The Next Stage
By Zhang Fan, Translated By Jessie Yang | With the development of information technology, the ways people travel have been changing constantly. In the past 20 or 30 years, China’s tourism model has undergone two major evolutions. First, from price-oriented tours to package tours. Second, from package tours to self-guided tours. However, both models have reached a plateau after the rapid surge of demand.
The changing demand from customers is facing more challenges, especially with the addition of AI technology. It is said that the third evolution in the tourism industry is happening right before our eyes. Although we can’t predict the future, we can analyze some of the clues from the past two evolutions.
Package Tours In the era of package tours, travel information was unbalanced. Resources were in the hands of experts and tourist products were controlled by only a few professionals. All the products had to be purchased from specific channels.
Take plane tickets as an example. Convenient booking websites were non-existent, so customers could only buy tickets through travel agencies or check the price though global distribution systems. People even had to communicate directly with airline companies to negotiate the price.
All of these operations required professional skills, as did booking hotels, tour guides, buses, and so on. The advantage of relying on experts is their professionalism, but the disadvantage is the cost, which can only be reduced by providing repeated travel schemes.
Therefore, travel agencies came in to sell the tours, and package tours become a trend. At this stage, professionalism is the key, but personalized products are missing. However, in the early stage of tourism development, this mode perfectly met the needs of customers.
Self-guided Tours After 2005, a new era of self-guided tours began. The reason is because of millennials, who care more about personalization than the previous customers. More importantly, the emergence of online travel agencies (OTAs) has made plane tickets and hotels available online without requiring any professional knowledge.
As a result, the production model has gradually changed from expert-oriented to self-production. Although it sacrificed professionalism to some degree, a more flexible and personalized experience still satisfies many new-generation customers.
Today, self-guided tours also face some challenges. Customers now demand more personalized tours, and the supplies are more diverse as well. These two reasons directly enhance the complexity of demand and supply. According to data given by Expedia in 2013, on average users visited around 38 websites before deciding on the itinerary. It appears to me that the number is beyond the limit people can accept. So from this phenomenon, we must find new ways to connect demand and supply. This is what Mioji is working on.
Embracing The New Era The essential part is to solve the low connection between the increasing demand for personalization and the increasing supply of products. We can discuss this issue from two parts, the resource and production.
The first thing to do is unify the resource layers, and at present there are very diverse products in the supply market. In addition to air tickets and hotels, there may be many new categories, such as train, ferry, cruise, car rental, RV, tent area, entertainment tickets… etc.
The way of obtaining and using the data are completely different, so if we do not integrate such massive and heterogeneous data together, it will not be possible for us to improve production. Therefore, Mioji redesigned the bottom data structure of the tourism industry, making it comprehensible to machines.
Moreover, we have done a lot of basic research using deep-learning techniques for computers to simulate human brains and build a portfolio including all possible tourism product combinations and rank them, finding the best solution efficiently.
I believe with the aid of AI, the next stage of tourism is coming in which everyone can get specialized travel products at very low cost.
About The Author Zhang Fan is the Founder and CEO of Mioji. He is the former head of voice semantic technology at Tencent Innovation Product Center, and the former Director of Voice Assistant Technology at Sogou. Zhang completed his degrees at the French National Center for Scientific Research and Lorraine Research Laboratory in Computer Science.