the market size for it can be estimated to be about $1.2 billion!
The current market for chatbots constitutes of three major types:
Customer service bots
These bots primarily focus on basic customer queries such as booking and flight statuses, cancellations, changes in flight/train times or bookings, offers and discounts, etc.
Itinerary planners
This AI-powered bot helps customers plan detailed itineraries for their chosen destinations. It includes tailored suggestions based on budgets, dates, and activities.
Multilingual support bots
These bots provide services in multiple languages, assisting travellers with cultural understanding and support in their native languages regardless of where they travel.
The market value of chatbots is estimated to reach $22.42 billion by 2028, hinting at a rapid acceleration in the adoption of this technology. The rise in the use of AI and ML, omnichannel support, and voice-based capabilities seem to be the driving forces behind increased adoption.
Key features to look for in travel chatbots
Implementing a chatbot for your travel agency takes careful consideration of the features that can help your business achieve its targets and goals.
Here are a few must-have features to look for:
- Booking management capabilities: Modern chatbots should have booking capabilities to shorten a customer's journey to checkout. Look for flight and hotel booking features and if you can embed financial services in the workflow.
- Payment processing: This feature helps you eliminate window-switching for customers by facilitating payments from within the chatbot window, which helps you close more sales.
- Multi-platform integration: Look for chatbots that are compatible with all platforms like MAC, iOS, Android, Windows, etc., so that users from any device can use them without trouble.
- Natural language processing (NLP): NLP enables chatbots to have natural, nuanced customer conversations, humanizing the whole experience. It also helps them "understand" the context of customer queries and provide relevant answers.
- Personalization features: Personalized service is the key to customer satisfaction today. Look for chatbots powered by AI/ML that can collect and analyze customer data to understand their preferences and provide personalization.
- Analytics and reporting: You need to be able to track the improvements that chatbots bring to your business. Look for chatbots that offer KPI analysis, such as conversation duration, fallback rate, escalation rate, human takeover rate, etc. This helps you understand the returns you are getting from implementing a chatbot.
Implementation of travel chatbots
Today, you can get plug-and-play chatbots designed for the travel industry to simplify the implementation process.
Here is a step-by-step process to get it right:
1. Assess technical requirements
Begin by assessing the need for a chatbot from different perspectives. Consider the goals a chatbot will help your business achieve and the technical configurations it would need to perform well with your enterprise systems.
For example, specify the chatbot's architecture, platform, tools, and code so that it can be implemented seamlessly in your business workflows.
2. Consider integration options
You need to integrate the chatbot into all your customer-first interfaces (like WhatsApp, social media, website, etc.). Leverage the API or SDK kits that come with the chatbot to establish all the necessary integrations. This allows the chatbot to start functioning on the channels you integrate.
Also, consider integrating your knowledge base and CRM so the chatbot can pull customer information to provide personalized experiences.
3. Establish timelines
Schedule the implementation on your enterprise calendar and mark all the operations that would need to be paused while the chatbot is integrated. Make sure to communicate these downtimes with your employees and customers beforehand.
4. Review costs
Speak with your vendor to clarify all the costs a chatbot would incur. For example, you would need to consider platform fees, development costs, integration costs, maintenance and update expenses, troubleshooting costs, etc. Make sure your budget includes everything.
Common implementation challenges
You may face three common implementation challenges with travel chatbots. However, they are easily solvable:
- Adjustments to fluctuating prices: Prices in the travel industry fluctuate at the drop of a hat. It can get challenging to configure a chatbot that can keep up with the dynamics of pricing. A sound, seamless integration can help solve this issue.
- Integration with booking systems: If your business operates multiple booking systems (hotels, tickets, activities, etc.), it can be challenging to properly integrate the chatbot with each one. You may require dedicated APIs and constant monitoring to ensure that the chatbot is pulling real-time data from your systems for all bookings.
- Data security: If you use chatbots for payments, ensuring data security may become a concern. While implementing, look for chatbots with automated data compliance features that handle data according to applicable regulations and laws.
ROI analysis & metrics
A report by Connectys highlights that chatbots can help reduce customer service costs by up to 30%. It also highlights that chatbots can save businesses up to $8 billion by deflecting 80% of customer service agents' queries and other workflow enhancements.
Additionally, chatbots provide a 37% improvement in efficiency and maintain customer satisfaction at 96% (or higher) because of their quick, relevant responses within a few seconds.
These numbers are a testament to chatbots' positive impact on a travel company’s ROI and metrics (like CSAT). You can use the following formula to calculate the rough ROI of your travel chatbot:
ROI % = [(Benefits – Costs)/Costs] x 100
For example, if your company invested $10,000 in a travel chatbot that generated a benefit of $25,000, your ROI will be 150%, according to the formula. To assess your costs and quantify the benefits, you need to carefully monitor chatbot implementation and make sure the solution has analytics and reporting features to help you track and quantify the KPIs.
Real word case studies of travel agencies using chatbots effectively
Several big players in the travel industry are already taking giant leaps when experimenting with chatbots.
Here are a few examples:
Expedia: Leveraging ChatGPT for customer chatbots
Expedia released a first-of-its-kind travel planning chatbot on its mobile applications and sent ripples travelling in the industry.
ChatGPT engines power this chatbot and offer unique functions to customers. For example, customers can ask general questions to the chatbot, and it will automatically save the ideas from this conversation to the Trip Ideas tab of the user profile.
