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637 days ago
 

Google reckons 2013 will be the year everyone loves what it is doing in travel

Recent developments at Google suggest its travel strategy is moving to a second phase – and now there is a promise that next year will see consumers take it to their hearts.

Whether such affection will be mirrored by the industry is another matter, of course.

In a lengthy blog post today, outlining some of Google’s latest moves to enhance the Flight Search and Hotel Finder products, vice president of travel Jeremy Wertheimer ends by saying:

“We think you’ll love what we have coming your way in 2013.”

It’s a sign-off obviously designed for Google users but also perhaps one to remind the industry that whilst some elements of its travel strategy have taken longer to implement than previously announced, 2013 will be the year to watch Google extremely closely.

Wertheimer’s post, for example, goes into a fair amount of detail about Google’s recent changes to Hotel Finder and also how it expanded to include some international routes out of the US for Flight Search.

But it is the other, non-specific product-related elements which perhaps illustrate where a large part of the strategy could possibly head to next.

The recent launch of the Explorer service shows that Google wants to get closer to the beginning of the so-called funnel of online travel, positioning tools at the inspiration phase.

It doesn’t take much to realise that when such tools are added to other services such as the content from Frommers and Zagat, maps and video, there could be quite a compelling fully rounded service down the pipeline.

Far less is understood in terms of how it all might play out strategically within the industry.

In an investor note issued today following Wertheimer’s post, Tom White of Macquarie wonders whether the growth of the hotel service, for example, could disrupt the existing intermediaries in the sector.

“On one hand, building out/integrating a global network of hotels would take time (particularly in the fragmented international hotel space) and would not likely be popular with either regulators or Google’s travel advertisers.

“On the other hand, Google is one of the few companies with the resources and will to tackle large projects such as this.”

Will they (consumers) love it? Difficult to say – it is, after all, hard to change travel search and buying habits.

But, equally, will the industry in general or certain segments hate what the Big G does next?

Whatever happens, 2013 could be quite a landmark year in the evolution of the Google Travel project – at least if Wertheimer is to be believed.

NB: Love heart image via Shutterstock.

 
 
Kevin May

About the Writer :: Kevin May

Kevin May is editor and a co-founder of Tnooz. He was previously editor of UK-based magazine Travolution for nearly four years and web editor of Media Week UK from 2003 to 2005.

He has also worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology and a postgraduate diploma in magazine journalism.

 

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  1. Robert Gilmour

    Interesting stuff re price and the small/large retailer.

    My main concern is the distribution of reward, the points re the local butcher are interesting, part of their ‘reward’ has to be for expert conditioning/presentation of the primary product. In the case of accommodation, hotels are the primary producers, like the farmers are of meat. The OTA is more akin to the supermarket, and as you rightly say, they get 0 out of 10 for conditioning/presentation – so why should their rewards be so high, relative to the hotelier, who in many cases isn’t getting any ‘reward’ at all – just covering his/her costs of production. (and not in the case of flash sales).

    Reward has also to be related to value added, not just an arbitrary distribution of the price of something, largely dictated by imperfect market forces. If my hotel room is priced at £100 because I from my expert knowledge gained from being an experienced hotelier, and with one eye on the competition, regard it to be worth £100, then giving a wholesaler/retailer £20 of that £100 is an outraqgeous reward to demand for adding no value to the product, just creating a high tech marketplace.

    Where the hotelier differs from the farmer as the primary producer, is that the farmer plays really no part in the ultimate sale price of his product, he/she is only interested in the wholesale price. Where this really breaks down is that the power and collective organisaton of the supermarkets dictates that wholesale price, in some cases giving the farmer no reward at all as a result (this is well documented in the UK)

    it really is such an imperfect world.

     
    • Murray Harrold

      Exactly. It is the “power and collective organisation” bit that is the worry. Thing is, this is/ will/ has happened in travel. It is still possible for travel to re-adjust the balance … but only just. Airlines and hoteliers are sleepwalking into a situation whereby they will no longer have any control of their product… whereas what they seek, is the reverse. They will be, like the farmer, someone who just receives a wholesale price and no-one will give take any notice of how and where their product is presented. Presentation of the product to the end user will be the domain of the retailer.

