AI companions and agents are now involved in nearly every touchpoint of a traveler’s journey, even without you actually being aware of that.

What AI is doing in travel is more than what the journey means for travelers, but also for the businesses behind the curtain. The revenue impact is vast. According to McKinsey, generative AI could unlock up to $4 trillion in annual value across industries, and travel is one of the key frontiers. From AI-powered trip planning tools that curate entire itineraries in seconds to predictive pricing models that boost airline revenue, the travel ecosystem is undergoing a revenue-driven renaissance powered by AI.

In this article, we will explore how AI companions are not only enhancing the travel experience but also driving growth in revenue across travel, retail and entertainment, including in sectors you wouldn’t immediately expect, like visual interaction tools built on generative models..

Smarter Trip Planning and Higher Bookings

Planning a trip used to be a drawn-out process that involved hours of comparing flights, checking hotel reviews, scanning blogs for tips and hoping for a good deal. But with AI companions now stepping in, that time-consuming process is now streamlined into a few intuitive steps. With just a prompt, travelers can now build full itineraries in seconds.

A good example is Expedia’s AI-powered Trip Matching feature. The tool bridges social inspiration with sales in real time by turning Instagram reels into personalized travel itineraries complete with booking links. The seamlessness of this offering increases the likelihood of bookings being completed in one sitting. On its end, Delta Airlines is partnering with Israeli AI firm Fetcherr to dynamically price fares based on demand, historical data and user behavior. Adjusting up to 3% of fares today and targeting 20% of domestic flights by the end of 2025, there is potential for a significant revenue lift in this plan, as initial results suggest as much as a 9% boost in revenue.

More and more airlines and travel companies are using predictive analytics to their advantage. Even customer service is getting an AI overhaul. Instead of waiting for long minutes or even hours to get a representative to handle your queries, chatbots and virtual assistants can now handle a range of issues from rebooking missed flights to suggesting add-ons or nudging users to complete abandoned bookings. These seemingly small touches are improving user satisfaction while quietly increasing conversion rates.

In short, AI companions are making planning easier and faster for travelers, while helping travel brands close more sales and boost lifetime customer value. It’s a win-win—and we’re only at the beginning.

Tailored Itineraries

Travelers don’t just want to get from point A to point B. They want a wholesome experience. And AI companions are delivering that with their offering of personalized travel itineraries that go far beyond flights and hotel check-ins.

AI’s influence in travel does not stop at booking. With the right AI tools, a travel plan can now include personalized retail stops like suggesting duty-free shopping at Heathrow during a long layover or entertainment bookings, such as a jazz concert in Paris that fits snugly between your hotel check-in and dinner reservation. These little touches delight travelers and consequently, open new streams of revenue across multiple sectors.

Take the new mobile app Riyadh Air is developing, for example. Beyond helping users book flights, the app will weave together accommodations, transport, local events, and even shopping suggestions into one seamless experience. By anticipating what a traveler might want to do, it creates more opportunities for partners in retail and entertainment to earn along the journey.

All of this hinges on personalization. AI analyzes traveler data to suggest the most relevant (and profitable) add-ons. This way, a frequent flyer who always selects aisle seats and books spa treatments at hotels might receive tailored offers for premium airport lounge access or nearby wellness retreats. Meanwhile, someone headed to Tokyo during cherry blossom season might be prompted to reserve a picnic kit or a private tour before they’ve even considered it.

In-Transit Guidance

The hours spent navigating airports, waiting in lounges, or passing time between connecting flights used to be a pause in the travel experience. But now, that phase of travel is still show time for both travelers and businesses. This is the trend Qatar Airways is trying to tap into with its Sama 2.0, a virtual assistant that guides travelers through the often-overwhelming airport environment, offering real-time flight updates, gate changes, and even tailored suggestions for how to spend a layover. Instead of blank hours spent staring at flight boards, Sama 2.0 might recommend a nearby spa service, shopping promotions, or even a quick sightseeing tour a traveler can fit in before their next flight. All these are opportunities for brands and airports to earn more per traveler.

