AIVG case study.pdf

AIVG Effortless voice guide in your language Adam finished reading the market research and was in disbelief. He was so confident that his AIVG digital solution would change how travelers visit a place and learn about local...

AIVG Effortless voice guide in your language Adam finished reading the market research and was in disbelief. He was so confident that his AIVG digital solution would change how travelers visit a place and learn about local history and culture. With AIVG, tourists can scan QR codes and listen to the history of tourist attractions in their native languages. On the other hand, AIVG also helps destination marketing organizations (DMOs). DMOs can review and edit voice content in many languages in no time because AIVG incorporates AI to generate content. Yet, the market research showed that DMOs were not impressed by AIVG and had a low willingness to pay for AIVG. Adam was frustrated with the harsh reality, but he was a fighter. He will revise his business plan and find a future for AIVG. DMOs Destination Marketing Organizations are entities responsible for promoting tourism to a specific destination. DMOs create and maintain their destination image as an attractive place to visit. Some DMOs host visitor centers, coordinate tourism stakeholders, conduct market research, and serve as tourism industry representatives. DMOs obtain financing from governments, tourism taxes, or industry members. Over the years, DMOs have become more and more focused on digital marketing, with over 70% of DMOs considering their marketing mix to be mostly digital. The research found that 85% of DMOs have upper-funnel marketing activities, 51% have lower-funnel activities, and only 18% have in-trip marketing activities.1 Because DMOs do not sell their own tourism products, DMOs pay less attention to the conversion and retention stages of a customer journey. DMOs raise brand awareness through creative execution, where content plays a key role. DMOs generally spend 20-40% of their budget on content development and the rest of the budget on paid media. Among paid media options, DMOs almost all deploy social media advertising and search engine marketing but stay away from new channels such as in-game advertising, in-app advertising, digital audio advertising, and connected TV advertising.1 DMOs’ paid media spending may suggest their uneasiness with new, yet-to-be-tested channels and formats.1 Digital travel guides are a popular content type. These travel guides suggest popular attractions and hidden gems to tourists who have already decided to visit. Facebook, Instagram, and TikTok are the three dominant social media platforms. Short-form videos have risen in popularity. DMOs prefer native advertising or sponsored content (94%), display and video advertising (85%), and in-stream video advertising (78%).1 Conversely, branded social filters or sponsored hashtag campaigns were less important.1 DMOs’ top concerns about Digital Marketing are producing highly engaging content, demonstrating clear KPIs or ROI, achieving content/brand engagement, volume of content creation required, limited capacity of the in-house digital team, and growing content formats and variations.1 1 The Product AIVG uses AI-powered technology to capture public data and generate a brief description of a point of interest (POI) (e.g., tourist attractions, monuments, buildings). This description is inserted on an online interactive map, which can be integrated into the DMO’s website. The creation process takes less than one minute. Tourists access the map on the website or scan a QR code near an attraction to access the description and read or listen to the description in their preferred languages. For DMOs, AIVG is timesaving, because POIs are inserted automatically (or manually) from the system, and their text content is automatically generated with AI. DMOs can then revise this content if necessary. With AIVG, DMOs are able to promote their tourist attractions, businesses, hotels, museums, itineraries, and any other places easily and in no time. The Business Model Adam considered two business models, including direct-to-tourist (B2C) and direct-to-DMO (B2B). A direct-to-tourist, or B2C, business model will require enormous resources to build brand awareness among tourists. Tourists can pay to download the app and spontaneously create different AI content as they wish. The direct-to-DMO, or B2B, business model provides DMOs with the AIVG platform and charges a subscription fee. DMOs use AIVG to create and edit content, pin the content to the maps, and place QR codes around attractions. Since DMOs are concerned about producing highly engaged content and the volume of content creation required, AIVG can make DMOs’ lives better by saving them time to create content. 2 Direct and Indirect Competitors Tours and activities is a fragmented industry mainly consisting of small and medium enterprises. The industry has become more digitalized during the COVID-19 pandemic. Furthermore, there are platform companies offering tours and activities companies to list their offering and accelerate the digital transformation. Nevertheless, even the well-known platforms control less than 5% of the market share each. Investors are interested in this vertical; for example, in 2023, tours and activities was the front-runner in travel venture capital funding. Klook and GetYourGuide raised $ 210 million and $ 85 million, respectively. Both platform companies sell tickets for tours, experiences, theme parks, and transport.2 Some startups focus on travel guides or audio tours. FreeGuides uses its AI-driven platform to consolidate traditional travel guides into a QR code-driven solution and provide guests with local experiences and hotel information. FreeGuides works with hoteliers and integrates self-guided local tours, recommendations, and hotel services into one platform.3 Another startup, WeGoTrip, offers thousands of audio tours created by destination experts in more than 250 cities around the world. Tourists purchase the audio tours from WeGoTrip and download and use the audio guides on-demand. In 2024, WeGoTrip announced offering customized tours created and voiced by generative AI. The company will use ChatGPT, Llama and other technologies to plot a step-by-step route with photos and a