What to expect with Google's new positioning in travel?
Launched earlier in May, Google Trips puts merges flights, hotels, packages, home-rentals, car rentals, ridesharing, cruises, and experiences search in one single, übermensch ecosystem, combining the Google Trips app, Google Flights, and Google Hotels under one landing page. And, with Google getting bigger on the travel landscape, OTAs continue diversifying the risks: Booking.com (with Q1-2019 revenue down by 3%, don't forget), especially, alluded to new possible acquisition and it is rumored to announce its new stand-alone tours & attractions program any day now. My long-view on the topic is that Google is going to cover the whole traveler's journey, while OTAs will move more and more to B2B, possibly even SaaS, landscapes. How will these changes impact hotels? What's your take?
Chaired Professor of Digital Disruption at ESSEC Business School
While Google may be positioning itself more prominently throughout the customer journey, it will NEVER enter into direct competition with the OTAs. Why would it when it can make massive profits simply by referring traffic rather than deal with the messy challenge of facilitating travel transactions?
OTAs and suppliers are increasingly having to deal with this new reality and adjust their business model to cope. Already companies like Airbnb charge higher transaction fees on business sourced through paid search marketing. As increased volumes of business flow through Google's superior user interface, others will be forced to follow, or alternatively invest in building a brand and customer loyalty to get future customers to book directly.
Either way the future looks expensive!