Artificial Intelligence in P2P activity:

Booking.com and the Tourism

Industry

Introduction
Since antiquity, human beings have been thinking about artificial intelligence to improve their
daily life, this was the case, for example, of the first calculating machine invented by Blaise
Pascal in 1642: the machine could perform calculations that only human intelligence can
perform. It was only after several centuries (mid-20th century) that the researcher John
McCarthy first used the expression and concept we use today of artificial intelligence (AI).
AI is a set of techniques that allow machines, via algorithms, to do what only human
intelligence could do. Thus, artificial intelligence is able to perform tasks on which it has been
previously programmed, such as playing chess, but it can also perform more elaborate tasks
that require learning and is able to adapt to a given situation. It’s the case, for instance, of
robot director which can make governance recommendations thanks to its analysis.
Today we are constantly in contact with artificial intelligence, sometimes without even being
aware of it. We use artificial intelligence when we want to shop online via Amazon for
example, when we want to search for a cake recipe on Google or when we talk to Siri to find
out what the weather will be like tomorrow. Artificial intelligence has revolutionized our
daily life and society. As a result, some sectors of the economy have had to adapt to keep up
with this new progress. This is particularly the case of the tourism industry which has seen,
for example, the arrival of travel platforms, sometimes to the detriment of travel agencies, or
which has seen a major change in communication between the client and the hotel through the
use of chatbots.
I choose to focus my individual project on the impact of artificial intelligence on the tourism
industry. Indeed, many P2P platforms have been created thanks to artificial intelligence, such
as Booking.com and they revolutionize the way of people book or search their destinations:
55% of French people have booked their travel on internet in 20181. I chose to talk about
Booking.com because it's one of the largest booking platforms in the world. It invests
massively in digital technology in order to improve customer experience and connect several
million travelers with several million accommodations (more than 1.5 million room nights are
reserved in this platform2). So, for me, Booking.com is the P2P platform that has
revolutionized the way people book their trips and it is also a very good example of the use of
artificial intelligence in the P2P activity.
For my project, I chose to rely on an academic article about smart tourism. For me, smart
tourism is a concrete example of the evolution from traditional tourism to a tourism that
adapts to new technologies. Thus, artificial intelligence has changed the traditional business
model of tourism into a new business model facilitating the interconnection between all
tourism stakeholders. The first public article shows positive impact of artificial intelligence on
the tourism industry and the second article is about Booking.com. I chose these two articles
because the first article summarize how AI has changed traveler’s behavior. Thanks to the
reservation platform the whole process of ordering, paying and travelling can be completed
within minutes. As a result, the tourism industry has changed dramatically, and its processes
have accelerated. The second article demonstrates the use of AI in the P2P industry and how
AI improves the value proposition to customers.

Chapter 1

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Academic article: Artificial intelligence in smart tourism: a conceptual framework

The context addressed by the article is tourism, more specifically smart tourism. The tourism
sector is growing strongly: increase in tourism receipts (US$ 584 billion more between 2016
and 2017), increase in the number of international tourists (7% increase between 2016 and
2017) according to Tourism Organization (UNWTO: Tourism Highlights 2017 Edition).
Faced with this growth and the rise of news technologies, many countries are relying on
tourism for their economic development and have chosen to promote smart tourism.
But what is smart tourism? The article proposes two definitions of smart tourism, the first
according to Lopez de Avila (2015) and the second according to de Gretel et al (2015). For
me and according their 2 definitions, smart tourism would allow, thanks to new technologies,
to promote the interaction between people; people and their environment in order to create a
better value proposition to tourists (better travel experiences), inhabitants (better living
environments) and companies.
The purpose of this article is to show to tourism professionals how artificial intelligence could
bring added value to travelers and businesses in order to achieve intelligent tourism.
Information technology is important to business success and strategy because it create value
for profit and improve the performance of the company.
The conceptual framework provided is the use of artificial intelligence which allow smart
tourism possible. This conceptual framework integrates first the artificial intelligence/machine
learning, then the smart business ecosystem and finally the smart destination.
Artificial intelligence can improve the travel experience of tourists in several ways:
- It anticipates the needs of the tourists thanks to numerous data and information such as their
activities or their favorite dishes. All this data will allow the AI to know the behavior of a
tourist and will offer them several personalized services that meet their needs. Another
advantage of the AI is that it can be at the service of travelers 24/7 thanks to chatbots or
robots that can answer travelers' questions at any time. Tourists therefore receive information
very quickly (saving time and therefore less time cost), no need to travel to get information
(they can get information from home, it is useless to go to an agency for example).
- It facilitates the stay of the tourist by offering them detailed information such as their
geolocation or by offering them a translation service.
- It enables travelers to help other tourists in their choice of destinations by sharing their
experience, particularly through social networks. They can also publish their photos in real
time via Instagram or post comments on a travel platform such as Booking.com. The IA/ML
also allows them to automatically create photo albums of their trips which can be an added
value in the travel experience and easily share them with their friends/family (Google Photos
for example).
The smart business ecosystem is composed of:
- Tourism value chain of physical provider (like tourism operators, airline, hotel, attraction,
mall operators, etc.).
- Online provider like TripAdvisor (tourism online provider), Airbnb (accommodation service
provider), etc.

