Travel Innovation and Technology Trends 2024

Minimizing hallucinations in GenAI and LLMs

This is a preview of the full report:
From Buzzword to Bottom Line: Keeping Pace With Gen AI in Travel

Generative AI (GenAI) dominated travel industry conversation in 2023, teasing a promise to revolutionize the way we plan, book and experience travel. Across both leisure and corporate travel, the race is on to implement GenAI in everything from consumer interfaces to back-end operations. As the industry moves beyond the initial hype, 2024 is all about leveraging what has been learned so far to focus on the most beneficial use cases – and avoid wasting resources on those without a clear ROI. 

As OpenAI (with the backing of Microsoft) and its large language model (LLM) competitors (including Google, Amazon, Anthropic, Perplexity, Cohere, Stability.ai and others) forge ahead in developing more advanced LLMs, travel companies are in parallel accelerating their own investments in GenAI implementations. But separating the winning use cases from the rest is an ongoing process of trial and error. This report highlights the key areas to watch in the near term, providing an overview of the GenAI initiatives travel companies have launched and lessons learned in the past 18 months. 

Proprietary information is what can make an implementation of GenAI stand apart and create competitive advantage by enhancing the LLMs ability to answer detailed questions or provide specific services, with increased accuracy, for each company’s unique product and customer base.  

Hallucinations

Many business leaders have expressed particular concern about large language model (LLM) hallucinations, which generate output that is factually incorrect, irrelevant or unrelated to the prompt. In perhaps the most high-profile example so far of the real-world impact of incorrect information being provided by a chatbot, Air Canada was in February 2024 ordered to pay compensation to a customer who received inaccurate information from its bot. The case highlights new potential gray areas of the law, as Air Canada argued that the bot was “a separate legal entity” and “responsible for its own actions.” 

Hallucinations can be minimized through various approaches, including prompt optimization, fine-tuning and retrieval augmented generation (RAG), the latter of which optimizes LLM responses via reference to an external knowledge base (e.g., a travel company database). RAG is a particularly important concept because a customer inadvertently receiving bad information can damage hard-earned trust instantaneously. On the other hand, travel companies are sitting on troves of proprietary data about travelers’ intentions and desires, as well as information about destinations, airports, airplanes, hotel properties, car rental operations and cruise ships. Certainly, LLMs level the playing field in terms of access to powerful models for everyone big and small. But proprietary information is what can make an implementation of GenAI stand apart and create competitive advantage by enhancing the LLMs ability to answer detailed questions or provide specific services, with increased accuracy, for each company’s unique product and customer base.  

Phocuswright's full report From Buzzword to Bottom Line: Keeping Pace With Gen AI in Travel is part of the larger content series Travel Innovation and Technology Trends 2024

OpenAIs GPTs are the easiest way to experiment with RAG implementations, as they can augment the ChatGPT LLM with proprietary information through the simple pasting of text content or uploading of files. For more advanced implementations, it’s possible to call your own APIs via the GPTs Actions. For OpenAI’s guide to building a GPT, click here. Related, OpenAI also offers Assistants which work purely via API. There are plenty of other software options in the marketplace, but OpenAIs are some of the easiest to get started with. 

Current Limitations 

Beyond hallucinations, it is imperative to understand the current limitations of GenAI for travel applications; it is not (yet) a replacement for machine learning, which should continue to be relied upon for high-stakes tasks that require accuracy such as revenue management or demand prediction. GenAI is better thought of as a potential layer to help users query or understand output from an AI-powered demand prediction system in natural language. 

When weighing any concerns, it’s important to keep in mind how fast the technology is evolving. It will continue to improve rapidly over time. So far, travelers appear to be somewhat leery of the information they are receiving; per preliminary data from Europe Consumer Travel Report 2024, only 32-37% of travelers say they trust results/answers from GenAI. 

Data Security 

Given that LLMs learn and improve from their training data, there have been palpable concerns about the sharing of sensitive or valuable proprietary data. In response, OpenAI introduced ChatGPT Enterprise in August 2023 and ChatGPT Team in January 2024, both of which promise not to train their models on shared business data.

WEEKLY RESEARCH INSIGHTS

We dig deep to give you the data and trends that drive the travel, tourism and hospitality industry.

Get the latest in travel industry highlights with our free weekly research articles and more. Sign up to get the latest delivered directly to your inbox.

FOR MORE INSIGHTS

See all of Phocuswright's free research insights here.

Sign up to get the latest delivered directly to your inbox.

Open Access Research Subscription

Research is our priority. Our Open Access research subscription puts the world’s most comprehensive library of travel research and data visualization at your fingertips.

Clients have relied on Phocuswright's deep industry knowledge for over 25 years to power great decisions, help justify a pitch, build a strategic plan and elevate any presentation through trusted research and data. When companies and executives reference Phocuswright, they gain the trust of an industry keen on data, trends and analytics.

See the full benefits of an Open Access subscription here.

Contact Us

For any questions you may have, please call or email us at
📱 +1 860 350-4084
📧 info@phocuswright.com

About Phocuswright
Events
FAQ
Copyright
Contact Us
Research
News
Privacy & Terms
Press Room

Email Updates
Register for Phocuswright emails about research data, events and more:

A WHOLLY OWNED SUBSIDIARY OF

Copyright © 2023 by Northstar Travel Media LLC. All Rights Reserved. PO Box 760, Sherman, CT 06784 USA | Telephone: +1 201 902-2000

The Phocuswright Conference  •  Phocuswright Europe  •  Global Startup Pitch  •  Travel Tech Fellowship  •  Phocuswire  •  Web In Travel  •  Inntopia  •  Retail Travel  •  Hotel Investment