Industry Deep Dive: Intelligent Customer Experiences in Travel & Hospitality

The New Imperative: Intelligent, Data-Driven Customer Experiences

The travel and hospitality sector is undergoing a profound transformation. Once defined by high-touch, in-person service and brand loyalty, the industry now faces a landscape marked by rising customer acquisition costs, high churn, fragmented data, and the ever-present risk of service disruptions. In this environment, delivering intelligent, value-based customer experiences is no longer a differentiator—it’s a necessity for survival and growth.

Travel brands that lead the market are those that have embraced unified customer identification, AI-driven personalization, and robust first-party data strategies. These capabilities not only reduce acquisition costs and enhance loyalty but also turn moments of disruption into opportunities to deepen customer relationships. Let’s explore how these principles are being applied in travel and hospitality, and what it takes to succeed in this new era.

The Challenge: Rising Costs, Fragmented Journeys, and Loyalty at Risk

Between 2022 and 2025, customer acquisition costs (CAC) in travel and hospitality have surged by 35%, while customer lifetime value has grown by just 4.5%. This imbalance is unsustainable. Brands are overspending to attract customers who are unlikely to stay, often due to poor personalization, disconnected data, and outdated targeting strategies. Alarmingly, 77% of travel brands continue to target existing loyalty members with paid media, eroding marketing ROI and missing the mark on true customer engagement.

The root causes are clear:

Siloed data and marketing strategies: Only 9% of travel firms have fully integrated their paid and owned media strategies, leading to fragmented customer experiences and inflated acquisition costs.
Identity blindness: Inadequate identity resolution means brands waste up to 27% of their digital acquisition budgets targeting customers they already have.
Generational disconnect: 82% of travel brands lack a coherent strategy for engaging Gen Z, who represent the next wave of travelers but are underrepresented in loyalty programs.
Service recovery gaps: Service disruptions, if mishandled, damage loyalty. Yet only 6% of brands use AI to personalize service recovery, missing a critical opportunity to turn negative experiences into loyalty-building moments.

The Solution: Unified Data, AI-Driven Personalization, and First-Party Strategies

1. Unified Customer Identification and Data Integration

The foundation of intelligent customer experience is a unified view of the customer. Travel brands are investing in cloud platforms, customer data platforms (CDPs), and advanced identity resolution to break down silos and connect data across every touchpoint. This enables:

Accurate targeting: By resolving customer identities across channels, brands can avoid redundant spend and deliver relevant offers to the right audience.
Personalized journeys: Unified data allows for seamless, context-aware experiences, whether a customer is booking a flight, checking into a hotel, or resolving a service issue.
Modern measurement: With integrated data, brands can move beyond last-click attribution to full-funnel, outcome-oriented analytics, demonstrating the true impact of marketing investments.

2. AI-Driven Personalization Across the Journey

Artificial intelligence is transforming how travel brands engage customers:

Personalized offers and content: 75% of travel firms report that personalized offers deliver the highest ROI for retention. Yet, only a minority have implemented AI-driven personalization across channels.
Service recovery: AI can analyze customer profiles, sentiment, and context to deliver empathetic, timely responses during disruptions—turning a negative into a loyalty-building moment. Brands that excel here see up to 63% higher retention after effective service recovery.
Dynamic segmentation: Advanced segmentation powered by AI enables brands to tailor messaging and experiences not just by loyalty tier, but by nuanced customer personas and real-time behaviors.

3. First-Party Data and Privacy-First Strategies

With the decline of third-party cookies and increasing privacy regulations, first-party data has become a strategic asset. Leading travel brands are:

Investing in authentication and data clean rooms: 39% of firms have implemented CDPs, 25% have robust authentication strategies, and 16% use data clean rooms to enable secure, privacy-compliant data collaboration.
Building trust through transparency: Customers are more willing to share data when they see clear value in return—such as exclusive offers, faster service, or personalized experiences.
Maximizing value from owned data: By leveraging first-party data, brands can deliver more relevant, timely, and effective engagement, while maintaining compliance and customer trust.

Turning Disruption into Opportunity: Service Recovery as a Loyalty Driver

Service disruptions are inevitable in travel and hospitality, but they don’t have to erode loyalty. In fact, when handled effectively, they can strengthen it. Brands that differentiate their recovery strategies—using AI to personalize responses based on customer value, context, and sentiment—see a 63% uplift in retention. Yet, most brands still rely on one-size-fits-all approaches, missing the chance to create memorable, positive experiences in moments of need.

The Generational Shift: Engaging the Next Wave of Travelers

Gen Z is rapidly becoming the core customer base for travel and hospitality, but most brands are not prepared. Only 14% of loyalty program members are Gen Z, and 82% of brands lack a dedicated generational strategy. To win with this digital-native audience, brands must:

Deliver mobile-first, frictionless experiences
Engage authentically on social platforms and through influencers
Align with values such as sustainability and social responsibility
Offer personalized, real-time rewards and recognition

The Path Forward: Recommendations for Travel & Hospitality Leaders

Invest in unified customer data and identity resolution to reduce acquisition costs, eliminate waste, and enable true personalization.
Leverage AI across the customer journey—from dynamic segmentation and personalized offers to empathetic, real-time service recovery.
Prioritize first-party data strategies to future-proof personalization efforts and build trust in a privacy-centric world.
Modernize measurement frameworks to demonstrate the business impact of customer experience investments and optimize marketing spend.
Develop generational engagement strategies to connect with Gen Z and future-proof your loyalty programs.
Turn service disruptions into loyalty opportunities by empowering teams with AI-driven insights and flexible recovery protocols.

Why Publicis Sapient

Publicis Sapient partners with leading travel and hospitality brands to design and deliver intelligent customer experiences that drive growth, loyalty, and operational efficiency. Our expertise spans strategy, data, AI, and experience design—enabling clients to:

Build unified data platforms and advanced identity resolution capabilities
Deploy AI-driven personalization and service recovery at scale
Activate first-party data strategies for sustainable, privacy-compliant growth
Transform measurement and analytics to prove the value of CX investments

In a world where customer expectations are rising and margins are under pressure, intelligent customer experiences are the key to unlocking profitable growth in travel and hospitality. Let’s reimagine what’s possible—together.

Ready to transform your customer experience?
Contact Publicis Sapient to learn how we can help your travel or hospitality brand thrive in the era of intelligent experiences.