This is the second of a series of articles about the impact of artificial intelligence on the retail travel advisor business. As a reminder, OpenAI, the firm that produced ChatGPT, warned about its limitations: generating incorrect information, possible harmful instructions or biased content, and limited knowledge of the world and events after 2021.
Since that article appeared, ChatGPT4 has been released, a further upgrade at breathtaking speed and perhaps a harbinger of things to come. The capabilities of this software are so startling in some cases that the likes of Elon Musk, Yuval Noah Harari (author of Sapiens and other books about the future of humanity), Steven Wozniak (Apple co-founder) and many other AI and computer science experts, citing civilization level risks, have proposed that “all AI labs … immediately pause for at least 6 months the training of AI systems more powerful than GPT-4.”
While they may be right about the risks, the AI cat is likely out of the bag irrevocably. Multiple firms will continue to capitalize on the technology until they are stopped by laws whose passage seems only remotely possible. My treatment of the technology’s implications for travel retailing will assume that no pause occurs. ChatGPT-4 is already in the market, and nothing can be done about that.
For advisors who want to explore the many sides of the debate about AI as a force for good or evil, you may want to check the paperback, What to Think About Machines That Think: Today's Leading Thinkers on the Age of Machine Intelligence, by John Brockman, published in 2015. Hundreds of newer articles have been written about this as well.
We are told that GPT-4 is,
capable of creating not just words but describing images in response to a person’s simple written commands. When shown a photo of a boxing glove hanging over a wooden seesaw with a ball on one side, for instance, a person can ask what will happen if the glove drops and GPT-4 will respond that it would hit the seesaw and cause the ball to fly up.
That is remarkable. OpenAI says another version, not yet released for public use, permits a person to upload an image and the program will add a caption, describing the objects and scene. There are concerns, however, about possible abuse, including the possibility that the tool’s facial recognition powers could be used to enable mass surveillance.
In its blog post, OpenAI said GPT-4 still makes many of the errors of previous versions, including “hallucinating” nonsense, perpetuating social biases, and offering bad advice. It also lacks knowledge of events that happened after September 2021, when its training data was finalized, and “does not learn from its experience,” limiting people’s ability to teach it new things.
Are you reassured?
Consider some possible uses of ChatGPT in a retail setting:
Writing Copy – if you are one of the many people challenged by writing tasks, this software may quickly produce copy for advertisements and even client communications.
Caution: Just as you would with any assignment to another person or firm to write such copy, you must carefully review the output for message content, tone, and focus. Think of the ChatGPT output simply as a rough draft for your review.
Captioning Photos for Ads/Brochures/Emails – if you’re not sure what you should say about a promotional photo, the AI software can help.
Caution: ChatGPT-4 can create such captions very quickly, but, again, you must assess the quality of the output and whether it fully and accurately conveys the message you want to send. AI cannot substitute for your experience and judgment.
Business Planning – every advisor business needs a business plan. I asked ChatGPT to “create a business plan to start a retail travel agency.” In seconds the software produced this:
Executive Summary: The retail travel agency is a service-based business that offers clients personalized travel arrangements. The travel agency will specialize in providing customized travel packages that cater to the needs and preferences of individual clients. The business will be based on offering high-quality service, personalized attention, and a wide range of travel packages to customers. The main goal of the travel agency will be to provide a unique travel experience for customers and establish long-term relationships.
Business Description: The retail travel agency will offer a wide range of travel packages, including airfare, hotel bookings, car rentals, and tour packages. The business will cater to both individual and corporate clients, with a focus on providing customized travel packages for each client. The travel agency will have a physical location and an online presence, with a user-friendly website that allows customers to browse and book travel packages.
Market Analysis: The travel industry is a growing industry, with an increasing number of people looking to explore different destinations. The target market for the retail travel agency includes individual travelers, families, and corporate clients. The travel agency will focus on offering personalized travel packages that cater to the needs and preferences of each client. The business will also offer competitive pricing and excellent customer service to attract and retain customers.
Marketing Strategy: The marketing strategy for the retail travel agency will include a mix of online and offline marketing efforts. The business will utilize social media platforms to promote travel packages, engage with customers, and build brand awareness. The travel agency will also advertise in local newspapers, magazines, and travel guides. Additionally, the business will attend travel expos and fairs to showcase its services and attract potential customers.
Operations and Management: The retail travel agency will have a team of experienced travel agents who will be responsible for providing personalized service to clients. The agents will have access to the latest technology and travel resources to create customized travel packages. The travel agency will also have a customer service team that will handle customer inquiries and complaints. The business will be managed by an experienced team of managers who will oversee day-to-day operations.
