Google: a software wolf in a travel sheep’s clothing?

Last week I was fortunate enough to share a meeting with Dan Robb, Google UK’s Senior Travel person. Robb was there to explain Google’s strategy in travel following the purchase of ITA software last year and the launch of the soon-to-be-infamous Google Flights product.

Here are a few observations I took away from the meeting:

  • If you drink the Google Kool Aid, you’ll believe that Google “aren’t in it for the money”. Robb was very quick to state that Google’s interest in travel is primarily about solving a problem for its users, rather than casting asunder today’s travel industry behemoths. There was some smirking in the room at this point. “It was a problem that users wanted solving,” Robb said, “and with ITA and Google together we had the expertise to solve it.”
  • Google’s $700m acquisition of ITA software may seem expensive. However ITA already makes $100m profit pa. Long term: not a bad investment. Google’s engineering team’s assessment of the ITA engineering team was basically: “These guys are incredible – smarter than us”. Pretty scary.
  • Google Flights took less than 5 months from the DOJ approval of the ITA purchase to live. Google are not calling Google Flights a finished product. “We recognise it’s missing a lot of functionality that would make it commercially viable,” Robb said. Like advertising, for example.
  • Meanwhile though, Google aren’t looking to take on traditional travel suppliers. Google’s Product team have had an edict from on high that they are not getting involved with taking bookings. “We’re all about driving qualified leads,” said Robb. 
  • With both the Flights and the Hotel Finder products, Google are prioritising product suppliers rather than intermediaries. Watch out Expedia, Orbitz, Skyscanner et al. When you search for a hotel, Google will prioritise the hotelier or the hotel chain, even if that hotelier has decided not to work directly with Google. Same with Google Flights. The airline gets prominence when it comes to clicking through to book.
  • Google is all about SPEED and completeness of data. To do effective finding you have to have a complete view of the marketplace, quickly. When you compare Skyscanner’s response time to Google Flights, you’ll see what I mean.
  • But, what of de-packaging the traditional package holiday? With further information at customers’ fingertips this is bound to continue. Dan Robb made it clear that the UK team have highlighted the need to factor in the European package market, which is not a common model in the US. “Perhaps we’ll show a package price as a merchandised space next to the hotel and flight prices?” he said. For me it remains to be seen whether Google’s propellerheads in the States see this as a problem worth investing valuable coding time in solving.

So, tour operators have a choice, but it’s not whether or not to play Google’s game. You can’t fight Google when Google brings the lion’s share of traffic to your website.

However the fight for the value, convenience and re-assurance of the good old British package holiday continues to heat up. How should the traditional operators respond?

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3 thoughts on “Google: a software wolf in a travel sheep’s clothing?

  1. If the focus of Operators is JUST on value and convenience then the likes of Google flights will erode their position in the market – since Google will help people discover the best value whilst making it as easy as possible.However by shifting their focus to the overall experience – alongside value and convenience, (and re-assurance), they will be less vulnerable to these types of offerings.This is likely to need a shift of the value proposition at a strategic level for most operators.

  2. I think Google recognise that value doesn’t come just in the form of a price point. It can also come in what you get for the money. Airlines competing on the same routes need differentiators, and essentially Google will attempt to provide this content for each airline next to the prices. As "paid for" screen real estate, so it will drive up CPCs and therefore Google’s revenue.Remember that Google isn’t about to become an operator – it is trying to take out the intermediaries to become the intermediary to beat them all.Therefore, one avenue to be explored is what they be done to *retain* customers, first and foremost, in order to stop the intermediary "getting in the way" of the customer relationship. This is not a core competency for tour ops as historically customers have been very fickle. We need to start asking ourselves why is that and putting strategic plans in place to stem the tide.Certainly the overall customer experience will play a large role in that in my view.

  3. F* me Google Flights is fast! shame it doesn’t do non-US yet – planning an Ibiza trip next summer – wife and me on 20th summer of love ;)We (Virgin Atlantic) use ITA searches to show our own availability in our own website – we of course have to pay for this privilege. We will then have to pay Google for the privilege of passing through customers to our website from Google flights..

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