NB: This is an article by Bobby Healy, CTO of CarTrawler
I believe that Google poses the biggest long-term threat to the profitability and growth of airlines, hoteliers and travel intermediaries that they have ever seen. Here’s why:
Over the last number of years, Google has entered more and more areas of the market through the introduction of Google Flight Search in particular, Google Hotel Finder and Google Hotel Ads, as well as the optimisation of Google Maps for hotel bookings.
Google’s search engine has always been a natural part of the travel experience, but now Google is proactively seeking out demand for specific products while staying under the radar. Google knows what customers are looking for – and is in a powerful position to deliver it. Having a monopoly on both search and Android provides them with an unfair advantage in the travel eco-system.
‘Short-term gain and long-term pain’
Google will bring two major trends to existing industry players: short-term gain and long-term pain. In the short term, hotels, airlines and existing OTAs will see an opportunity presented by Google, in that they will be able to work together to generate incremental demand. However, that honeymoon period can’t last forever and Google is already planning well beyond that.
Airlines in particular have a natural advantage in the marketplace that they are not fully benefiting from – that nearly all trip planning begins with the flight search.
By partnering with the Google Flight Search product, airlines are effectively handing Google the top of the trip planning funnel.
This brings Google about two weeks further forward in the trip planning timeline than it previously was – and into direct competition with the airlines themselves for the hearts and minds of their (currently) brand-loyal customer bases.
So, on one hand you have direct providers surrendering invaluable customer and itinerary data and, on the other hand, Google is selling these customers to the highest bidder – on all devices and at all points in the timeline.
It’s a perfect scenario for Google, and a perfect storm for the travel industry: customer purchasing behaviour controlled and sold by a monopoly provider of search and mobile platforms.
‘Fighting the wrong war’
Google is getting immediate access to customer itineraries from the moment people book or search for a flight or hotel, giving it a direct insight into what customers want, as well as how, when and for how long they want it.