Financial Plan: The financial plan for the retail travel agency will include start-up costs, operating expenses, and revenue projections. The start-up costs will include rent, furniture, equipment, and initial marketing expenses. The operating expenses will include salaries, rent, utilities, travel resources, and marketing expenses. The revenue projections will be based on the number of clients and the revenue generated per client. The business will aim to break even within the first year and achieve profitability within two years.
Conclusion: The retail travel agency will offer customized travel packages that cater to the needs and preferences of individual and corporate clients. The business will focus on providing high-quality service, competitive pricing, and excellent customer service. With a strong marketing strategy, an experienced management team, and a sound financial plan, the travel agency has the potential to establish itself as a leading travel agency in the region.
Impressive but that is not really a business plan; it’s a general description of some key elements that a business plan should contain. The substantive work remains to be done.
I put a harder question: “Should my travel agency charge service fees or rely just on commissions from travel suppliers?” The first response was: “Something went wrong. If this issue persists please contact us through our help center at help.openai.com.” Instead, I asked the software to “Regenerate the Response,” and got this, again in seconds:
Whether your travel agency should charge service fees or rely just on commissions from travel suppliers depends on various factors. Here are some things to consider:
- Business Model: Consider your business model and how you plan to generate revenue. If your travel agency is focused on offering customized travel packages and personalized service, then charging a service fee may be a better option. On the other hand, if you plan to operate as an online travel agency or focus on selling a high volume of travel packages, relying solely on commissions from travel suppliers may be more feasible.
- Competition: Consider your competition and what they are offering. If your competitors are charging service fees, then it may be necessary for you to do the same to remain competitive.
- Customer Expectations: Consider what your target market expects. Some customers may be willing to pay service fees for personalized service and customized travel packages, while others may prefer to shop around for the best deals and may not be willing to pay service fees.
- Travel Supplier Relationships: Consider your relationships with travel suppliers. Some travel suppliers may offer higher commissions for travel agencies that do not charge service fees, while others may offer higher commissions for agencies that do charge service fees.
In general, charging a service fee may be a good option for travel agencies that offer customized travel packages and personalized service, while relying solely on commissions may be more feasible for those that operate as online travel agencies or sell a high volume of travel packages. It's important to consider the above factors and decide based on what works best for your travel agency and target market.
Not bad, in a limited way. The response illustrates that the software is not designed to give advice. ChatGPT is not going to tell you what to do. It can outline general principles related to the business question asked, but the serious and detailed work will still fall on the shoulders of agency management.
As interesting as ChatGPT is, these simple examples tell a compelling story. The software can be useful. It can even be creative in some situations. But it’s not going to replace your brain, your experience, and your judgment any time soon.
But what about travel advice? Won’t prospective travelers seek direction from ChatGPT or the other AI products entering the market and, if so, is that a threat to travel advisors?
Keep in mind that while these new AI applications have impressive skills, they are lacking something that humans have: experience and the impact experiences have on emotions, judgment, and other aspects of being “intelligent.” A skilled magician can pull a rabbit from a hat, but we know that this is a trick, an illusion. The rabbit was there all along. It did not materialize out of thin air at the snap of the magician’s fingers.
AI software is not human. It does not acquire “experience” by probing the internet for data. This is, I believe, a crucial consideration when thinking about how programs like ChatGPT may impact travel.
One writer asked ChatGPT, what is ChatGPT?
The answer in the key part was: “I use machine-learning techniques to generate human-like responses to natural language input.” Even the software knows it’s only imitative.
On the other hand, the software does allow for a more iterative, natural conversation-like dialogue and deeper probing for responses. The writer testing for the hospitality industry suggests roles such as virtual concierges, informational kiosks, and virtual front desk assistants. “Adding natural language as an interface will improve the experience of these dramatically.”
One of the concerns, however, is that the speed of updating the AI software may itself become a challenge even for sophisticated travel search firms.
there are going to be significant challenges. The problems of how to obtain real-time data from countless sources, process it all to result in optimal solutions and then act rapidly to benefit consumers.
One of the most direct tests of ChatGPT as a source of travel information and advice was recently published in USA Today by one of its consumer travel reporters. The advice generated for a trip to New York City from Nashville was, in my judgment, shallow and pedestrian. And, of course, the software could not make actual bookings. The author’s request for the same help from a real travel advisor produced much more substantive and personally relevant information, based in part on the advisor’s personal experience. To repeat the critical point, ChatGPT is never going to have personal experiences. At best it will simulate them.
American Express and Microsoft are collaborating on using AI to facilitate recording and tracking business travel expenses. Many other firms are testing and experimenting with it. In the next and final installment of this series, I will look more deeply into some of the specific “use cases” (one of my least favorite terms of all time) for the new AI programs.