human-sounding voice-over narrative. WeGoTrip staff will review the content for accuracy and send it in 48 hours. Each tour is € 35 and can be used by up to five people.4 Tailbox is another startup using generative AI to create personalized tours. Tailbox works with local agencies to build up data for specific areas and aims to help tourists discover hidden gems. Tailbox wants to provide real-time AI-generated narrative for a truly personalized experience.5 Nevertheless, Google Maps and travel influencers already provide abundant information about tourist attractions and tour planning. The launch of ChatGPT 4.0 is able to interact with users and provide information in voice. Market Research On behalf of AIVG, EHL Hospitality Business School conducted a small market research with ten representatives from DMOs and tourist attractions. Overall, DMO representatives stated that AIVG does not seem to respond to a real need. Some representatives had a similar solution but were not happy with the solution, while other representatives did not have any solutions. Overall, representatives saw the available solutions as being time-consuming. 3 Figure 1 What is your opinion regarding the usefulness of AIVG for tourism professionals? Figure 2 Advantages offered by AIVG to tourism professionals (0=not at all; 5=absolutely) 4 Figure 3 What is your opinion regarding the usefulness of AIVG for visitors and clients? Figure 4 Advantages of AIVG for visitors (0=not at all; 5= absolutely) Figure 5 Which visitor category will use AIVG, in your opinion? 5 Figure 6 How much are you willing to pay for AIVG? Figure 7 Please evaluate AIVG's features. 6  Figure 8 Importance of AIVG's Features (1=not necessary at all; 5=absolutely necessary) Representatives believed that travelers may be interested in AIVG if the provided content is personalized. DMO representatives also provided written feedback to elaborate their observations and suggestions. Qualitative Market Research Results Respondent 1 Think about APIs. Respondent 2 We are in the old world, that of the old-fashioned map that is being digitalized. But this no longer corresponds to current needs. The potential customer doesn’t have the time, the desire, or the need to surf and stroll around to choose his spot(s). Respondent 3 Watch out for the competition. This type of interactive map/app already exists. Respondent 4 The solution seems interesting, but a lot of work still needs to be done on targeting, connections with existing SITs, information on costs, and SWOT of AI in tourism that must tend towards the personalization and authenticity of content and experiences and not towards the anonymization of content and its sources. Respondent 5 To create real added value, the solution must go beyond an audio guide with a computer-generated voice that reads a general text. Content such as augmented reality (e.g., what the building once looked like), visualization with short video clips, etc. Storytelling (not only by point of interest but over the entire visit), gamification, etc.. Respondent 6 High-flux attractions. Cities with paths. I think, at this point, it is too early to go to market. Respondent 7 Service providers will update their POI; already in Google, many service providers do not update their information. How can this be avoided? Would it be possible to connect to Google’s POIs in order to avoid partners having to keep several profiles? 7  Placing plaques on the street or even on a monument is not easily allowed. How will tourists, who do not necessarily look at the tourist office website, be aware of the concept? Roaming in Switzerland is very expensive for a tourist. Will there be an offline format? It would be very important; otherwise, few tourists would use it on the street. Have you planned to collect data through the tool and make it available to the DMO? Information about the person (keeping GDPR in mind), the activities sought, and the background. First-time tourists want to see the must-sees. It may be necessary to clearly distance the must-haves from the other POIs and show what is around these must-haves. Often, the must-sees have peak hours; it would be interesting to show on the POI these moments of strong influence, at best, live or during the preparation of the stay. Is there also a means of travel provided on the maps, e.g., on foot or by metro? For example, in the city of Lausanne, it is not so easy for everyone to get around on foot. Otherwise, the base of the map is too similar to Google Maps. Respondent 8 AI still has a massive dependence on already existing information and risks producing weak or even false content! Capitalizing on the time saved for teams means having the certainty of generating weak or even false content because it is not controlled. Solution targeting issue. Who are you intending it for? What is the advantage of your solution compared to Google in terms of the cost of the latter? No API connection to existing content in the databases (SIT) of tourist offices? If not, your solution is a second interface in which a lot of content will have to be reintroduced/checked and modified twice/etc. Although challenging to swallow, Adam read the market research and knew something had to change. He wonders if AIVG has a competitive advantage over the market players. Which market should AIVG go after? What is the value proposition? How can he communicate his value proposition to his target market? References 1. Sojern (n.d.). State of Destination Marketing 2024. Wwb.Sojern.com. https://web.sojern.com/reports/state-of-destination-marketing 2. Skift (n.d.). State of Travel 2024. Skift.com. 3. Phocuswire. (2024, July 8). Startup Stage: Freeguides empowers hotels to accompany their guests beyond the lobby. Www.Phocuswire.com. https://www.phocuswire.com/startup-stage- freeguides-empowers-hotels-to-accompany-their-guests-beyond-the-lobby 8 4. Phocuswire (2024, March 20). Travelers can now purchase AI-created customized audio tours for any destination. Www.Phocuswire.com. https://www.phocuswire.com/travelers-purchase- ai-created-customized-audio-tours-any-destination 5. Skift (2023, September 15). Tailbox Raises $1.5 million for AI-based tour guide: Startup funding roudup. Www.Skift.com. https://skift.com/2023/09/15/tailbox-raises-1-5-million-for-ai-based- tour-guide-startup-funding-roundup/ 9