Almost 12 months to the day, Google finally announced what many had been anticipating for years: the search giant was getting into travel in a major way.
For all the proclamations in the years beforehand (hands up who heard an executive claim that the company had no designs on entering the travel industry?), Google decided it would pay $700 million to get its hands on the well-respected air shopping and pricing engine¬†ITA Software.
Nine months later, with a Department of Justice review giving the deal the thumbs-up (with conditions), Google has officially been able to spend the past few months working out what it is going to do with its prized asset.
There have been plenty of ideas from outside the Googleplex, some even taking such possibilities to a tongue-in-cheek extreme, while a number of companies formed the FairSearch coalition to try and educate the industry and regulators on how the acquisition might impact on the marketplace.
Nevertheless, Google’s comments following the DoJ review followed its original premise for buying ITA: to develop “exciting new flight search tools for all our users”.
Details of exactly how it intends to do this for ALL of its users are still yet to be announced, but some signs are beginning to emerge, at least on perhaps some of the kind of tools that might be included with its new and wider focus on travel.
OAG and Innovata are currently powering a flight route information test with Google, for example, but the core proposition of how it handles flight search is unclear.
So perhaps now is the time to take a reality check.
The acquisition of ITA did not give Google the final piece in its jigsaw to launch a comprehensive travel search product – far from it, in fact, especially if it wants to create something which works for its international users or for users in North America wanting international flights.
Until now (and every media outlet has been guilty of this), much of the focus surrounding the deal has been on its core market – but presuming the acquisition was a fait accompli of sorts for the entire strategy. It has been a typically US-centric point-of-view.
But the bigger, global picture is actually far more interesting and extremely complicated, especially as it seems unfathomable that Google would only concentrate on the US market.
ITA, through its famed QPX system, provides air search and shopping tools to predominantly US-based metasearch engines and many others, including Kayak, Orbitz, Bing Travel and TripAdvisor for its flight channel.
Sites such as Kayak, for example, use a mixture of QPX and the Metapricer engine from Amadeus (as well as direct feeds from airlines and and online travel agencies)¬†to provide accurate search results to users.
In short: multiple suppliers of data, not just ITA.
Therefore, it could be reasonably safe to presume that Google will be forced to do the same – that QPX would be the primary, but one of a number of technology solutions, especially as ITA is at least considered by many a superb engine for North American coverage but perhaps less so for the rest of the world.
It is at this point in the evolution of Google’s entry into the travel space that the strategy gets extremely interesting.
Put simply: how does Google achieve its ambition of providing “exciting new flight search tools for all our users” – with an emphasis on the “all”, by geography and route requirements?
Here are some of the options:
1) Scale-up ITA
Google could be willing to simply pour resources into ensuring ITA is a truly global flight pricing and shopping engine, so it does not need to rely on others to provide additional data in the same way that Kayak does.
How far ITA/QPX is from being able to do this is unknown, indeed it might be there already. But if so, why do existing ITA customers use multiple suppliers? The perception in the industry is that QPX is currently unable to achieve full global coverage in its current form.
2) Partner with another metasearch engine
Outside of North America, Google could licence the technology of a number of metasearch engines, especially if such providers have widespread coverage and direct connections into airlines.
Whether an existing metasearch engine would be willing to do so is another matter, especially as Google will effectively be a competitor. But it is worth remembering that most metasearch engines forever talk about how they can work alongside Google in the battle for consumers, so if the price is right then perhaps such a possibility is so far-fetched.
Google could, of course, simply buy a company for its technology as well.
3) Partner with a global distribution system or emerging search companies
The infamous Online Travel Ecosystem diagram produced when Google bought ITA in 2010 illustrated that there are plenty of other providers carrying out similar functionality to ITA’s QPX, including all three GDSs.
It would be quite a leap for Sabre (with its ATSE system) to even consider – or be considered – given that it was one of the coalition partners within FairSearch. However, Travelport was always silent, while Amadeus only ever gave extremely lukewarm support to the FairSearch group.
It is understood that some very early discussions have taken place between Google and at least one of the GDSs over the course of the past six months, but there is no official RFP on the table.
Google was always going to do something in travel, this much the industry now understands. The benefits both commercially and from a consumer search experience perspective are obvious.
The search giant is deadly serious about entering this space.¬†But the finer details of exactly how Google achieves this are far trickier than just spending $700 million on a travel technology company.
Airfare shopping and pricing is an extremely difficult business – there are too many moving parts, systems, contracts, protocols, geographic differences, for it be easy.
The global proposition for a travel product from Google is the next crucial chapter in the story. And, once again, it will be far from simple.
NB: ITA Software and Google declined to participate during the course of producing this article.