Having spent decades in the travel industry, sparring with Steve Endacott at Airtours and me at Thomson, and being on opposite sides of the bed in the bedbank days, when he was Holiday Brokers and I was Low Cost Beds/Holidays (EnjoyHolidays was their first ever call centre partner), we’ve both witnessed the travel industry repeatedly being reshaped. Steve’s recent analysis of potential further consolidation between airlines like Ryanair and OTAs such as On the Beach makes compelling financial sense. But I believe we’re looking at something far more profound than mere consolidation: we’re on the cusp of an AI-driven transformation that will fundamentally restructure how travel is sold, bought, and experienced.
The Writing on the Wall
Steve’s numbers don’t lie, EasyJet Holidays generates £73.08 profit per passenger versus £13.42 for flight-only customers. It’s a five-fold difference that any CFO would find irresistible. But whilst Steve focuses on the mathematics of consolidation, I’m watching a parallel revolution unfold: artificial intelligence is about to do to travel distribution what the internet did twenty-five years ago, only faster and more dramatically.
Consider what Visa has already achieved. They’re not traditionally a travel company, yet their AI agents are successfully facilitating hotel bookings, cutting through layers of distribution to connect directly with inventory. This isn’t a pilot programme; it’s a glimpse of the industry’s future.
The Great Polarisation
AI will create a stark divide in travel purchasing behaviour, splitting customers into two distinct camps. On one side, you’ll have those who require minimal human intervention, customers comfortable with AI agents handling their straightforward bookings, comparing prices, and executing transactions seamlessly. These represent the majority of current online bookings: the predictable city breaks, beach holidays, and business trips that follow established patterns.
On the other side, you’ll find customers seeking genuine expertise and human advice. These are the travellers planning complex multi-destination itineraries, seeking specialist knowledge about emerging destinations, or requiring the kind of detailed advice that comes from decades of industry experience. For these customers, a knowledgeable travel consultant who can navigate intricate requirements, source exclusive inventory, and provide personalised recommendations based on a deep understanding remains invaluable.
The Squeeze in the Middle
Here’s where Steve’s consolidation vision overlaps with the AI revolution, and it’s not comfortable reading for traditional OTAs. Those businesses that currently exist primarily to aggregate inventory and simplify online purchasing, without adding substantial human expertise, find themselves in an increasingly precarious position.
Yes, AI will initially make these businesses more profitable by reducing headcount. Customer service chatbots, automated booking systems, and AI-driven recommendations can slash operational costs. But this is a time-limited false victory. If an OTA’s primary value proposition is aggregating inventory and facilitating transactions, what happens when AI agents can do this more efficiently, with access to broader inventory, at lower cost?
The uncomfortable truth is that many OTAs have become sophisticated middlemen in a world that’s rapidly eliminating the need for middlemen.
The Amazon Moment
This brings us to the real disruption ahead. The travel industry’s ‘Amazon moment’ won’t come from existing travel companies. It’ll come from technology giants and financial services companies, such as Visa, that already have the infrastructure, customer trust, and technological capabilities to deploy AI at scale.
Imagine an AI agent that understands your travel patterns, budget constraints, and preferences better than any human consultant ever could. It can access real-time inventory directly from hotels, airlines, and ground transport providers. It can negotiate pricing, handle complex multi-leg bookings, manage changes and cancellations, and even learn from your feedback to improve future recommendations.
This isn’t science fiction; the technology exists today. Visa’s early success in hotel distribution demonstrates the concept’s viability. When a company with Visa’s reach, data capabilities, and customer relationships decides to become the travel industry’s Amazon, the transformation will be swift and devastating for traditional distribution models.
Cutting Out the Layers
The current travel distribution chain is staggeringly complex: from local hotel sales teams to bed banks, from tour operators to retail agents, each layer adding cost whilst often diminishing the customer experience. AI agents can collapse this entire structure, going directly to the source and presenting options to customers in real-time.
More significantly, companies like Visa may not need to take traditional distribution commissions. Their business model could be entirely different. Perhaps, monetising through payment processing, data insights, or premium service tiers. This could make their offering substantially cheaper than current market rates whilst maintaining superior margins.
Learning from History
The travel industry was among the first to be transformed by the internet. Expedia launched in 1996, booking.com in 1996, and by 2000, traditional high-street travel agents were already feeling the pressure. The transformation was swift and merciless for those who failed to adapt.
The AI revolution will be faster. Unlike the internet adoption curve, which took years for consumers to embrace, AI is being integrated into services people already use daily. When your banking app starts suggesting holidays, when your digital assistant can book travel arrangements, when your credit card company offers personalised travel packages – the shift won’t feel revolutionary to consumers. It will feel natural, convenient, and inevitable.
The Ryanair Reality Check
Ryanair’s customer service reputation previously limited its holiday appeal. Their brand voice, crafted around no-frills, customer beligerance, works for £29 flights but not £2,000 holidays. This is precisely why the real winners in travel’s AI transformation won’t be airlines trying to move up the value chain, but technology and financial services companies moving sideways into travel.
Customers trust Visa with their most sensitive financial transactions. They trust Google with their most personal searches. They trust Amazon with their most important purchases. When these companies offer AI-powered travel services, customer adoption will be rapid and widespread.
The Path Forward
For travel businesses, the strategic imperative is clear: move towards one end of the spectrum or perish in the middle. Either become genuinely indispensable through deep expertise, personal relationships, and complex problem-solving capabilities, or embrace AI so thoroughly that you become the technology rather than fighting it.
The companies that will thrive are those that recognise this isn’t about improving existing models. It’s about reimagining the entire value chain. Whether that’s a boutique consultancy offering unparalleled expertise or a technology platform providing seamless AI-powered booking experiences, success will belong to those who choose their position and execute it flawlessly.
Conclusion
Steve’s consolidation thesis makes perfect financial sense in today’s market structure. But I believe we’re debating the arrangement of deck chairs whilst missing the iceberg ahead. The travel industry’s next transformation won’t just be about airlines buying OTAs. It’ll be about artificial intelligence fundamentally restructuring how travel is discovered, planned, booked, and experienced.
What’s your view? Are we on the brink of travel’s most significant transformation since the internet, or will traditional distribution models prove more resilient than I predict? I’d welcome your thoughts.