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?