Tuesday, 11 October 2011

Google Tightens the Screw on OTA’s: How Can They Fight back?


By Marco Saio, Global Director Of Research, EyeforTravel

Google’s recent spate of new product launches and acquisitions has undoubtedly raised many an eyebrow and pulse amongst travel’s old guard intermediaries this summer. Most concerning is the incredible functionality, transparency and ease-of-use of Google’s Hotel Finder and Flight Search which enable users to refine, sort and compare travel searches like never before.

Google’s intentions toward the online travel vertical were made plain after its $700 Million acquisition of ITA Software, giving Google unprecedented access to flight data and advanced search technology which was swiftly put to use.

A recent Experian Hitwise travel search study revealed that neither of Google’s search products have broken into the top 50 highest traffic travel websites in the U.S since launching this summer. The top 10 paints a very rosy picture for OTA’s and meta-search engines, but how long before we see a significant re-shuffle?

Rank
Website
Domain
Percentage of Visits
Previous Position
1
Expedia
www.expedia.com
12.54%
1
2
priceline.com
www.priceline.com
10.11%
2
3
Orbitz
www.orbitz.com
7.41%
3
4
Travelocity
www.travelocity.com
6.35%
5
5
CheapOair
www.cheapoair.com
5.61%
7
6
Hotwire
www.hotwire.com
5.19%
6
7
Yahoo! Travel
travel.yahoo.com
5.07%
4
8
Bing Travel
www.bing.com/travel
4.14%
-
9
Kayak
www.kayak.com
4.01%

 Google Flight Search came in at # 391.

 At a recent EyeforTravel summit Google’s head of Travel claimed that no OTA’s were deliberately ignored, but it’s easy to see how both search products stand to create a lucrative OTA advertising platform for Google in which the highest  bidder will likely secure the consumer.

 So what can OTA’s do to hold their ground and protect market share?

1.       Pump more money into their brand.com marketing campaigns, entrench their brand and services with customers to cement loyalty and increase switching costs. See Expedia’s current multi-million $ TV advertising campaign across Europe.
2.       Invest more in technology to drive greater speed of search, price transparency and enhanced user experience use to attract, delight and retain loyal customers. See Hipmunk’s inspired  flight search by ‘agony/ecstasy’ or Hotel Tonight for its beautifully simple booking system.
3.        Focus more on great value package deals and loyalty reward schemes to satisfy today’s time starved, budget conscious and hyper-savvy traveller – Areas where both Google’s products cannot compete… Yet.
4.       Forge strategic partnerships and alliances with suppliers à la Air Asia – Expedia tie-up .Co-opting in this manner enables rivals to join forces and competencies to create a long-term competitive advantage.
5.       Enter the social/flash buying melée to give existing customers greater value and ‘win’ (read bribe) new customers. Prime examples of this are the Expedia-Groupon Getaways and Priceline’s recent Tonight-Only Deals . However with both Google Offers and Facebook deals in Beta, the race for mindshare and adoption is on.

Interestingly, following on from Google’s acquisition on Zagat, Kayak today announced a partnership with Frommer’s and Budget Travel in which user reviews and comments are aggregated and displayed alongside search results.

All these parries and counters clearly demonstrate how high Google has raised the stakes in the travel search game, and how seriously intermediaries are taking the threat to their long uncontested business models. Who will win out in the battle for mind and market share?

1 comment:

  1. more on Kayak's new filter system here: http://www.hotelmarketing.com/index.php/content/article/kayak_adds_new_hotel_filter/

    ReplyDelete