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- Cash flow: ApplePay, Amazon Pay
- Information flow: Facebook, Instagram
This union between the physical and online providers allows tourist specialists to offer
travelers a one sot shop portal, i.e. travelers will be able to make their various purchases of
different kinds in the same place. For example, thanks to the online services, they will be able
to book a hotel via TripAdvisor and then a means of transport via uber and all this from home
in just a few minutes.
A smart destination is a smart city where tourists and locals interact together to make the
city more sustainable, respectful of the environment and people, and to improve the quality of
life.
This research found that the value chain of traditional tourism business ecosystem lacks
interaction. Indeed, this value chain had some negative points. First of all, information and
data flowed poorly between each supplier. Secondly, it was impossible to integrate intelligent
services for tourists, making it difficult to analyze travelers’ needs and recommend a service
or product. Thus, the smart tourism business strategy needs to consider following:
- In order to connect all the provider, the tourist value chain need to integrate the dimension of
smart destinations, integrate information flow, cash flow and logistics.
- It's essential to determinate a scale of the business strategy. The scale needs to begin to the
small scale to big scale and take into account all the stake holders.
- All the data and information collected will allow to set up recommendations and forecasts
for travelers but also for companies. This will create added value for tourists who will be able
to experience a smart tourist experience (customization of their demand), for businesses who
will see their profit and performance increase.

Moreover, thanks to artificial intelligence, smart tourism can leverage:

- Cognitive engagement, which brings together all the tools for customer support and
satisfaction. For example, chatbots or voice customer assistant.
- Cognitive process automation which allows to automate the tourism process.
- Cognitive insight gathers all the important data on tourism that can help to set up
recommendations for the customer or make targeted marketing.

As extension to this paper, I can suggest a project idea on the challenge of smart tourism.
Indeed, many countries have taken up smart tourism, but it can raise some issues like the
question of governance, the digital gap or the digital exclusion: many people want to be
disconnected during their vacations so is the smart tourism can adapt to this different need?
Another issue can be the tourist provider: are they enough infrastructure and skills to support
smart tourism?
The language of this paper was clear, whereas there exist a lot of new word for me like smart
destination, cognitive process automation, cognitive engagement. But this paper explains well
this concept.

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Chapter 2
Public article n°1: Benefits of the Use of Machine Learning and AI in the Travel
Industry

