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Departing From a Search Bar Near You

  |  January 28, 2014   |  Comments   |  

A look at how Google Flight Search would impact the travel sector.

Anyone who has heard of Michael O’Leary, chief executive of low-cost airline Ryanair, will surely be aware of his pugnacious style and somewhat unorthodox approach to public relations. One of his classics was to suggest that he was going to charge his passengers to go to the toilet in-flight. Unusual perhaps, but he’s a savvy businessman and what he and Ryanair do is watched carefully by the rest of the travel industry.

He recently let slip a planned partnership with Google where Ryanair would provide detailed flight availability and pricing information to Google that would then appear in Google’s search results. He has since confirmed the deal with Google Flight Search, which is now available for customers in Britain and several other countries, including the U.S. For example, typing "London to Paris next Tuesday" into the search bar might respond with a range of flights and fares that can be booked directly from the airline with a single click through to their booking site. O’Leary claims that Ryanair is not paying for any of this, thus it becomes a free form of distribution for them and in exchange they provide Google with detailed data that the Google engine consumes as it self-learns and grows.

As more airlines either wish or are perhaps forced through competitive pressure to join this model, Google starts to become the one-stop shop for any flight purchases. Perhaps replacing more traditional online travel offerings from online travel agents (OTAs) such as Travelocity or aggregators such as Skyscanner.

This new role for the search engine potentially has profound impact for many people.

For Consumers

  • Consumers can only benefit from easier, faster, and better access to flights and fares and one would assume we’re likely to get access to better deals.
  • If, like me, you struggle with the minutiae of a typical airline booking engine, Google’s intuitive and more predictive searches will hopefully entertain queries like "I fancy a trip to Tokyo." The golden rule of selling anything on line is to make it as easy as possible.

For Airlines

  • It’s fairly typical that a game-changing low-cost carrier is first to the punch here, but no one can afford to be left behind and they’ll all need to climb aboard.
  • In the short term, airlines will likely lower their distribution costs by bypassing more expensive OTAs, but we may find that short lived.
  • While Google does not appear to be charging for this, for now, that might well change and you can be sure that the airlines will be jostling for the best ranking and page positions. Hello paid search.
  • What it’ll also do is allow the airlines to better dispose of last-minute and distressed fares by getting them associated with a whole range of search terms.
  • The suggestive selling opportunities from a smart search engine are limitless. "I’m bored" coupled with known destination interests and weather data might return all sorts of attractive short breaks and fares, just a click away and all incremental sales.

For OTAs and Aggregators

  • For the likes of Skyscanners and Travelocity, this does not look good. It’s possible that Goggle might just have their lunch. They’ll need to think about their business model and how they enhance their consumer propositions to compete with this.

For Google

  • There’s the obvious search revenue that comes from having such a precise target; these may be airlines bidding themselves up the page or hotels or other travel providers keen to get in front of that target consumer.
  • The bigger picture for Google is that they become an even more indispensable part of their consumers’ lives. Adding travel sourcing to that growing list of activities that we now do, and take for granted, from the search bar.
  • And Google gets a huge volume of travel data, which it then uses to build new algorithms and models that help the engine to enhance its proposition.

This last point is important. Buried deep in IATA (a trade body to which most of the world’s major airlines belong) is a project called New Distribution Capability. This is a new set of standards and protocols that would allow airlines to offer up personalized fares to different individuals. Add this to the detailed profile Google has for even an anonymous user and we have a formidable double act. Google sends the airline a profile and the airline picks and chooses the fares it wants to promote. There’s a wider debate on the merits, or otherwise, of such personalized pricing, but regardless of how you feel, it’s something that’s very probably here to stay.

The ability for Google to simply and quickly feed a profile and for the airline to offer custom pricing and propositions arguably negates the need for airlines to have a relationship with their own customers. We’re probably not seeing the end of the frequent flyer program just yet. But one of the greatest benefits of such programs is to provide detailed insights on the behavior of their customers. If Google can present a compelling digital profile of a consumer, the frequent flyer program will need to evolve and change to remain a key tool in customer management.

You can be sure that the airlines are just the start. There are plenty of other travel and non-travel providers that would benefit from being able to serve up complex spot pricing and availability this way. Hotels, car rentals, theater tickets, perhaps, and many more will follow. Imagine typing "take me to New York for the weekend" and in an instant, Google has provided an airfare, a hotel room rate, some discount theater tickets, and a restaurant deal -- I’m as good as packed.

Bon voyage.

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ABOUT THE AUTHOR

Stephen Hay

Stephen Hay is Asia Pacific regional director for ICLP, the award-winning global loyalty and customer relationship management (CRM) agency. Stephen came into loyalty at Cathay Pacific when e-mail was still something that people in research labs used to send to each other and direct mail was still king.

ICLP works with some of the world's leading customer-focused brands, including Cathay Pacific, Mandarin Oriental, and Juniper Networks; looking to bring brands and customers closer together into a more mutually beneficial and more profitable relationship. Stephen takes a customer point of view on almost everything, not always universally popular, but proven time and again to be the basis for a sustainable, profitable, long-term relationship.

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