ChatGPT’s use of large language models has significantly enhanced the chatbot's ability to assist with travel planning. However, it remains in the early stages, as travel chatbots require training on specialized, proprietary data to perform industry-specific tasks effectively.
Although still in beta testing, Expedia’s chatbot sets a clear vision for the future of travel chatbots and paves the way for more advanced implementations in the industry.
Lessons learned: While innovative, the chatbot needs further refinement with specialized data to fully meet the travel industry’s complex demands.
Read more about this here.
IndiGo: 6Eskai x GPT-4
IndiGo, India’s leading airline carrier, recently launched its AI chatbot 6Eskai. This chatbot is powered by the groundbreaking GPT-4 engines in collaboration with Microsoft.
This chatbot can assist customers in 10 different languages and book tickets across the entire IndiGo network.
IndiGo is among the first few airlines in the region to implement cutting-edge technology to assist its customers. The chatbot uses 1.7 trillion parameters, which empower it to answer diverse customer queries.
It has already reduced agent workloads by 75%, demonstrating that this chatbot has what it takes to serve customers effectively.
Lessons learned: Successful implementation of AI chatbots requires continuous optimization to ensure they can handle diverse customer needs across different languages and services.
Read more about this here.
Best practices for deploying chatbots in your travel business
Leveraging best practices for chatbot selection, configuration, and deployment helps you maximize the benefit you can extract from the implementation.
Here are five best practices that help you get the best out of your chatbot:
- Outline design principles: It is crucial to define the objectives and goals of a chatbot to guide the design and development process. For example, to keep customers engaged in conversation, you would need to design your chatbot with NLP.
- Optimize conversation flows: Chatbots require a guide to help them carry a conversation forward. Make sure you design the questions and menu items to be intuitive and natural.
- Test your strategies: Conduct user-centric, functional, and scenario-based testing to gauge response accuracy and the naturalness of the conversation. It also helps you measure booking efficiency and other chatbot backend functionalities.
- Outline and schedule maintenance: Every technology needs maintenance and upgrades to stay functional and relevant. The same applies to your chatbots. Create a maintenance schedule with your vendor and follow it religiously.
- Consider data security: Make sure your chatbot has built-in compliance measures that automatically keep your company updated with customer data security and privacy measures. This will also help with the audit process.
Preparing for the future: Emerging trends in travel chatbots
Given that chatbot adoption is estimated to grow rapidly over the coming years, understanding future trends can help you remain agile and resilient in the face of change.
The future of travel chatbots will have integrated AI capabilities that facilitate augmented reality and virtual reality functionalities. This has the potential to help customers take a virtual tour of their destination to get a glimpse of facilities or familiarize themselves prior.
Furthermore, emerging technologies such as NLP and NLU (Natural Language Understanding) still have room to improve. This promises more humanized, intuitive, and contextual conversations that engage customers.
Additionally, since the emphasis on inclusivity is rising, you can expect voice-activated chatbots to slowly proliferate in this industry and eliminate the hassle of typing from the equation. This feature can be useful for travellers on foot, sightseeing, or live assistance.
Practical steps for implementing travel chatbots in your agency
It is easy to outline your chatbot blueprint. The four steps detailed below can be your starting point for implementing travel chatbots:
- Action items checklist: List the must-have features and functionality your chatbot must have. For example, gathering user travel details or booking reservations.
- Resources: Create a table of your company's existing resources, the ones you would need to acquire, and the total budget for the project. This will help with resource allocation.
- Timelines: Establish the timeline for every activity in the project. For example, create a schedule for vendor and stakeholder meetings, demos, implementation, and testing.
- Next steps: If your chatbot does not offer monitoring, tracking, and analytics tools, include them in the project. This will help you measure the chatbot's performance continuously to improve.
Optimizing customer experiences with AI-powered travel chatbots
Chatbots are instrumental for businesses today, regardless of the industry. Gartner reports that it is estimated that 25% of businesses will employ digital assistants as the primary channel for customer service by 2027.
The travel industry still works with legacy methodologies and workflows, which need to change to usher in a new era of travel planning and bookings. Gallabox chatbots can help your business achieve that vision.
Gallabox's WhatsApp bots help you leverage the most popular IM channel to boost your sales and grow your business easily. It lets you create WhatsApp flows, leverage GenAI to create quick responses, set up drip marketing campaigns, conduct payments over WhatsApp easily, and do much more.
Head over to Gallabox today to explore the full list of features you can implement on your travel channel through simple chatbots!
FAQs
What are some examples of travel chatbots?
Some popular examples of travel chatbots are 6Eskai, Connie, TripGen, and Verloop. Expedia also provides a ChatGPT-powered travel chatbot. These chatbots are designed to enhance customer experience by providing quick and personalized travel assistance.
What are the major functions of a travel chatbot?
Travel chatbots help you book tickets, hotels, and taxis and provide live support while travelling. You can also use them to plan your travel itinerary. Additionally, they can assist with real-time updates, such as flight delays or gate changes.
Does a travel chatbot save customers time?
Yes, chatbots provide customers with quick and accurate answers to their queries to save them time. They can also quickly book flights and hotels from the chat window. By handling routine tasks, chatbots free customers to focus on other aspects of their travel.
Can I use the travel chatbot to book tickets?
Yes, some travel chatbots allow you to book tickets and hotels directly from the chat window. However, make sure to confirm the best price beforehand. Some chatbots also offer personalized suggestions based on your preferences and travel history.
