Google's new product could easily dominate the top of the travel search funnel, says Steve Endacott, chairman of Teletext Holidays
The shiver of collective OTA fear during the “Googles Destinations” presentation at this week's Phocuswright conference in Fort Lauderdale was palpable.
In Google Destinations the company has applied their vast technology resources to produce a product which could easily dominate the top of the travel search funnel.
With an emphasis on inspiration via content aggregation and a laser focus on price comparison using cached pricing data, at first glance Google appears to have produced another killer application.
The key advantage Google has over any other travel player is that its total dominance of search gives it the ability to deliver huge customer volumes to any new tools. So when Google launches a new travel product, people had better take notice.
Apparently 45% of travel searches start with a destination-led query, e.g. holidays to Majorca. Google, via a visual carousel, will place “Google Destinations” at the top of organic listings and is therefore set to divert traffic from traditional 'link-driven' search to a content-rich format.
Once a destination has been chosen, customers will be delivered to an aggregated 'super page' of relevant content featuring destination descriptions, videos, weather, attractions and other information.
This is supplemented by a 'popularity' index to show the best date to travel based on weather and price. Admittedly great content, but nothing too scary so far.
However, it was the 'what’s next?' section of the presentation that caused the shivers.
Google is using cached 'flight and hotel' data to create daily cheapest 'destination and route' pricing, presented via a simple slider, showing the cheapest periods in which to travel to the destination. Alternatively customers can utilise a budget slider to see which destinations fall within their budget and desired dates.
Once customers have decided on their destination and date of travel, they can drill down through results using traditional filters such as star ratings and user review scores, then compare prices between non-stop flying and 'via flying', and find out the price if they were to add an extra weekend on a 7-day trip to extend it to a 9-day trip.
Once the route and dates have been decided, customers will be deep-linked into the existing Google Flight and Hotel searches, which currently still link out to suppliers' sites. However, it was 100% clear at the conference that 'instant' booking and payment via Google Pay is fast approaching.
The scale of the data being aggregated and the speed of results being presented back was amazing, which when combined with Google's ability to deliver simple user interfaces creates a very impressive product that in my opinion could quickly become a game-changer.
Google continues to avoid the regulatory downsides of being an OTA by maintaining a media model, where bookings are made directly with suppliers. However, the customer tools Google is providing squarely compete with the functionality delivered by traditional OTA sites.
Google again stated that the motivation for the new “Destination Search” is to improve both customer 'inspiration' and remove friction from the mobile booking process. I have to say they are doing a great job.
A less obvious, but key motivation may also be to rebalance the power in the USA's OTA market, where consolidations in 2015 resulted in Expedia and Priceline controlling 65% of the market. In a mobile-dominated world where real-estate is restricted, these two advertisers completely dominate.
The new destination search will allow Google to flow bookings to a much more diverse customer base by acting as a virtual OTA, while maintaining its media model.
You may ask “why is Google bothered about other advertisers, when competition between the big two keeps click cost high?”.
The reason is that Google has always taken a long-term view and realise that if it stops providing traffic to smaller players, these will be forced to work more closely with their biggest competitors, such as Facebook. Secondly, if competition in auctions is controlled by two players, competition could mysteriously disappear.
Being the best market place for advertisers, while reducing consumer friction in the mobile world, remains the Holy Grail that Google is aiming for, and the company would appear to be on the right track. Unfortunately, it would appear the by-product may be direct competition with OTAs.
If the only differentiator between the two offerings is how payment is made, it appears inevitable that OTAs will soon be complaining in the courts about an abuse of power by Google, in terms of how prominently “Google Destinations” is promoted within search results.
The response from Google that results are decided by a “secret source algorithm” may not cut it as justification.
This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.