The Big Question: How will AI transform the travel industry?

Euronews

03-03-2025

Did you know that tourism accounts for 10% of the EU's gross domestic product (GDP), according to the European Parliament? Statista also estimates that revenue for the EU-27 travel and tourism market will hit $220.1 billion (€210.3bn) in 2025.
The rebound in travel following the pandemic has driven much of the sector's gains in the past few years.
Glenn Fogel, CEO of Booking.com says: 'We have just seen such incredible desire to travel. You can actually see it, how much people want to travel because as soon as a country opened up, people would just jump to travel. So we got a big, big boost for the first few years of coming out of Covid. That desire to travel, it never ends.
'Now, of course, the question is, is it going to continue or not? And sometimes people talk about, 'Well, prices are so high, so will people be able to travel or is there going to be a recession and people won't have the money to travel?''
In this episode of The Big Question, Glenn sat down with Angela Barnes to discuss the issues shaping the travel sector: sustainable tourism, overtourism and the wildest future trends.
Balancing sustainability with profitability
With an increased focus on sustainability in the travel sector, travel companies and their partners are facing more hurdles in maintaining profit margins while increasing sustainability options for consumers.
Fogel emphasises: 'Sustainability is critical for the future of our industry. Our mission is to make it easier for everybody to experience the world. If the world isn't worth experiencing, that's not going to be good for travel.'
Rapidly changing and often overlapping regulations are also posing barriers to profitability in the travel sector, by forcing companies to invest significant time and resources in working out how to adhere to them.
EU regulations such as the Digital Markets Act (DMA) have contributed to higher costs and more cumbersome processes for European companies like Booking.com, unlike other global competitors like Google, which are far bigger and can more efficiently handle overlapping policies as well as rapid regulatory changes.
Other non-EU travel companies, often as big as Booking.com, also don't have to adhere to EU regulations. That significantly affects Booking.com's ability to compete with them, while also seeming to 'punish' other successful European travel companies and the domestic travel sector as a whole.
Regarding those competitors, Fogel says: 'They don't have their engineers dealing with the regulations. Their engineers are creating better services for their consumers. So my thinking is: Why did we come up with this? We're going to make things harder for the European companies to compete against the global travel industry.'
How is AI likely to change travel?
Artificial intelligence tools such as Booking.com's AI trip planner, help travellers with more personalised itineraries, while also providing more customer support.
However, Fogel notes: 'What's more important though, in the future is a thing called agentic AI and that's an area where the computer is doing the work for you.
So instead of you having to be typing into the browser or the app all the information and going through it, it's doing it for you.'
Agentic AI is likely to allow the entire travel industry network, from consumer to supplier and the partners in between to coordinate through their own AI agents and plan travel solutions.
This will, unfortunately, be likely to lead to job losses, particularly in the customer service area.
'The future is not supersonic but hypersonic'
Coming to the future of travel, Fogel said: 'But what's really interesting in the future is not supersonic but hypersonic. And where you actually are going into the edge of space and you'll be able to do a trip from, say, London to Australia in a fraction of the time it takes now to do that. Now, will it happen or not? Who knows? Part of the issue is sustainability.'
He clarified that hypersonic travel is unlikely to be introduced in the next decade and that Booking.com has no investment in it currently. However, the company would be likely to add it to its inventory if and when tickets for hypersonic travel are available for sale.
Fogel also highlighted that Booking.com will not be providing private jets for ultra luxury travel, saying: 'That's not something that we do and we have no plan to do it. It's a very, very small segment and it's not very sustainable.'