Traveler Technology Study: The State of AI with Carroll Rheem

[00:00:01.440] - Intro

This is Brand USA Talks Travel, elevating the conversation about international travel to the United States. Here's your host, Mark Lapidus.

[00:00:09.300] - Mark Lapidus

You know how people say time flies? I can't believe this, but you and I have known each other now for over 10 years.

[00:00:15.520] - Carroll Rheem

It has been quite a while, hasn't it?

[00:00:18.320] - Mark Lapidus

You started your career in hotels, but I don't think I ever asked you why you moved into research.

[00:00:23.230] - Carroll Rheem

So when I was at Starwood, I was managing all of the OTA relationships. It was very much kind of in the sales and marketing world, and what I found that I enjoyed the most about that job was really digging into the analytics and understanding what was driving growth, what was driving success, what was driving people's behavior. And I would always ask these questions, "Well, why are they doing this? Why are they doing this?" And no one can give me the answers, and so I finally decided that that's what I wanted to do, and that's what really attracted me to research.

[00:00:53.780] - Mark Lapidus

If you work in the travel industry, you no doubt recognize that voice. I'm so glad to welcome back Carroll Rheem to the Brand USA Talks Travel podcast. Carol is the Founder and CEO of iolite group. Before that, Carroll was VP of Research and Analytics at Brand USA, and of course, that's how I know her. And she's held roles just as we talked about at Starwood Hotels and Resorts and spent many years at Focusrite as well - and I know that because I accompanied her to many a Focusrite convention where she had a lot of friends, and I always enjoyed this. So today we're going to dive into a new study that Carroll has conducted, but before we get into that research, Carroll, remind our listeners about the work that you do with your agency.

[00:01:31.440] - Carroll Rheem

Sure. So iolite group is a strategy and insights firm, and we're very focused on long-term global sustainable strategy, and really digging into topics that are sort of new and lesser known. So we don't often do our own research, but we do dive into it when we feel like there's an opportunity to gain some new knowledge and to share that with industry.

[00:01:54.590] - Mark Lapidus

So if any of our listeners are interested in pursuing a research study, that's a conversation you'd like to have, correct?

[00:02:00.650] - Carroll Rheem

Always.

[00:02:01.270] - Mark Lapidus

I suspected you'd say that. iolite recently released a study called "Traveler Technology: the State of AI." What were the objectives, Carroll?

[00:02:09.930] - Carroll Rheem

I think we are now at the real turning point of AI becoming mainstream - generative AI - and people really turning to these platforms to support their travel planning process. So this study was designed to really understand everything around that new touchpoint. I think about it as a new moment of truth. It's a new channel that all of us as destination marketers really need to think about, and so we wanted to understand everything about it. What people like, what they don't like, their preferences, what they hope to see in the future, and what their purpose is in using all of these new tools that have become available.

[00:02:50.220] - Mark Lapidus

When you prepare a study, I'm sure you likely try not to have preconceived notions about an outcome. But that being said, you likely had some thoughts about what might come back.

[00:02:59.630] - Carroll Rheem

Sure, I definitely had some hypotheses; I think it's impossible not to when you're thinking about a topic that's interesting. But for me, this was a particularly exciting opportunity because - you went through my history, right? I came from Focusrite, it was a very innovation and technology-focused research company. And then I went to Brand USA, which is all about destinations, and honestly, it's a pretty low-tech sector of the industry. A lot of it is a little bit old school; it's about, you know, tried and true trade connections and things like that, so it's really kind of stepping away from that world of focusing on tech. So when I think about destination marketing and AI, this is really the first opportunity where my two worlds come together. And so I was thinking about, okay, well, what are people going to want to do when they use AI? And immediately my gut told me, destination decision support.

[00:03:56.580] - Carroll Rheem

Right? Because that's what the Internet doesn't do very well, and that's where AI can really shine, and so I suspected going into this that when we asked people what they want to do with AI, it's going to be about destinations. And that did bear out, I was right.

[00:04:09.940] - Mark Lapidus

Yeah, I think most people would think that; I mean, that's what we all use it for, right? So it's logical.

