Gen Z’s travel agent? It’s a bot with better ideas

Artificial intelligence, digital payments, and mobile-first platforms are rapidly transforming the tourism industry in India. The shift, led by younger travellers but increasingly being adopted across age groups, is prompting companies to revamp their technology stack for catering to the surging demand for speed, flexibility, and curated travel experiences.

Nearly 40% of Gen Z bookings on travel platform Yatra are currently made just 3-5 days prior to a trip, said Bharatt Malik, senior vice president, flights and hotel business. “This cohort expects instant recommendations, flexible payments and quick turnarounds,” he said. “AI helps us personalise offers and push relevant options even for last-minute travel”.

As many as 59% of Indian travellers are tapping AI tools to help plan trips or make bookings, according to a recent report by Boston Consulting Group (BCG). While the trend is the highest among Gen Z travellers, it is also extending to others seeking personalised itineraries and activity suggestions. Booking.com data showed 44% of Gen Z users are already using AI to discover activities during holidays.

With domestic leisure travel expected to grow at 12% annually through 2040, platforms are betting on a mix of automation, payment flexibility and real-time personalisation to serve a base that is increasingly impulsive, app-first and experience-focused, experts said.

Digital payments, particularly UPI, have become the default, marked by the growing use of EMI options, especially for younger travellers booking activity-led short breaks.

“There’s a 10-12% higher usage of UPI and EMI in younger cohorts,” said Malik. “It’s not just about affordability — it’s about enabling spontaneous travel without upfront financial strain.”

Rikant Pittie, co-founder at travel platform EaseMyTrip, said shorter, high-energy holidays are pushing more travellers to opt for flexible payment tools. “Many plans are made days before the trip. Pay-later options help them book without overthinking,” he said.

Platforms are also responding to changes in how travel destinations are discovered.

Social media is influencing not just destinations but booking behaviour.

At Zostel, 80% of weekend travellers are Gen Z, with many picking locations based on what they’ve seen on Reels or via influencers. This demand pattern is now being fed into AI-driven recommendation engines to align trending destinations with user interest, said experts.

There is also a notable rise in mobile-driven micro-travel, entailing breaks of 2-3 days booked entirely on mobile apps, said Gaurav Malik, country director at Agoda.

“Travellers are looking for quick combinations of stay, transit and local experiences. Our focus is on reducing steps between search and booking,” he said.

Though AI is shaping location discovery and payments are becoming frictionless, as many as 80% of travellers still prefer direct human assistance in travel planning, the BCG report pointed out. This is especially for complex itineraries or group travel, indicating that the emerging hybrid model in the Indian travel market is likely to persist.