On The Beach CEO Says Automation Necessary Despite 107 Job Cuts

OTA defends workforce reduction as operational transformation

On The Beach CEO Shaun Morton has ruled out additional job cuts in the near term following the company's elimination of 107 positions in August, while maintaining that automation represents an essential investment for travel companies rather than a cost-cutting measure.

The online travel agency conducted a formal consultation process over the summer to "automate and streamline operational processes," resulting in the redundancies. Morton told attendees at Travel Weekly's Future of Travel Conference on September 10 that the company would not be making further cuts, though he acknowledged uncertainty about how technological change might reshape organizations over the next five years.

Booking fulfillment drives automation push

The workforce reduction centered on changes to On The Beach's booking fulfillment operations. The company previously required manual intervention with hotels or airlines for 40% to 45% of bookings. That figure has now dropped to just 1%, with 99% of bookings processed automatically.

Morton pushed back against the characterization of automation as primarily a cost-reduction strategy. "This isn't about taking costs out of the business," he said. "This is about creating an environment where customers can get what they want whenever they want it at a scale that is almost unimaginable or theoretically limitless."

The CEO acknowledged the investment required for automation is "quite significant," even as the company remains in early stages of customer-facing AI deployment. On The Beach currently uses AI to power fewer than 1% of searches, though Morton noted conversion rates from AI-driven searches match traditional search performance.

Why it matters

The travel industry faces a fundamental tension between automation's operational benefits and workforce implications. On The Beach's experience demonstrates that even companies achieving near-complete booking automation require substantial upfront investment and careful change management. For travel executives, Morton's framing of automation as a capacity enabler rather than cost reducer offers a strategic lens for evaluating AI investments—though the 107 redundancies underscore the workforce impact regardless of stated intent.

Industry peers proceed cautiously

Other major travel companies are taking more measured approaches to automation deployment. EasyJet holidays CEO Garry Wilson said his company is "trying to be really careful as to when we push the button on some stuff because it's evolving so quickly."

Tui UK & Ireland managing director Neil Swanson acknowledged sensitivities around AI adoption, noting that "everyone's concerned where this might go."

Morton emphasized that On The Beach is deploying "significantly more changes every week than we ever have before" with improved quality enabled by AI, suggesting the pace of transformation in travel operations continues to accelerate.

These details were first reported by Travel Weekly.