[00:04:14.640] - Carroll Rheem

Yep. It was great to see, and it is really fun for me to focus on my two sort of core areas of research for the past 20 years.

[00:04:23.620] - Mark Lapidus

Your study divides travelers into early, mainstream, and late adopters of AI. So tell me about the difference of those groups and their distinct attitudes toward the use of artificial intelligence.

[00:04:34.090] - Carroll Rheem

I mean, it's really instinctive, right? We know people who are the sort of tech geeks who run out and buy every new contraption they can get their hands on. They're the first ones to try a new site or a new app. And then we have the mainstream people, who kind of watch what those people are doing, and then when it feels like it's more reliable and less risky and you can count on it, that's when the mainstream comes into play. And then the resistors are kind of hesitant, and it's a little bit more of an attitude like, "if it ain't broke, don't fix it," right?

[00:05:03.890] - Carroll Rheem

Like, "Why should I get something new when what I have works perfectly fine?" So it's not that they necessarily hate technology or feel full of it, it's more just, "It doesn't get me excited and I'm not that into it."

[00:05:14.800] - Mark Lapidus

Is there an age divide in that?

[00:05:16.500] - Carroll Rheem

As you might expect, yes. So young people definitely skew towards being on the earlier side of tech adoption, and older people tend to on the later side of it. But I think what's interesting is we think about the middle and the attitude that the mainstream has. It's generally very tech-positive. Even if they're not going to be the first to run out and get a new piece of technology, they generally have a great deal of trust. Because when we think about the generations and the sort of start of the digital age, Gen X and middle aged people are very comfortable with technology. And that's not something that we saw kind of in the earlier 2000s.

[00:05:53.090] - Mark Lapidus

Carroll, did you find anything you didn't know about bleisure travel or remote work travel?

[00:05:57.610] - Carroll Rheem

Well, it's just interesting to see how it all connects, and it kind of makes sense that early adopters would be the ones who do a lot more of this sort of leisure - I call it workation, where you're not taking time off from work but you're going somewhere and you're just hanging out.

[00:06:14.510] - Mark Lapidus

I like that one very much. Workation, I don't think I've heard before. It's cute.

[00:06:18.530] - Carroll Rheem

One of my favorite types of trips to take, honestly. When you own your own business, you're also never really on vacation. But it's a really interesting blend, and so work, home, vacation, all of this sort of blends together, and technology is what enables that, right? Because they can be in the office and do everything that they would do in the office when they're traveling, and that just enables a different kind of lifestyle.

[00:06:41.490] - Mark Lapidus

You know, as I talk to my friends about AI used for travel, they seem pretty skeptical. Did you find that in the study?

[00:06:47.790] - Carroll Rheem

Yeah, I mean, it has a long way to go. And I think a lot of it has to do with this sort of paradox that we have where we get creeped out when companies and apps and tools that we use know too much about us, because we value our privacy - but then when it doesn't know things about us, it's not particularly useful or specific to what we want. And so we have to give it all that information, and that tediousness, right? If you start using a chatbot to say, like, help me plan vacation, it's gonna ask you a million questions, "Well, what do you like? What do you want to do?" And it needs to know these things. And that process is tedious, but you also don't want it spying on you and knowing all of those things before you tell it to them. And that's probably the most fundamental challenge to using AI at this point in time.

[00:07:35.090] - Mark Lapidus

How do you feel about standalone branded AIs from companies? For example, Expedia may have one, then there's TripAdvisor, Priceline might have one. And of course we have more general use AIs like ChatGPT or Claude. What do you think will get the most use?

[00:07:49.070] - Carroll Rheem

I think there's an appetite for all of the above. Once you're used to that sort of interaction where you're chatting with AI, whether it's happening directly on OpenAI or it's within the world of, you know, your office suite, right, you're using AI Copilot in Word, and then you go Google something and then you're interacting with Gemini. It happens, even if you aren't conscientiously saying, "I'm going to go use AI right now." It's being so integrated that I think it's going to be more of just a layer expectation on all of the digital interactions we have, rather than a very separated, deliberate, kind of walled-off part of the Internet.

