In order to get people to travel again, companies offered appealing cancellation and refund deals. Customer expectations have now shifted, and demand for an easy booking experience is stronger than ever and the need for “free” and easy cancellations is greater.

Artificial intelligence (AI) bots are being utilized by many companies within the travel and hospitality industry to quickly, easily and cost effectively help customers book trips, change reservations, check in and check out, among other tasks. Furthermore, AI can be leveraged to personalize customers’ experiences, which helps to foster brand loyalty.

“Increased deployment of machine learning and AI in the travel industry accounts for enhancing personalization, giving valuable advice, and ensuring a speedy response period, even when the
employees are absent,” an Eastern Peak report stated. “As many hotels and resorts worldwide depend heavily on artificial intelligence solutions in delivering their services and gaining a strong reputation, the travel AI market is projected to exceed $1.2 billion by 2026.”

According to the same report, some of the more common AI use cases in the travel industry include the following: chatbots; voice-based digital assistants; automatic facial recognition; personalized recommendations for tourists; profound sentiment analysis; baggage handling solutions; robotic technologies for self-service; and flight forecasting apps.

Checking in and out of flights and hotels via an app became the norm during the pandemic and will continue to be a customer experience expectation. Personalized experiences are also desirable, and AI ensures users are getting targeted information by synthesizing massive data sets quickly.

Flexible payment options are also a notable trend within the travel and hospitality industry. The uncertainty of COVID and how long it would last caused many customers to feel a sense of urgency to travel when they can, and a wider range of payment options could allow them to spend more or spend sooner. Flexible payment options such as buy now, pay later (BNPL) are most popular with younger generations of travelers/consumers.

More than 45 million people ages 14 and older in the U.S. used BNPL services in 2021, according to Insider Intelligence’s inaugural user forecast for financing options. That’s up 81.2 percent over 2020, and the age range of BNPL users will widen over the coming years as well, the forecast said.

“Back in 2018 — when the key players of today were still establishing themselves as legitimate payment providers — more than 80 percent of BNPL users were millennials or Gen Zers 14 and
over,” the Insider Intelligence forecast said. “That figure dropped to 73.2 percent in 2021, though younger consumers are still more willing than most to try alternative payment options.”

Across generations, nearly 60 percent of consumers say they prefer BNPL over credit cards due to the ease of set payments, the simple approval process, and lack of interest charges, according to a PYMNTS survey and reported by CNBC.

“One reason young people in particular are drawn to buy now, pay later payment plans is because many watched their parents struggle with credit card debt amid the 2008 economic recession,” said Christine Roberts, head of Citizens Pay, a BNPL option offered by Citizens Bank, in the CNBC article. “Transparency about how long it will take to pay off a big-ticket purchase is also key for Gen Z and millennial consumers. The pay-over-time option allows it to fit into their budget and to know when the payments are going to end.”

Credit cards, on the other hand, typically calculate a minimum monthly payment based on the overall card balance rather than individual purchases, the article stated.

Travel such as flights, resort and hotel stays, cruises, and more are exactly the large-ticket items consumers want to purchase using a payment plan as opposed to a credit card.

To optimize the customer experience, companies need to ensure they’re tapped into current trends such as touchless options (e.g., check-in and check-out), AI-driven personalization, and flexible payment plans.

“There’s no debating that we’re more in a digital-first era than ever before,” Emily Hartman, chief, business teams, Allianz Partners USA, says. “Customers want seamless and touchless processes such as fully digital claims experiences with digital reimbursement. They’re also looking for technology to be utilized to surprise and delight them throughout their customer journey. But I think the top expectation is to never let “digital-first” mean “digital-only.” Meeting the customer where they are and maintaining the human touch when it’s needed most is the key to success.”

This is an excerpt from the report Customer Experience Trends in Travel and Hospitality. Download it here.