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Marsh & McLennan (MMC) Survey Stresses AI Role in Travel Booking

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Marsh & McLennan Companies, Inc.’s (MMC - Free Report) business, Oliver Wyman, recently released a report, ‘Why Generative AI Is a Game Changer for Leisure Travel,’ highlighting AI’s role in transforming how travelers plan vacations. It surveyed nearly 2,100 customers in Canada and the United States in March 2024. Highlights from the report are expected to aid Oliver Wyman in enhancing its offerings for its clients.

Per the report, AI’s role in itinerary planning and trip inspiration has increased as 41% of Canadians and Americans are now using it compared with 34% in August 2023. The report also highlights a significant opportunity for online travel agencies (OTA) to increase their booking share up to 17 percentage points by 2029 if suppliers continue to ignore investments into AI capabilities. OTA’s can gain revenues in the form of commissions amounting to more than $2 billion from suppliers. Insights like these can help Oliver Wyman strengthen its relationships and enhance its value proposition for clients.

This report might also lay the foundation for partnerships with clients in the travel industry for MMC’s Advisory business, Oliver Wyman. Travel companies might get attracted to MMC’s expertise in this field and transform into their clients. Oliver Wyman’s revenues of $789 million rose 13% on an underlying basis in the first quarter of 2024.

Per the report, travel companies could not match the pace of technological innovation and failed at launching customer facing gen AI tools. Hence, developing such tools is expected to enhance the loyalty of customers and improve direct bookings and customer experience.

The complexity of the integration of AI systems and the huge amount of investment are expected to drive the industry to pursue innovative solutions to combat these issues. Oliver Wyman’s COVAK business is likely to benefit from this trend. Per the report, 82% of travelers who use AI tools are expected to use them again in the future.

The report also stated that 59% and 31% of travelers below and above 45 years, respectively, are using AI tools for travel planning. Per the survey report, more than 90% of travelers use AI to book travel plans, 44% of travelers end up booking activities and 43% use dining suggestions.

Zacks Rank & Price Performance

Marsh & McLennan currently has a Zacks Rank #3 (Hold).

Shares of Marsh & McLennan have soared 20% in the past year compared with the industry’s 13.6% rise.

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Stocks to Consider

Some better-ranked stocks in the broader Finance space are Coinbase Global, Inc. (COIN - Free Report) , Burford Capital Limited (BUR - Free Report) and Brown & Brown, Inc. (BRO - Free Report) . While Coinbase Global and Burford Capital sport a Zacks Rank #1 (Strong Buy) at present, Brown & Brown carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Coinbase’s current-year earnings implies a 462.2% year-over-year surge. It has witnessed five upward estimate revisions against none in the opposite direction in the past month. COIN beat earnings estimates in each of the past four quarters, with an average surprise of 377.6%.

The Zacks Consensus Estimate for Burford Capital’s 2024 full-year earnings is pegged at $2.04 per share, which increased 2 cents in the past month. It beat earnings estimates twice in the past four quarters and missed on the other occasions, with an average surprise of 113.4%. The consensus mark for BUR’s revenues in 2024 is pegged at $882 million.

The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $3.29 per share, which indicates 17.1% year-over-year growth. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%. Also, the consensus mark for BRO’s 2024 revenues suggests 6.6% year-over-year growth.

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