[00:08:29.250] - Mark Lapidus

Speaking of separated, it seems like a lot of people might be doing research on AI, but then booking somewhere else.

[00:08:35.300] - Carroll Rheem

For sure. And you know, I think this is part of the reason why there's so much interest in destination support, because the bottom part of the funnel, right, when they get to booking, that was taken care of first by the Internet, and taken care of very well, right? People know how to an airline ticket, people know how to book a hotel room. That's not hard for them. What's hard for them is deciding where to go. And so I don't see a ton necessarily changing there because people have some loyalty, like if you belong to Marriott Club or Bonvoy or whatever it is, you know, people have their own loyalties and their own processes and they're a little bit more resistant to change that. But with the advent of agentic AI, right?

[00:09:16.020] - Carroll Rheem

So more and more we're going to see AI being like, "I can go shop for you and I can show you this, and if you're ready to book, I can take care of that for you." That's the next step, and we'll see how quickly people adopt that. But it's not quite the same as like, you're giving your credit card information to this AI thing that's going to go buy all this stuff and do it for you. It's very permissions-driven. You have a chance to review, you have that final book, and I expect that to continue for quite some time.

[00:09:45.680] - Mark Lapidus

All right, so give me a few answers that I haven't asked you of questions that you found particularly engaging and interesting.

[00:09:51.730] - Carroll Rheem

Well, one of the things that I always do before I dig into something specific is try to get the context words, and when we think about how people are using AI, I wanted to understand: this far into online travel, how set are people in their ways, right? Because we have so many successful online travel companies that have been doing this for so long. Do people have their favorites? Do they even feel like they need help? What is the situation? And one of the things that I found most startling is how few people have a travel planning routine. So only about 11% of travelers said that they typically plan their trips the same way every time. And that was mind boggling to me, right? Because so many people are like, "Well, yeah, I usually book with Expedia or I usually do this," but it's not a routine for them.

[00:10:42.107] - Mark Lapidus

Wow.

[00:10:42.170] - Carroll Rheem

They meander, they go all around. And what drives that change? It's like you would think, keep it simple; if you know you like this booking site, just keep using it. Why do you go all around the Internet searching for information? What's driving this? Part of it is that they enjoy the process, they enjoy dreaming about their trips. Another part of it is just anxiety, because it's so important to us. We're spending so much money, we're spending our precious vacation time on it, so we want to make sure we're finding the best trip for us. And so we feel like we need to do this legwork, this due diligence to make sure we're doing it right. What is super interesting to me is how even though we're such a mature industry in the online travel space, how ripe it is for change, and how quickly people are going to glom onto something that helps them accomplish what they're trying to do more quickly and easily.

[00:11:33.640] - Mark Lapidus

Seems logical that there'd be a better graphical interface than most AI. Right now, we're mainly text-based; we ask a question, we get a bunch of characters back, not necessarily imagery or video.

[00:11:44.280] - Carroll Rheem

I think it needs to, especially if it's going to support travel, because so much of it is visual. There's only so much you can do. But if you say, "I want to go to a beach," and then it might list out some beach destinations for you, you're like, that's great, but I need to see it. I want to see the color of that sand, I want to see the color of that water, and that's important to me. So I think as part of the response, when you get the prompts back, like you send the question or whatever you want, and as it returns results, hopefully we're going to see more of a visual. And like, I think now there's a lot of thumbnails that might kind of pop up and things, but I think that visual component - especially for travel, maybe not so much in other arenas - but for us it's going to be very important.

[00:12:28.950] - Mark Lapidus

Was the study strictly domestic or did you have international input?

[00:12:32.520] - Carroll Rheem

This one was just domestic.

[00:12:34.280] - Mark Lapidus

And do you think there's going to be a difference as you start to do this around the world?

