I’ve never been more excited about anything at Salesforce, maybe in my career – Marc Benioff (referring to Salesforce’s AI tools)
Forget virtual reality, the next big thing is physical reality – Greg Isenberg
As artificial intelligence reshapes how travel is planned, booked and sold, there is also a renewed focus on real, face-to-face connections. The beauty of the travel industry is that both trends provide powerful drivers for growth.
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The most clicked link in Travel Tech Essentialist #157 is Jose Luis Vilar’s adaptation of MrBeast’s play for the airline industry: MrBeast’s aviation manual.
This article Author: Sequoia highlights how generative AI evolves from “fast thinking” (pre-trained responses) to “deep reasoning” (reasoning time calculations). This shift enables AI to “stop and think,” creating smarter applications that can reason in real time.
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Models like OpenAI’s GPT-4 and Google’s Bard provide fast, pre-trained responses that are ideal for everyday tasks that require speed, such as answering questions or generating content.
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Slower, reasonable responses from models like OpenAI’s o1 (Strawberry) take time to compute. They simulate possibilities before making a decision, which makes them ideal for solving complex problems like strategic planning or dynamic travel itineraries.
As artificial intelligence reasoning capabilities continue to expand, a new wave of agent applications is bound to disrupt various industries. The big question is: Who will build the first billion-dollar AI-powered travel app that combines fast thinking for everyday tasks and deep reasoning for complex decisions?
Marc Benioff (Salesforce founder/CEO) said he has never been more excited in his career, citing the potential of Salesforce’s new artificial intelligence platform Agentforce. He believes this will drive a change as significant as the cloud, mobile and social revolutions.
At Dreamforce 2024, 10,000 customers tested Agentforce, and Benioff predicted that more than 1 billion AI agents will be running on it within 12 months. He believes this new AI can be a game changer for industries such as travel, healthcare, media and financial services by automating complex tasks and improving customer experience, productivity and revenue. Benioff contrasted this with Microsoft’s approach, saying Agentforce is exactly what artificial intelligence is. He criticized Microsoft’s artificial intelligence product Copilot, comparing it to Clippy, Microsoft Office’s virtual assistant from the 1990s, which had a reputation for being unhelpful and intrusive. Read+.
This agency revolution is real and as exciting as the cloud, social, and mobile revolutions. It will deliver a level of transformation we have never seen before. We are in a truly incredible moment. — Marc Benioff
Last week’s All-In podcast episode discussed Uber’s possible acquisition of Expedia (episode). Chamath Palihapitiya dismissed the idea out of hand as “stupid,” arguing that paying $30 billion for a UI layer based on permissioned public travel data would be dangerous in an era when artificial intelligence threatens to upend the traditional OTA model, noting that Perplexity’s The new direct booking feature is evidence of this threat.
David Friedberg outlines the bullish case, which focuses on financial synergies. Expedia spends $8 billion annually on marketing, and while Uber has 150 million monthly active users, the deal could double Expedia’s EBITDA by lowering marketing expenses by about 30% (to cross-sell to Uber users) and cutting costs. One time, reaching 6 billion US dollars. An enterprise value of about $22 billion (after accounting for Expedia’s cash) could make it an attractive four times EBITDA multiple.
David Sacks offers a product-centric critique that MBA-style cross-selling thinking ignores user behavior. He points out that Uber’s success comes from instant gratification (you want a ride now, you want food now) rather than the long-term nature of vacation planning.
Jason Calacanis points out that Uber CEO Dara Khosrowshahi’s experience as a former Expedia CEO and current board member adds an interesting dimension because few people know Expedia as well as he does. He highlighted VRBO’s potential under Uber’s leadership and Uber’s success with proximity services like Uber Eats.
They point to three possible futures: the rise of do-it-all super apps, the continued dominance of specialty apps, or AI agents becoming the new intermediaries for travel bookings, making traditional OTA interfaces less valuable.
Similar to Chamath’s concerns about AI disruption, Peter Syme believes that OTAs will continue to grow but their value will decrease as AI agents change the way people book travel. In the future, users will completely bypass the OTA interface and rely on artificial intelligence to handle bookings. This shift will reduce the importance of OTA user experience and cyberspace as AI will prioritize data, making OTAs just another layer in the process. In addition, hotels, airlines and other suppliers will increasingly bypass OTAs and go directly to customers through AI agents. Therefore, OTAs need to shift from aggressive growth to a defensive strategy to adapt to this AI-driven world or risk losing relevance. Read+.
Far fewer people will visit your website. More robots will visit your website. — Peter Syme
Alex Bainbridge (Founder/CEO of Autoura) also talked about the growing role of artificial intelligence in the tourism industry in his analysis of Uber + Expedia. Traditionally, Uber and Expedia have found success through high-frequency trading (but Uber more so), but the rise of AI agents and self-driving cars is changing that. AI agents can book directly to hotels, bypassing OTAs such as Expedia, while Uber has transformed from a service provider of self-driving car platforms to a retailer. Bainbridge believes Expedia must innovate around artificial intelligence to remain competitive, weakening its position as a possible target for Uber. Instead, he believes Amazon is a more suitable buyer. Amazon can leverage AI technologies like Alexa and Zoox robotaxis to create integrated travel experiences, making Expedia a valuable addition to its ecosystem. Read more.
Terrell Jones (Founder of Travelocity and Founding Chairman of Kayak.com) shared important entrepreneurial advice in his recent post, focusing on the main reasons why startups fail. Here are his first three:
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no market need. Jones highlights that 47% of startups fail due to lack of demand. Entrepreneurs often develop products based on personal problems without market validation. Prototyping, testing, and proving requirements before submission and launch is critical.
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money ran out. Poor financial management is another common cause of failure. He advises frugality and the need to pivot quickly if a product isn’t gaining traction.
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wrong team. He emphasized the critical role of having the right team. Founders should hire based on skills and passion, not friendships, and focus on building a core team of “A”-level employees.
in a Past NewslettersI wrote about how in-person events are making a comeback. This Wall Street Journal article Corporate group travel also confirms this trend. Companies are prioritizing face-to-face meetings to enhance team cohesion and business connections. Hotel revenue from group bookings (bookings of 10 or more rooms at a pre-negotiated rate) increased 6.8% in the first eight months of this year compared with the same period in 2023, outpacing inflation and revenue from small groups and individual travelers, The increase was smaller than 1%.
Fortune 500 companies are driving this growth, booking meetings and retreats to enhance face-to-face interactions. Hotels like the Omni and Ryman are benefiting from this trend and a slowdown in new development of large hotels, as rising interest rates in recent years have made financing large projects difficult. Although occupancy rates have not fully returned to pre-pandemic levels, demand is expected to be strong through 2027.
Greg Isenberg points to rising searches for ways to meet people, pointing to a renewed interest in in-person socializing. It’s somewhat ironic that people are turning to technology to relearn basic social skills. Maybe the next big app will teach us how to chat at parties and remind us to “wink and nod.”
Uri Levine, founder of Waze and other startups, shares his insights What not to do when pitching to investorsdrawing on his personal experience as well as data from Marc Andreessen and other venture capitalists. Given the fierce competition for funding (only 1% of startups successfully raise funds), Uri says here are 7 common mistakes to avoid:
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Avoid generic emails. Personalize your contacts with investors
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Don’t rely on AI-generated impersonal emails
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Show genuine interest by tailoring your pitch to specific investors
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Keep it short. Skip the coffee invitation and focus on the key points in paragraphs 2-3
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Provide key information early. Pre-include presentation or video
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Make sure your pitch is simple, clear and concise
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Respect “no”. Only follow up when significant changes occur
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