Google – ITA's Moment of Truth
Author: Carroll Rheem
Published: September 15, 2011
When Google announced its intention to acquire ITA Software in July 2010, most travel industry players knew – whether or not they wanted to admit it – that change was in the air.
The announcement may have been tied to a company highly specialized in one product and geography, but it signified a tipping point in Google's ever-expanding reach into the travel vertical (i.e., Places, Maps, user reviews and hotel price listings).
There were many unknowns left in the equation, however. The most important one was if Google would remain content to act merely as a hub for traffic referral, or if it would aim to usurp the decision-support functions currently provided by major travel websites like OTAs and metasearch engines. Would even the world's most powerful search giant dare try to yank the consumer moment of truth from the virtual shelves of some of its biggest customers? With the launch of Google Flight Search on Sept. 13, it is clear the answer is yes.
Whether or not they expected Google to throw down the gauntlet, many did not want to believe that it could build a better flight search experience. Perhaps lulled into a false sense of security by Google's previous mediocre attempts at vertical specialization, some travel executives clung to the hopes that the ITA software acquisition would not amount to much. Unfortunately for them, it has – there's a new shelf in town.
Right out of the gate, Google's Flight Search does not disappoint. It boasts the hallmarks of the Google experience – near supernatural speed and a clinically clean interface. An additional wallop comes in the form of an interactive map that introduces an element most consumers have never seen – instant pricing to a range of destinations. More complex elements like text-based search (such as Jeff Huber's example of "flights to somewhere sunny for under $500 in May") do not yet yield results, but the current iteration is, of course, just the beginning. Whatever details critics can nitpick about the user experience, it would be shortsighted to think that Google could not address them – they clearly have the tools and the talent.
But however sleek the exterior is, the real test lies in what's under the hood. At launch, the inner workings understandably have a lot of holes. Nevertheless, even if (or when) availability, airline partner breadth and deep-link kinks are worked out, it is still missing a very big part of the online booking landscape – online travel agencies. In a blog post, Google engineering director Kourosh Gharachorloo wrote, "Airlines control how their flights are marketed, so as with other flight search providers, our booking links point to airline websites only."
In effect, Google appears to have allowed airlines to place a colossal handicap on its own product, which ultimately defies its self-proclaimed mission to "organize the world's information and make it universally accessible and useful." Are OTAs not part of the world?
From a completely unique position on the sidelines, Google had the opportunity to create a pristine, agnostic marketplace unmatchable in its breadth. Instead, it has disconnected its flight search from the most popular consumer booking channel for flights1, letting airlines dictate the rules. However, Google plans to build advertising products that OTAs, metasearch engines and other partners can buy into. OTA booking capabilities may not be welcome, but their advertising dollars certainly are.
Nevertheless, being excluded may be a blessing in disguise for OTAs. Incomplete information is a substantial flaw for a search product and instead of battling each other for placement (and spending even more money with Google), they can channel their energy on improving their search products to compete. It would be unrealistic to think OTAs won't be affected, but also unrealistic to believe they will be supplanted. While the effectiveness of Google Flight Search is in the eye of the beholder, one thing is clear: it will disrupt the air travel marketplace. The product itself is only one element of it. The innovation it spurs in everyone else will be another – perhaps even more impactful – consequence. If only for that reason, the travel industry is better for it.
1 PhoCusWright's Consumer Travel Report Third Edition