Delta Airlines takes a similarly strategic approach. Through its Fly Delta app, passengers are greeted by a concierge-style interface that also offers real-time lounge access upgrades, priority boarding, seat enhancements, and even location-based shopping prompts within the terminal. This style helps travelers feel cared for while giving airlines more chances to boost ancillary revenue. And the value goes beyond immediate sales. A seamless, well-guided transit experience builds trust. When AI reduces stress during connections, minimizes missed flights and turns idle time into memorable moments, travelers are more likely to return.

In-Flight Shopping Powered by AI

Airlines are using AI to curate digital catalogs that showcase products by anticipating what a traveler might actually want. Timing is everything, and AI knows it. Instead of pushing products randomly, AI tools are now triggering shopping prompts at peak engagement moments like post-meal, post-movie, or just before landing. It’s impulse purchasing, strategically optimized.

According to industry reports, this smart in-flight retail strategy is already making a tangible impact, boosting onboard spending by as much as 15%. That’s no small feat, especially when you scale it across thousands of daily flights and millions of passengers.

Relevant Airport Retail

Airport retail has become a key revenue stream in the travel industry around the world. And AI is helping to push more revenue there with its recommendation of retail products based on real-time travel data. By analyzing shopping patterns and preferences, retailers can tailor their offerings, enhance traveler’s shopping experience and also increase revenue.

Airport apps and digital signage increasingly use AI to recommend retail products, including weather-based suggestions like sunglasses for sunny destinations. At Amsterdam Schiphol Airport, for one, frequent flyer profiles are linked to digital screens and mobile displays that adapt in real time and show targeted retail ads based on traveler demographics. The use of AI not only helped the airport increase retail sales but also helped it get over retail loss by recovering over €163,000 in retail sales between April and September 2024.

Personalized Travel-Related Entertainment

Some airlines use AI-powered systems that curate in-flight entertainment selections based on previous traveler behavior, destination and even flight duration. So rather than scrolling endlessly, passengers can enjoy customized movie picks, music playlists and games tailored to their interests. One of such airlines is Qatar Airways, which launched Converix this year. An AI-powered in-flight entertainment system, Converix recommends movies, television shows and music that reflect each traveler’s preferred genres, artists or formats. It also offers different modes of interaction by allowing travelers to navigate entertainment options through touch screens, gesture controls or voice commands.

This offering of personalized content combined with versatility leads to higher content engagement through flights. And as travelers engage with these AI-curated offerings, they are more likely to opt for revenue-generating options such as premium entertainment packages, event tickets, loyalty upgrades and the likes.

The Challenges

Despite the upside and the promises it brings to the travel industry, AI companions are not without their hurdles. Here are some of the pitfalls on that front:

Privacy Concerns

A major concern regarding the increasing adoption of AI in travel has to do with data use in personalization. This concern is why Delta’s AI pricing system triggered scrutiny from some U.S. senators, as they worry that price offers could be tailored to everyone’s “pain point.” According to a Reuters report, customers noticed inconsistent pricing for identical seats, allegedly based on personal browsing history and device type. This is a problem considering that Americans are already struggling with rising costs. While the airline insists there is no individualized targeting, travelers are increasingly wary of how their information is collected and used. To provide its personalized offerings and deliver smarter recommendations, AI tools often tap into browsing behavior, spending habits and location data. This enhances the experience, yes, but it also raises red flags around transparency and fairness.

Technical Hurdles

Airlines, hotels and booking platforms usually operate on legacy systems built decades ago and integrating AI into these outdated backbones is costly and complex. For example, predictive maintenance may sound really promising but without robust backend architecture, the execution is bound to fall short. This leaves smaller players, especially regional airlines, at a competitive disadvantage, as they may lack the funding or IT resources to upgrade.

Adoption Barriers

There is a preference for human connection that creates a barrier to full AI adoption. Not all travelers are excited about AI’s offerings. For some, human agents or travel advisors are always the way. So speaking with a chatbot will never go down with these travelers.

This is Only the Beginning

AI is improving experiences across travel while driving revenue. For all the revolution it has brought to the industry, there is room for more, with emerging trends like emotion-aware AI and cross-industry partnerships. Hence, a lot of businesses in the industry have a lot to gain if they join the moving train in order to stay competitive. For businesses, this means staying relevant in a competitive market. For travelers, it means a smoother and more personalized journey.

Sunday, July 27, 2025