Artificial intelligence and machine learning have become important tools in the success of a
company.
It is crucial for travel companies to satisfy their customers. Indeed, the customer value
proposition is more important on the internet than in the physical world because a customer
can change a website in one click if it does not meet his expectations. According to the article,
"88% of leisure travelers will switch to a different app or website if yours isn't meeting their
needs".
Thanks to the increasing use of booking and travel platforms, artificial intelligence algorithms
can use a lot of information about customers' habits. Moreover, artificial intelligence can
facilitate the exchange between two markets (P2P platform) for example for booking.com,
artificial intelligence can facilitate the exchange between the customer and a hotel which
improves the customer experience.
Chatbots is an example of an AI tool. A large majority of people (71%) use chatbots to get
answers to their questions. This tool offers added value to customers because the bot can
answer any basic or complex question at any time and in a matter of seconds. Customers don't
just want the chatbot to answer their question, they also want to have a friendly chat and help
them in case of an emergency.
One of the secrets of famous platforms is that they offer a personalized experience to each
customer when they visit their application. This is the case of Booking.com: thanks to
customer's search history, the platform can make recommendations that are suitable for the
customer. For example, booking.com can suggests a hotel with the right budget, a destination
that meets the requirements of the customer etc. This personalization encourages the customer
to be loyal to the platform. Moreover, machine learning is an effective way for customers to
save money. Indeed, machine learning allows travelers to know when the best time is to book
a destination or a flight at low prices. AI and ML also play an important role in content
optimization. For example, these technologies have improved the TripAdvisor site by sorting
and selecting the better pictures that will appear first on the site. Another platform,
Booking.com, uses Neural Machine Translation (NMT) to translate all the texts on their site
into 43 languages. In addition, AI can also make the visit to a site more attractive by
improving the interaction between the interface and the user and facilitating the process of
choosing different options. These uses of AI enable travel platforms to enhance the customer
experience.
Artificial intelligence also brings benefits to companies. The article offers some of these
benefits:
- Sales optimization: AI allows sales teams to offer the ideal trip to their customers thanks to
the data collected.

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- Price optimization: AI can offer services at the best prices based, for example, on customer
loyalty or days of the week.
- AI allows the marketer to reach a customer on the right device at the right time thanks to the
use of cookies.
- Detect fraud: AI can identify unusual situations such as online payments.

Public article n°2: Booking.com anticipates mobile users purchase intent with AI
driven experience

This article shows us how artificial intelligence can improve the customer experience of users
using the booking.com platform.
It is essential for companies to satisfy its customer, i.e. a company must take into account the
explicit and implicit needs and expectations of an individual in order to offer the right service
or product that brings a benefit to customers. Artificial intelligence and machine learning
therefore play a major role in this process of serving the customer almost immediately.
According to Michael Becker, "AI and ML [...] must be developed to become connected
marketers, connected businesses and serve the connected individual".
Today, booking.com uses artificial intelligence to target individuals' expectations and offer to
them intelligent and personalized results. The platform is able to anticipate their customer's
buying intentions based on what they have bought or searched during their previous visits to
the platform. Thus, as soon as a customer visits the platform (provided that it is not his first
visit), he will see photos or destinations linked to previous bookings. For example, I recently
used booking.com to book a hotel and on my second visit to the site, booking.com
immediately suggested to me other destinations and hotels close to the city I had recently
chosen. So, Booking.com offers me a personalized experience based on my booking history.
The platform has implemented a new tool “booking experiences” that allows customers,
through a QR code, to have access to all the activities that can offer a destination. This new
feature allows customers to save time because:
- They will no longer need to queue to buy tickets: the QR code serves as a ticket.
- They can see from home all the attractions available via the platform, so they no longer need
to visit several websites to search for an activity and book in advance.
- This tool also allows the customer to facilitate the payment process, in fact, the QR code is
attached to the customer's credit card so it’s no necessary to bring cash or to show their credit
card.
- They are free to stop participating in an activity or, on the contrary, to register at the last
minute for an activity and at no extra cost.

"Booking experiences" encourages their clients to discover new destinations according to

their passions and places of interest rather than looking for a destination according to a place
or hotel. This functionality allows travelers to expand their search and find exactly what they
want. In addition, thanks to booking.com travelers will no longer have to look at several sites
at once to search and book: the platform allows them to search for destinations that match
their passion and book the ideal hotel or destination related to their passions at the same time

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and at the same platform. The booking platform has also implemented a chat system that
allows customers to easily and quickly chat with Booking.com or the hotel.
The creation of booking experiences would not have been possible without the use of artificial
intelligence. This technology has considered the interests and desires of the customers,
allowing the platform to understand their expectations and then offer them the right offer that
will deliver value to the customers.
However, this article did not talk about the use of chatbot which is also a new feature of
booking.com (but not yet implemented in France). The chatbot allows, for instant, answers to
classic customer questions at any time of the day or night. The platform also connects
customers with a taxi. As soon as someone has finished booking a hotel, booking.com offers
to put them in touch and book a taxi.

