Published on Thursday, December 1, 2011

Industry warned of Google flight threat

Google's new Flight Search and Hotel Finder facilities pose a far bigger threat to the online travel market than group voucher sites.

Speaking at the TravelMole Industry Question Time in London last night, chief executive Justin Francis warned the new functions, which include a booking facility for the flights, could spark a new price war.

He added while the flight function has only been available for a few months and is yet to have many American airlines signed up to it, it is already the seventh biggest flight booking website in the US.

He added: “It is going to create a massive downward pressure on price if you commoditise product.

“Power is changing to the customer, if you're not the cheapest or the best the customer will find out incredibly quickly as they've got the information to do that

“Google suddenly looks like competition to its big online travel partners rather than a partner; they're feeling threatened by it and they're right to feel threatened by it.”

Guy Beresiner, head of partnerships for Yahoo, agreed Google Flight Search is in a strong position so long as it can compete on price, as the technology driving it, which includes real-time availability, means little to consumers.

He said: “It is successful because of the recession, people are searching more carefully as they need to find the cheapest option

“As long as Google can't search every flight people will start searching around to have more of a journey before they commit.

“Google may be fast but that doesn't mean they'll convert any more volume.”

However, Antony Martin, managing director of Rock Insurance, said he believes the impact of Google's new travel offerings is overestimated.

He added: “I don't think it's as big a threat as people make out. Just because Google is advertising holidays, do you think your customers will book with them? I don't agree with that.”

Whatever the threat of Google, the speakers all agreed group discount sites such as Living Social and Groupon posed a minimal threat to the industry.

Martin said the sites would only work for companies with large amounts of stock to clear while most agents would be unable to afford a discount of up to 30%, which is often required by the sites.

Nick Henley, media and planning director for Conrad Advertising, added: “The kind of customer you attract is not the kind to stay around if it's cheaper elsewhere.”

by Ed Robertson

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  • Not a threat - A complement

    This is threat to the travel industry if not embraced. It will benefit the consumer and increase the airline's visibility to the direct market, therefore introducing fierce competition, which in turn will bring prices down. The days of the agent are numbered purely because the customers book directly and the agent is not seen as an expert any more, but as a someone who benefits for not doing much work, unfortunately for the agent. The only way for agents to stay afloat is if they embraced this new model and started using flight price comparison sites and charged the customers a search fee instead of huge commissions. Tony Minides Travel Data Systems

    By Tony Minides, Thursday, December 1, 2011

  • Flight search is just the tip of the iceberg.

    I covered this on my own message board a few days ago. I headed the piece will Google be T.Cook"s nemesis? What you see on Google at the moment is only the tip of the iceberg. Google is planning to become an OTA (Online Travel Agency), their current flight search is only available in the U.S. But they plan shortly to roll this out into Europe. It is only then a small step to becoming a full blown travel agent offering accommodation, hotels, car hire, travel insurance and all inclusive package holidays. It is also the easiest thing for them to offer their direct services to every holiday service provider in the world with their own web site. They already have them in their databases! What is more over 80% of people who access the world wide web via the internet do so through a search engine. If you think about it this is a logical move for Google. A travel agent sources, offers and "searches" for holidays, flights and accommodation. Then sells it to the public who walk through their front doors. And what is Google? It"s a search facility and they are very good at it. The technology, infrastructure and facilities are already in place. I know the High Street travel agent claim they offer a good and experienced service to their clients. But increasingly the public are turning their back on this special personal service and seeking cheaper alternatives and wider choices online. Which if you think about it is a lifestyle choice. Often I personally cannot be bothered to face the traffic, pay for parking the car (if you can find anywhere to park) then struggle through to the shops and sit and wait in a queue or be bombarded and confused by so many choices most of which the nice person talking to you has no idea about the location and surrounding area. Much better to sit at home with a cuppa and surf the net to research the areas which interest you. It"s exciting, you can see the area, get to know the local people, and email them with no rush, no pressure, no problem parking the car or petrol bills. Ergo no stress. It also adds to the excitement with anticipation of the holiday. I don"t suppose travel agents reading this have looked at things from this perspective. Scared? You should be. Many independent travel agents web sites I look at are woefully inadequate. So then what price T.Cook"s shares now then??!

    By Paul Davis, Thursday, December 1, 2011

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