[00:12:37.990] - Carroll Rheem

What's interesting to me is over time, the differences in adoption of technology are getting smaller and smaller and smaller. So in the beginning of online travel, the U.S. was several years ahead of Europe, for example, on tech adoption. Primarily booking travel online, things like that, it was probably a two to three year gap. And every time there's a new technology, it just gets shorter and shorter and shorter. And so I expect this to be virtually similar in different places around the world. I think one of the factors that will determine how quickly it happens is the quality of translation, and just some languages aren't going to have the breadth of content or as strong of a translation connection with English, which is kind of the predominant language that a lot of these models are built on. So I think that might bring some variation more than consumer willingness to use it.

[00:13:35.230] - Mark Lapidus

Are there some questions you wished you had asked that you did not ask?

[00:13:38.890] - Carroll Rheem

I always wish to have more space, but, you know, I think we did a pretty thorough job. A lot of the questions I have are around hypotheticals, right? So things that are really difficult for people to answer until they sort of see it in front of them. But I love asking people about what they wish it could do for them. Unfortunately, they don't often have a lot of imagination. You kind of have to show them things and they can react to it or give them an option. They'll be like, yeah, that sounds good, but unfortunately they're not going to come up with the great ideas for you.

[00:14:11.380] - Mark Lapidus

The next obvious question, Carroll, is what do we do with this?

[00:14:14.230] - Carroll Rheem

Sure. I think there are a lot of really important implications for all travel companies, and especially destination marketers, when we think about how people use the Internet today, right? We're so used to going to search and then search points us to places and we go to websites. And a lot of us have kind of built our infrastructure of how we operate around that, right? Think about how important SEO has been, how much your search budget is, and the whole world of managing your keywords and all that. So operationally we really have to change. And what's also going to be interesting is the way that agentic AI is going to change things.

[00:14:53.510] - Mark Lapidus

Maybe you should explain that a little bit for people. You're talking about agents now.

[00:14:57.200] - Carroll Rheem

Right. So rather than just living in its own sphere now, the next sort of step for AI is for it to interact on your behalf with the Internet. So one of the big challenges early on was just these issues of inaccuracy and hallucination where, because generative AI is literally making things up, it doesn't always get it perfectly correct. And in the world of travel, especially when you think about live pricing, that's just unacceptable. It just becomes really useless if it's not accurate. So now that they've built this of next layer of interaction, instead of it generating what it thinks the pricing might be based on data it's been trained on in the past, it can go out live and query for you and go to different websites and do your shopping online for you to peruse with real time pricing. And that is a huge advancement forward, and really works around some of those accuracy issues that we've seen in the past. So with that, what we might see, and we're actually already seeing: website traffic going down. Because AI is reaching out and summarizing the information that you have and surfacing that without people having to click through to your website.

[00:16:10.080] - Carroll Rheem

So it's really hard for you to understand that, well, in our world where we're not really transactional, typically on the DMO side, that's fine, right? That's great. Share my information. As long as you're consuming it, that's wonderful. But then we lose the ability to track, and we don't know how often, and there are mechanisms now that are being developed to track citations, because they do offer links very often and the sources for where they're getting that information. And so in the future that's going to be really important for us to track to understand sort of the life that our content has. And that's going to be, ultimately, how you measure the value of your websites, right, because you need to understand how often you're getting in front of people. Unfortunately, that means you don't know anything about that. You lose all the analytics that you would normally get. Like there's no cookies, there's no nothing.

[00:16:58.120] - Carroll Rheem

So that's huge in the way that we have to change the way that we operate in the digital space because of it. Thankfully, there are a lot of new tools that will be coming out to sort of help address some of those challenges. But there are, you know, there are a lot of implications, I think, for that, and it's hard to know, you know, I think a lot of people's initial efforts in the AI space have been around, "Okay, I need to introduce a chatbot. I need to train some AI models on my content." But I think now we really need to think externally about AI platforms in general, and especially when you think about Gemini, because search is such an important part of the travel planning process. So how people are going to be using Gemini and just naturally, without intention, interacting with Gemini AI syntheses of results and information, understanding that and how to manage around that is going to be critically important.

