An existential threat to suppliers and golden time for startups
Yes, there is a lot of hype around AI right now and some of us may have become immune or even cynical about it but you’d be wise not to, warned Chris Hemmeter, managing director of Thayer Ventures.
Opening his talk on “Gen AI and The Future of Travel” at WiT Africa in Cape Town, Hemmeter said, “I know we’re all getting a bit sick of it, a bit desensitised, and some cynicism building up – but I fundamentally believe it’s a once in a generation experience for all of us that is causing all kinds of dislocation and disruption across the travel value chain that will totally transform this industry.”
In so doing, he said it would create an existential threat for travel suppliers and enormous opportunities for entrepreneurs across the value chain.
The three phases of AI in travel: Discovery, agency, adaptation
Hemmeter categorized AI’s evolution in travel into three distinct waves:
- Discovery: AI is shifting the way travellers search for and discover destinations. Instead of relying on keyword-based searches, travellers now use conversational, context-aware queries.
“Generative AI is obviously completely transforming the way people discover travel. We used to start by typing in a few keywords and sifting through pages of results. Now, AI processes contextual, natural-language queries and delivers concise recommendations.”
- Agency: AI is beginning to act on behalf of users, handling complete booking processes. Early experiments, such as OpenAI’s Operator, demonstrate how AI can finalize transactions without human intervention.
“We’ve seen early signs with Operator. It’s the beginning of something where AI can complete the entire booking process.”
- Adaptation: AI will evolve beyond traditional personalisation, dynamically adjusting recommendations based on user context in real-time. Travel suppliers will need to integrate AI with their CRM systems to stay competitive.
“Forget personalization. We’ve talked about it for 15 years, and it doesn’t work. The future is adaptation – learning from user behaviour in real-time and adjusting dynamically.”
AI’s role in travel planning and booking
The integration of AI into travel planning is already accelerating, with 70% of US travellers reporting that they plan to use generative AI in their trip planning.
“Not that they’re booking,” Hemmeter clarified. “But in the way they’re planning and thinking about travel. That’s a fundamental change.”
AI-powered tools are also changing the way travellers receive recommendations. Instead of endless lists of search results, AI now delivers a few highly relevant, curated suggestions.
“LLMs typically provide three or four recommendations, rather than pages of search results,” Hemmeter noted. “This means travel suppliers must ensure their data is structured correctly to be included in AI-driven recommendations.”
“This is the most exciting time to start a company in the history of this industry, because of the transformative power of this technology. And this is not just about selling travel – it’s about the entire value chain,” said Chris Hemmeter at WiT Africa 2025
Challenges and opportunities for travel suppliers
For travel suppliers, the shift from keyword-based search to AI-driven discovery requires a new approach to content strategy.
“Getting your data right so that LLMs find you and understand you is as easy as just enhancing your FAQs, making your answers more lyrical, and changing the content of your website so that it’s more complete,” Hemmeter advised.
A new wave of startups is emerging to help travel brands manage and structure their data to remain competitive in AI-powered search and recommendation systems.
“Bonafide (one of Thayer’s portfolio companies) is a stealth company working on orchestrating data between travel suppliers, locations, DMOs, and the LLMs,” Hemmeter said. “They understand the construct of how to manage data to stay visible in an AI-first world.”
AI-driven discovery has the potential to level the playing field for independent hotels and small operators. However, the challenge remains that many boutique properties lack direct booking capabilities, potentially reinforcing the dominance of Online Travel Agencies (OTAs).
“In a world where context matters, there’s a chance for small chains and independent hotels to get recommended if they structure their data correctly,” Hemmeter explained. “That’s a democratization for boutique supply.”
Golden time for entrepreneurs: B2B, the hidden opportunity
With AI rapidly reshaping the industry, Hemmeter sees this as the perfect time for startups to enter the space.
“This is the most exciting time to start a company in the history of this industry, because of the transformative power of this technology,” he said. “And this is not just about selling travel – it’s about the entire value chain.”
Successful startups must be deeply engaged with the market and avoid building solutions in isolation.
“The most important thing for any startup is: don’t do it in a closed room. You want to get out and engage with the marketplace,” advised Hemmeter.
While consumer-facing travel tech startups get most of the attention, Hemmeter emphasized that the majority of investment opportunities lie in B2B solutions that power the industry’s backend operations.
“Seventy percent of our investments are in B2B businesses,” he noted. “The real opportunities lie in the underlying infrastructure that supports the travel ecosystem.”
The future of travel: Identity and individualization
AI is moving beyond personalization towards hyper-individualized travel experiences. The future of travel will be shaped by AI’s ability to understand user identity and provide uniquely tailored recommendations.
“We’re moving through this incredibly complex world of agency to adaptation, and then ultimately to identity-driven individualization,” Hemmeter said. “This transition is fundamental and earth-shattering.”
