Google has gone after airlines in its latest move, launching its Google Flights search engine in the Australian market. But, much like the industry’s dislike of OTAs, Google Flights doesn’t spell success for everyone.
Back in April, Google started trying its hand at bundling travel packages for consumers, while the Partnerships Director for Travel Google, David Pavelko, claimed the search engine is coming after the “new travel consumer journey”, which literally breaks down the experience into “micro-moments”.
Google Flights kicked off in overseas markets several months ago, and allows users to use Google the same way they would any other OTA, by comparing flights and prices for different airlines, times, destinations and dates.
“Whether you’re traveling from Wollongong to WA, or Tullamarine to Townsville, Google Flights will give you travel inspiration and surface the best available flight options,” Google explained in a blog post Wednesday.
“Starting today, you can search on Google for flights to a destination by searching for things like ‘Flights to Cairns’ or ‘Flights to New Zealand.’”
By using Google Flights, users are notified with tips on how to find the best price for their chosen route, which includes recommendations for alternate airports and predictions of when prices might drop, giving you cheaper flights.
Google also provides an “explore” option for your holiday inspiration.
“Once you select your departure and return dates, you’ll be presented with a list of ‘Best flights’; which represents the best tradeoff of convenience and price,” Google said.
Google even offers you the option to track a flight and receive email notifications when the price drops, similar to a Google Alert.
But now, the Chief Technology Officer at travel IT company, CarTrawler, Bobby Healy, has come out in force saying this spells bad news for airlines.
Speaking at the CAPA, Centre for Aviation’s Airline Leader Summit in Dublin, Healy said the internet has allowed search engines and intermediaries to form closer relationships with consumers.
Per CAPA, Healy has developed booking solutions that are now in use by 80 per cent of the world’s top 20 airlines.
“Google is bad for the airline industry,” he said, per CAPA.
Healy said Google’s technology would allow it to step in and direct consumers to Google Flights just by searching for branded airlines in the search engine.
According to Healy, Google is taking control of the “trip planning funnel”.
At the CAPA Airline Leader Summit, Healy described what he calls the “trip planning funnel”, with review sites at the top, passing down through metasearch and OTAs, before reaching the supplier (or airline) at the bottom of the funnel.
As the funnel narrows towards the bottom, the greater the value added.
Per CAPA, he argued that Google’s strategy in the travel industry is to achieve critical mass in the market, then to take the top of the funnel and concentrate it to squeeze airlines out, or to make them pay.
“If you think GDS fees of USD5 or USD6 is bad, wait until you pay Google USD50,” Healy said.
And of course, there are oodles of OTAs out there trying to sway consumers to book via them and not directly, but Google is different because it is a monopoly in many of its areas of business.
According to Healy, Google has a 95 per cent share of online search, 75 per cent of digital marketing and 97 per cent of apps on its Android mobile operating system.
“To the end user, Google is the best company in the world, it has everything I need, but, as an airline, they know everything about your customer,” said Healy.
Google Flights, the company’s airline flight comparison site, has enjoyed a massive surge in popularity over the past five years, per CAPA.
According to data presented by Healy, the “google flights” is around three times more common as a search term than “kayak”, and more than five times more commonly searched than “skyscanner”.
The Google product overtook kayak, previously the US leader, sometime in 2015, from almost nowhere in 2012 and 2013.
“Google will wipe out the metasearch operators,” said Healy. “It is a monopoly promoting its own products.”
In the longer term, consumers will also suffer as choice reduces and prices rise.“There’s a clear path to damage to the consumer,” said Healy, per CAPA.He also suggested that “airlines and only airlines can stand in [Google’s] way”. “Don’t let Google have your data unless it’s on your terms.” Healy also recommended that they provide the “right digital products for consumers”.