Travel insiders have long wondered when, or how, Amazon might flex its muscle online to follow other retail giants And non-travel related brands in the sector.
Yet such speculation misses the company’s growing role behind the scenes of travel, primarily through Amazon Web Services, a subsidiary that provides on-demand cloud computing platforms and applications on a pay-as-you-go basis. use.
The importance of AWS to large enterprise operations was evident in a report on earnings this month when Amazon said revenue from its cloud unit beat analysts’ expectations by rising 12% year-over-year in the second quarter to $22.1 billion. Of Amazon’s $7.7 billion in operating profit, 70% came from AWS.
As the largest cloud provider in a field that includes Google Cloud and Microsoft, Amazon – through AWS – has a significant share in the travel industry, even without selling travel packages or booking rooms and flights, with cloud customers including Travel port And ATPCO.
Another is Trip.comwhich reported significant improvement in its airline ticket reservation system and significant cost savings after migrating over 400 of its international business microservices to AWS.
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This partnership has led Trip.com to develop a joint innovation lab with AWS, focusing on five topics: artificial intelligence, air travel, hospitality, international business and cloud technology.
“The Innovation Lab aims to make travel more accessible and provide the ultimate traveler experience, using the latest technologies, renowned experts and leading researchers from Trip.com and AWS,” said Chen Zhang. , Executive Vice President of Trip.com Group. the partnership was announced in April.
Meanwhile, Amazon said it has signed travel brands such as Lonely Planet and Ryanair to Amazon Bedrock, its service for building generative AI applications on Amazon’s cloud computing platform. In June, AWS built on that foundation by announcing a $100 million investment in a Generative AI Innovation Center to work with customers on building and deploying AI solutions.
To better understand the company’s business in the travel industry, we spoke with Massimo Morin, Global Head of Travel at AWS and a 25-year veteran of the travel industry. Our conversation has been edited for clarity and brevity.
I read that you said that travel “is an industry that thrives on complexity”. Could you clarify what you meant?
If you’re flying, for example, the whole system that you touch – to get your plane ticket, to get the reservation, to get to the airport – you might not realize (how much c is complex). Many of these systems still run on mainframes. … You have all these processes and procedures in place (with) the legacy technology behind the scenes … but its original purpose is no longer there. So they try to transform. The challenge for tour operators and airlines is this expertise. The first thing is to have people who know the new technology, but also to have people who understand the old technology – why did we do it this way? So that’s the complexity on which the industry lives. If you think about it, you book your ticket, you go to the airport, you get the reservation, you get the taxi, security, check-in, baggage, gate, plane, pilot, crew . You see, there are a lot of pieces that have to go well. And we usually don’t give them enough credit for the amazing work they do.
Can you give an example of how outdated technology affects the way companies interact with customers?
It even starts with very simple things (like) when you call an airline and spend countless minutes, hours, on the phone because they can’t actually transfer the call and they have to put you on hold. They can’t call you back and they can’t figure out who you are when you call and associate your phone number with your reservation. So they can say, “Hey, Derek is actually the caller. Let me call him back because he’s traveling in a month so he can (afford) to wait and I can (talk to) someone else traveling tomorrow.
They can’t do it (with legacy technology), but with modern technology like Amazon Connect, they can do it today. Technology allows you to prioritize queues. (And) you can get different types of assistance depending on your frequent flyer status or your expenses, etc.
How it works?
Companies like Delta Airlines and Priceline use our system called Amazon Connect. Amazon Connect is a cloud-based contact service system. You pay as you go, you increase it and you reduce it according to the needs you have. You can activate the data you have on your customer. You can do very simple things like phone recording. You can do sentiment analysis (and) convert voice to text. Now you understand if the customer is happy and what he is talking about (and) we can enrich the customer profile. When does he call? Why is he calling? What pain points did he experience?
At the same time, you can offload a large part of these activities to a chatbot, for example, and thus enable self-service. One of the challenges the industry faces today is that it doesn’t have enough manpower, or it’s not trained enough, or (if) it’s up to it of what it should be… it is very rare and an expensive resource. So offloading to chatbots is actually a win-win because it enables self-service (when) the next generation doesn’t want to talk to anyone. And then you make the agent’s life (easier) because now he only answers questions that really need his attention.
You also have Amazon Bedrock, which aims to help companies build generative AI applications on your cloud computing platform. Tell us about that.
Now, generation AI is kind of transformational for the industry, because there’s all this data that you want to make sense of and make it fit with the business purpose. The chatbot most likely uses models for customer engagement, conversation, communication in a much more natural way. So you type things like “Where can I go this summer?” and the system responds.
Now, for this model to work on a large scale, the (model has to) be trained, right? They must therefore be trained to test large amounts of data. So you must have two basic things. The first thing is that you need a machine to run the training so that when you ask a question you get the (correct) answer. The second thing is that you want to have access to the (right) model. Not all companies have all the expertise needed to create generation AI models. So we created a service, Bedrock, which provided access to these models. You select the model you want, and we have a variety of models that come directly from Amazon or other vendors that we support in the AI labs. We work like Switzerland – we make all these models accessible.
You can train them with your specific data. This is the key. One of the things you don’t want is when you’re training the model, (you don’t want) your data to go out to the internet. You want the data to be private for yourself and for your specific use of it. The second thing you want is that when you train the model, it is actually trained for your own use. So what we see is that we have to, because it’s so new, we have to educate our customers on how to do it. AWS therefore keeps the data safe, trains this model at scale, to supplement the data on which this model is trained with the company-specific data.
How does travel guide publisher Lonely Planet use the service?
They have no interest in using generation AI to write their guide. For what? Because what makes Lonely Planet different is that they have people at their destination. In Rome, you want someone who lives in Rome to tell you about Rome. They have no interest in using a machine, and they have no interest in sending someone from Wichita to Rome to do this thing. They are right. They tell us: “Our differentiating value is our content, but now I have to create a mechanism to consume this content in a much more accessible way.
That’s where generative AI comes in, because you can train the model, a model that speaks English, on what’s going on in Rome. Now you can request this model through a chatbot, right? What can I do in Rome? What could I see? Where could I go? If I want to go to the Colosseum, is there a timetable? When is it open? These are very simple questions that come to mind that you can find in a guide, but you don’t want to go through a book for that.
Lonely Planet is a company over 50 years old. One of the interesting challenges they face is that the new generation doesn’t read books. They prefer to interact digitally. So how do they (those customers) consume the company’s content much more efficiently? For me, it was a bit of an eye-opener on how the company that has the data, that has the content, is going to get the most out of generative AI and drive value for their own business.
Where do you see better technology taking travel companies next?
All of these companies want more data. But it’s all about making sure your house is in order, breaking down the silos, connecting all that data together, and leveraging it however you can. Now, when you want to start the journey, where do you start the cloud journey?
The first things you can look at are analytics. It is very low, low risk and high value. I have this data; I want to see what happens. Where does my customer deposit in my Buy Panel on my website? Do they buy all the products I have? If they don’t, why didn’t he buy the ticket? That’s the kind of stuff you can easily do in AWS.
Another thing is what would make the marketing campaign more effective. Should I send an SMS? Should I send an email? Should I send an app notification? I need to understand where the client is. These are the kinds of things that are very, very easy to implement. They are very, very low risk, but they help you understand the customer better and serve them better and, in reflection, improve your operation as well.