      Further, it is then the retailer (that is, who presents product to the end user) who will dictate what is sold … and for how much and with what special offers (much like the supermarkets).

      Time is running out for travel suppliers. Mainly, I fear, because a) Airlines and hoteliers etc cannot ever believe that what happened in other industries, could happen to them (Airline exec’s being not exactly the sharpest tools in the shed) and b) This sheer inability to see anything beyond next quarters results.

       
  2. Murray Harrold

    Ahhh! Everyone likes to have a finger in the travel pie. Everyone makes the assumption, as well, that suppliers wish that the likes of Google have a finger in the travel pie. Now, I am sure that Google could do well in the travel arena. They have the muscle and enough money to throw at the issue. I am sure that they could produce, from the techy angle, the most mouth watering, speedy, dynamic interface that the average “Techy on the Clapham Omnibus” could but dream about. There remains, however, two big issues.

    Firstly, Google, as with all others, are simply answering a question. In travel, however, the big problem one has to crack, is if one is being asked the right question in the first place – and even then, if one believes one has the right question, it may still be the wrong question.

    Secondly (and one which no-one has yet spotted) is if travel suppliers wish to play ball. At present, the prospect of having someone as mighty as Google coming along and saying they will sell tons of your product, seems like some sort of holy grail. Airlines and many hotel groups are already, probably, drooling at the prospect. Well, is it? The answer, of course, is that Google in travel, big time, is probably the worse thing that can happen.

    We have moved from a fragmented supply chain (at least, fragmented at point of delivery to the end user) to one where, one a daily basis, distribution of product is concentrated into a relatively few number of large retailers. Like in food retailing, computers, DIY (to name a few) travel suppliers will realise only too late that they are beholden, for bread and butter sales on those super-
    retailers. Retailers who will suddenly start telling them where airlines can fly to and at what price. Retailers who will tell Hoteliers how many rooms they can sell and at what price, perhaps, even, where they are to build their next hotel. What free offers they will be giving next week … and so on and so forth.

    Now, at present, the bones of the more fragmented retail distribution structure still remains. It is disappearing rapidly but it is still there. That refers to online as much as offline. The high street still has agents and there are still smaller online outfits producing sales … at present.

    These smaller units of retail distribution are the ones suppliers need to nurture. If necessary, not only pay bounty (apparently that’s the new word for commission) but even supply them with the core funding to get their website version online. If required, provide white label versions of websites to as many as possible. Not simple affiliate links, but go whole hog to encourage the proliferation of as many different new websites as possible.

    Now, I hear you argue, large scale retailers means lower price for the consumer. True, that may be the case. But – when was the last time you bought a big supermarket tomato? Yes, nice and red, perfect shape, clean and pristine. Tastes like, well, cardboard. Meat is the same. Nice, bright red colour (which, incidently, properly hung and conditioned meat should not be) no fat …. and no flavour. Meat is almost uni-tasting these days. I often had to ask my wife what meat we were eating … before we decided to go back to our local – proper local – butcher.

    If prices are forced down, something has to give. Prices for the front end, business class (say) will have to increase dramatically, which will push business types into the cheap end, overall revenue per flight falls. This can only go on for so long, before other, more insidious cost cutting has to take place and planes start falling out the sky. Routes are cut … of course, those routes will not be the developed world’s routes but the un-developed world’s routes. Okay, that’s a bit extreme …. maybe. At the end of the day, an Airbus does not cost $10 a week . Frankly, if I am going to trust my life to a thin metal tube at 32,000 feet, I must have 110% faith that whoever is responsible for making damn sure it stays there, has done their job properly.

    So, no. I do not think we will like what Google has to offer. Travel suppliers can still wake up, though and drag travel back from yet another depressingly repetitive suicide attempt. There is still time for travel suppliers to secure their margins through the good old tried and tested maxim of “divide and rule”.

     
  3. Robert Gilmour

    That wouldn’t surprise me in the least

     
 
 

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