Google Travel Poses Major Threat to Online Travel Agencies
When you think of the top travel sites, you likely imagine companies like Expedia, Orbitz, and Kayak.com, which have long been used by travellers looking to book airline tickets, make hotel reservations, rent cars, and more. However, in recent months Google has entered the travel industry in a much more significant way with the launch of Google Travel, a service that leverages the company’s vast network of information to compete directly with Expedia and the like. Google, however, has a distinct advantage over other travel companies by virtue of the fact that it provides by far the most popular search engine in the world, accounting for 81.5% of all search engine traffic on the Internet. As people generally use search engines to find information to help them plan their travels, this fact gives Google a distinct advantage over rival companies, posing a potentially-existential threat to their businesses.
Google Flights, is a service that allows people to search various airlines to facilitate the purchase of tickets through third-party suppliers, launched eight years ago in September 2011. This year, however, the company expanded their ambition in the travel industry by combining Google Flights with services allowing users to search for hotels and vacation packages with the May launch of Google Travels. What’s more, Google Travels also offers travel guides for locations around the world, presenting users with suggestions on things to do, recommended day plans, travel videos, and more. While rival services include similar functionality, Google Travel’s attractive, minimalist aesthetic is more likely to engage users, particularly those who are already entrenched in the Google ecosystem. As Google Travels integrates with other services like Google Maps and Android, it can offer customers a more streamlined, straightforward, and comprehensive approach to organizing information relating to travel.
Google’s efforts to rise to the top of the travel industry have directly resulted in shrinking traffic from Google to websites like Expedia and TripAdvisor, causing them to grow at a worryingly slow pace.
Crucially, however, Google also prioritizes search results relating to its own business over competitors. As such, when you search for the word “flight,” for example, the first result links to Google Flights, with competing services found lower on the list of results. As people most often click one of the top three links that appear in the results of a Google search, customers are naturally drawn to choosing Google’s services over their competitors, even in cases where competitors might offer a better option. Understandably, this has led to complaints from competing services, who blame the search giant for revenue slowdowns, as top travel companies struggle to figure out how to maintain dominance when faced with such a powerful competitor. Google’s entry into the business of travel coordination, and its practice of promoting its own services through its massive search engine, stings particularly because travel companies pay Google billions of dollars in advertising money to prioritize links to their websites in search results.
Google’s efforts to rise to the top of the travel industry have directly resulted in shrinking traffic from Google to websites like Expedia and TripAdvisor, causing them to grow at a worryingly slow pace. According to Stephen McBride, writing for Forbes, Google earned around $18 billion from online travel agents that paid for advertising on their search engine last year, whereas the largest online travel agent, Booking.com, only earned $14.5 billion. To make matters worse, Google is charging these companies an increasing amount of money to appear near the top of search results as time goes on, further compounding their financial difficulties. However, as these companies’ advertising purchases are tremendously profitable for the search engine giant, Google is unlikely to deliberately drive them out of business, even though they could potentially do so with ease. As such, the company has developed a strange type of relationship with online travel agencies; though Google directly competes with them by offering the same services, their existence also helps them make money, meaning the massively powerful Google is incentivized to keep rival travel agencies in business while simultaneously cutting deeply into their profits. As a massively profitable technology company, Google is evidently finding it increasingly difficult to live up to their own standard of “don’t be evil,” which was once incorporated into its corporate code of conduct before being removed.
Tyler Olhorst is a Contributing Editor at The National Digest based in New York. You can reach him at inquiries@thenationaldigest.com.