[00:17:56.910] - Mark Lapidus

I've actually been thinking about this for quite some time, because as you know, along with our TV network, I also work on all of our websites at Brand USA. And if we don't have the analytics to prove how powerful the websites are, we're then relying on how important the content is to an AI agent, and we don't have any guidance about that yet. How do you think that's going to happen?

[00:18:16.340] - Carroll Rheem

Well, there are absolutely new companies that are about to be launched and in the process of being launched. I have had the privilege and pleasure of working with a company called Bonafide, who specifically has designed a platform to understand what gen AI platforms around the world are saying about your product or your brand, and also understanding kind of the decision factors of when they're recommending you, why they're recommending you, who else you're competing against for that recommendation, and a whole host of other things to really help you do a few things. One, understand what's happening, right? So what is being said? What are these AI platforms saying about your destination? Two, where are the gaps? Where are you underperforming compared to your comp set? So maybe there just isn't enough content out there about your family-friendly activities, right? And so when you can see that, you understand, like, "I need to go build some content around this so I can help these AI platforms know this about my destination." So it can help you identify those gaps and then ultimately push things back out through connections to the source data platform. So sometimes these AI platforms are scraping the Internet on their own.

[00:19:33.730] - Carroll Rheem

Sometimes they're using source companies who really are sifting through the bogs of the Internet - there's so much junk out there, right - to really make sure they have clean, reliable data sets. And so they're working with those companies well that feed AI engines, because they don't want to spend their time doing that. It's a really important function that I think it's going to serve, and I think they happen to be the company that I'm working with. I imagine there are other tools in development that will do sort of similar things. I think what Bonafide does is they really focus on building those connectors so you have that full thing, so you understand what's going on and you can do something about it. I think that's really key, is that it's actionable.

[00:20:17.270] - Mark Lapidus

I can't wait to learn more about that. So how do people find the study, Carroll, and how do they work with you?

[00:20:22.580] - Carroll Rheem

This study is not yet published from the perspective of the DMO side. Focusrite has published its own sort of version more holistically about travel technology, not specific to AI but just sort of in general, so that's available on the Focusrite site. I will soon be releasing a video that just runs through some of the key highlights from NTMO perspective. But since I'm not a research company and I don't have a publishing arm, it's not like really a report you can purchase. Because we are primarily an advisory firm, what we do is leverage this research to provide advisory services to our clients.

[00:21:02.980] - Mark Lapidus

Okay, before we wrap up, if you had to give one piece of advice to somebody working in a travel company looking to implement AI, what would you tell them?

[00:21:11.370] - Carroll Rheem

Act like a consumer and use AI as much as possible. Kick the tires, experiment. Ask it all sorts of wacky questions, and ask it about itself. It can tell you a lot. It can tell you why it's telling you the things, it's telling you where it's getting information from. And really just geek out on it, because there's so much to learn, you don't need any sort of tech or coding or any special qualification. Just kick the tires, go out there and experiment and learn.

[00:21:41.460] - Mark Lapidus

As always, Carroll, it's been a pleasure speaking with you. Thanks for taking the time today.

[00:21:45.450] - Carroll Rheem

Thank you for having me.

[00:21:46.830] - Mark Lapidus

And if you enjoyed this episode, I encourage you to listen to an episode I did with Carroll about iolite's multicultural study. As I review the metrics for the podcast, I am very pleased to see that a lot of things in our archives get listened to long after we record them, so I hope you go back and listen to that episode. That's it for today for Brand USA Talks Travel. I'm Mark Lapidus, thanks for listening.

[00:22:08.420] - Outro

Your feedback is welcome. Email us at [email protected] or call 202-793-6256. Brand USA Talks Travel is produced by Asher Meerovich, who also compares composes music and sound. Media producer, Nthanze Kariuki, with assistance from Casey D'Ambra. Engineering Brian Watkins and Kat Pommer. Art by Mimi Jung. Please share this podcast with your friends in the travel industry. You may also enjoy many of our archived episodes, which you can find on your favorite podcast platform. Safe travels!

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