According to a survey by market research firm National Research Group, 61% of respondents said they would be willing to use generative AI to plan their trips. Researchers at online travel information platform Skift estimate that AI will create a $28 billion market opportunity for the travel industry, indicating that AI-powered travel arrangements will be the next hot application.

Richie Karaburun, a professor of hospitality and tourism at New York University, told Investors that the key goal of AI applications in the travel industry is to create AI assistants that can customize highly personalized itineraries for travelers.

Online travel platform giant Expedia previously stated in a media interview that large-scale language models like ChatGPT are changing the way travelers plan their trips, allowing consumers to define their needs more intuitively. Instead of relying solely on keywords, travelers can use conversations to express their budget, preferences, and goals. AI then provides instant feedback, tailoring everything from transportation and accommodation to itinerary activities to more closely match their preferences.

According to Booking.com’s recently released “2025 Global AI Awareness Report,” AI tools are most commonly used during travel for translation, local activity recommendations, restaurant recommendations, and navigation assistance in unfamiliar environments.

Compared with the transformation of traditional travel agencies, global OTA giants have launched a fierce AI arms race, trying to seize the initiative in this wave.

The Impact and Opportunities of Generative AI in the Travel Industry

The travel sector is experiencing a major transformation, driven by the rapid adoption of generative AI solutions. Here are the key insights and practical inspirations for entrepreneurs, drawn from the current developments:

1. Massive Market Demand

• A recent survey by National Research Group found that 61% of travelers are open to using generative AI for planning their trips. This high willingness signals robust consumer demand for AI-powered travel tools.

2. Lucrative Market Potential

• Skift researchers estimate that AI can create a $28 billion business opportunity in the travel industry, making it one of the fastest-growing and most lucrative areas for innovation.

3. Hyper-Personalization

• According to Richie Karaburun of NYU, customizing highly personalized itineraries is a primary goal for AI in travel. AI systems can analyze individual preferences, budgets, and desired experiences to deliver bespoke travel planning—moving far beyond one-size-fits-all packages.

4. Revolution in User Experience

• Expedia highlights that large-scale language models (like ChatGPT) enable travelers to plan trips through natural conversations, rather than just keywords. This allows for a much more intuitive and user-friendly process, where travelers simply describe what they want and AI instantly curates a tailored experience.

5. Most Popular AI Travel Tools

• According to Booking.com’s “2025 Global AI Awareness Report,” the most common uses of AI during travel include:
  • Translation services
  • Local activity recommendations
  • Restaurant suggestions
  • Navigation assistance in unfamiliar areas

6. Competitive Edge and Industry Transformation

• Global Online Travel Agencies (OTAs), such as Expedia and Booking.com, are engaged in an AI arms race—vying to capture market share in what will soon become the industry standard for trip planning, booking, and travel assistance.

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Insights for Aspiring Entrepreneurs

• Develop AI-powered travel solutions that focus on personalization, intelligent recommendations, and seamless user experiences.
• Target underserved or niche travel segments by combining local expertise with AI-driven customization—for example, eco-tourism, adventure travel, or cultural heritage tours.
• Integrate popular AI functionalities (translation, navigation, local recommendations) into platforms or mobile apps, making travel smoother for international tourists.
• Partner with OTA giants or local travel providers to leverage data and reach wider audiences, or create vertically integrated solutions that manage the entire travel lifecycle from inspiration to return.

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Bottom line:
The travel industry is rapidly shifting toward AI-powered, personalized experiences, with vast opportunities for innovation. Entrepreneurs who can harness generative AI to address real traveler needs—simplifying planning, personalizing recommendations, and enhancing experiences—will be well-positioned to carve out a share of this growing, tech-driven market.