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, responsibletravel.com 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
Thursday, December 1, 2011