Google Flights comes out of beta, but still isn’t profitable

Google Flights, the travel metasearch tool, has officially come out of beta. The Flights product now appears as an option within the Google products dropdown menu.

While no longer in beta, Google Flights still isn’t covering its costs. Kourosh Gharachorloo, engineering director of Google’s travel team, admitted this week to Business Insider that the division still isn’t profitable.

And official or not, it still doesn’t look as sophisticated and fully-inventoried as its metasearch competitors.

When the product was announced in 2011, Google foretold of a day when it would

“enable users to type ‘flights to somewhere sunny for under $500 in May’ into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily.”

It’s not quite there yet. But in the past year, it stepped closer to that ideal.

Since last July 2013, Tnooz reported on Google Flights enabling travelers who haven’t decided where they might like to visit can type in the names of countries or whole regions (“flights to Mexico“) to see airfares for various destinations plotted on a map.

There’s a flurry of news reports today suggesting this is a new feature, though it’s been available for a while in various iterations.

In fact, typing “flights to Europe” in the main Google.com search box also produces flight suggestions in a box to the right of results, and that box has doubled transaction volume, the company says.

Same with the “I’m Feeling Lucky” button, which generates a surprise suggestion of a place to visit. Contrary to what news outlets like Time is reporting, that’s been around since last summer.

Google Flights recently added a flexible-date search feature, something that has long available on competitor sites like Kayak, Skyscanner, and Momondo.

It doesn’t have reliably thorough inventory, though. Southwest, the US’s largest airline by passenger volume, doesn’t let its airfares appear on the main Google Flights results page. Last month, the situation improved in Europe, when Ryanair, the continent’s largest airline by passenger volume, agreed to let its fare results appear.

Even so, there can be quirks. Google Flights has faster search results than any of its competitors (who each have to resort to an interstitial page to distract users about the slowness of their results). But it often misses the cheapest fares. It’s not clear why.

Doing more at the “inspiration” end of the transaction funnels seems to be a goal. Last summer, Google released a marketing survey it commissioned that found that 54% of travelers aren’t decided where they want to go when they first sit down to search.

The most provocative change to Google Flights may not until come next year.

After the Justice Department’s consent decree around Google’s purchase of airfare technology company ITA Software expires in October 2016, Google will be able to do have flexibility with its licensing. As consumer advocate Ed Hasbrouck put it to the Washington Post last autumn:

“The real danger is of Google dominance of personalized pricing. Imagine Google being able to incorporate everything it knows about you from your use of all Google services into decisions about what price to put on each airline ticket.

Airlines or services with less info on which to base such price personalization would have a hard time competing with Google.”

A dangerous “open season” on other travel companies? Or an opportunity for the long prophesied personalization of travel results? Or something that won’t materialize?

Many industry observers will be eager to see what happens after October. Google had formally committed to let ITA Travel’s customers extend their contracts into 2016.

EARLIER: Google Flight Search increases interactivity with visual airfare mapping

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Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.

 

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  1. wayne w. beaubien

    How does the small fish with disruptive technology get coverage with tnooz? It is always about the big billion dollar companies that get coverage. It is a sick world compared to real innovation of our fore-fathers that had real a real contribution to improve the lives of people. Electric light, telephone remember those guys? This is why America can’t push real innovative .. the big guys keep getting bigger!

     
    • Henry Harteveldt

      Tnooz is full of news regarding “small fish” businesses. Check the “start-up” section.

       
  2. Henry Harteveldt

    Mr. Hasbrouck’s comments regarding personalized pricing infers the airlines will be able to support that. Airlines use various revenue management software, and it’s unclear whether any can, or will, link their RM systems to ITA/Google in order to create those personalized fares.

    Where Google could play a role is in inspiration. I’ve been discussing since the early 2000s how a critical mass of leisure travelers do not have a destination in mind when planning a trip, and how half or more leisure travelers will allow their budgets to determine where they go on a trip (so, no new news there, Google). If airlines utilize Google/ITA “open” destination search (e.g., “show me flights to Europe”), pairing a consumer’s Google history with airfare availability may enable more useful results (for a travel agency using Google/ITA, this may also lead to more relevant airline suggestions). The question, as always, is where that ethereal, constantly shifting line lies between “cool” and “creepy” in terms of using a person’s Google history/data for functionality such as this.

     
    • Chicke Fitzgerald

      Totally agree Henry on the creepy part!

      The vacation traveler is still just a small part of the total traveler base in this country, so once again, I’m concerned that the industry is still laser focused on what they know well (vacation at 8% of total overnight trips and business at 25% of travel). The other 67% know where they are going, but it isn’t generally a city center or an airport, which is how the current travel engines, including ITA “think”.

      Until we break through that [oh I hate this word that I am about to use…] paradigm, we can’t maximize the revenue and profit potential in our industry.

       
  3. Bob Cognito

    The one thing that many fail to realize about Google Flight Search in its current iteration is that the true value lies not in its core functionality. Instead, the win is in giving Google the ability to push organic search results below the fold. If you run a search now for flights via Google, the entire first page above the fold will be populated with paid ads. So even if no one clicks on their meta product, just having it on display will increase the likelihood of clicking on a paid ad.

     
  4. Chicke Fitzgerald

    Amazing that Google spent so much on ITA ($700m) and now, 5 years later haven’t monetized that investment. With just 13% of all travel in the US by air, one wonders why they continue to focus on the air traveler with both this product and their hotel offerings. Huh….

     
 
 

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