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Conclusion
These articles have shown the impact of artificial intelligence on the tourism sector. The rise
of artificial intelligence pushes the tourism sector to adapt. Smart tourism is an illustration of
this adaptation. Indeed, it offers travelers a smart experience, a smart destination and smart
business ecosystem. Smart tourism is considerably changing the business model of traditional
tourism: the tourism value chain is no longer includes the offline provider but also the online
provider. All tourism stakeholders (travelers, hotels, providers, government) are
interconnected.

Artificial intelligence has significantly changed the tourism life cycle: from the search of the
destination, to the purchase of the hotel room, to the experience in the chosen location. The
rise of P2P platforms is one of the causes of this change in tourist habits. Indeed, P2P
platform like Booking.com, has helped to significantly improve the customer experience of
travelers. Booking.com offers a considerable customer value proposition: it provides a
personalized experience to the customer, based on their search history, offering the customer
services that satisfy them and meet their needs. The platform makes their life easier by saving
them time, for example, by using chatbots (which answers to their question in just a few
minutes) or QR code. However, it is essential to also consider the second side of the platform
market, which is the hotel establishments. Thanks to Booking.com, hotels have a greater
visibility with these customers, they will be able to communicate with them easily via
Booking.com’s messaging system and the comments left by their customers make the
establishment more attractive and can help them improve their services. In addition, the
source of revenue used by booking.com is commission: hotels pay an average of 15% on each
booking to the platform.

In conclusion, we have seen that Booking.com bring:

- A high customer value proposition to its both market: traveler and hotel. Thanks to
personalized experience (traveler) and a high visibility for the hotels.

- The P2P platforms acquire incomes mainly from their accommodation’s

establishments (commission of 15 % according to total number of bookings) and fix a
zero price for the travelers.

- The technology plays an essential role for the CVP of the two market. Indeed, AI
allows the platform to improve the customer experience and to help the hotel to attract
better their customer.

- Thanks to Booking.com, all the main stakeholder of the company has a direct
relationship: the traveler can directly talk with the hotel for example, there is not
intermediary.

A recommendation for Booking.com can be using new technologies to create and offer an
ecological trip to its customer. Indeed, in relation to smart tourism, booking.com can offer a
more sustainable future for the industry of the tourism. For example, the platform can (thanks
to algorithm), recommend a destination or a hotel which respect the environment. This

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sustainable approach should take into account and bring benefit to the travelers and the
accommodation establishment.

Bibliographie

Introduction
1
: Lainé, L. (2019). Dossier de l’été 2019 : les chiffres clés de l’e-tourisme. See on the
website site : https://www.lechotouristique.com/article/dossier-de-lete-2019-les-chiffres-cles-
de-le-tourisme
2 
: Harrison & Shriftman (2017). Booking.com Expands Global Access to the Booking
Assistant. See on the website: https://news.booking.com/bookingcom-expands-global-access-
to-the-booking-assistant/

Verbeke, L. (2018). Aux origines de l'intelligence artificielle. See on the website :

https://www.franceculture.fr/numerique/aux-origines-de-lintelligence-artificielle

Qu’est ce que l’intelligence artificielle ? See on the website : https://www.college-de-

france.fr/media/yann
lecun/UPL4485925235409209505_Intelligence_Artificielle______Y._LeCun.pdf

Chapter 1
Tsaih, R. H., & Hsu, C. C. (2018). Artificial intelligence in smart tourism: A conceptual
framework. Artificial Intelligence. See on the website:
https://pdfs.semanticscholar.org/24e9/507f17e1866bb38abaa57f7e3cde1f64be58.pdf

Chapter 2
Public article n°1:
Samuely, A. Booking.com anticipates mobile users’ purchase intent with AI-driven
experience. See on the
website:https://www.retaildive.com/ex/mobilecommercedaily/booking-com-anticipates-
mobile-users-purchase-intent-with-ai-driven-experience
Public article n°2:
Bulanov, A. Benefits of the Use of Machine Learning and AI in the Travel Industry. See on
the website :https://djangostars.com/blog/benefits-of-the-use-of-machine-learning-and-ai-in-
the-travel-industry/

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