Google’s latest move a serious threat to Travel Intermediaries

 

Google has announced its purchase of a specialist aggregator of airline flight information, ITA Software, in a venture into travel, making it easier for users of its search functions to find quick information about convenient flights and airfares. Although Google has stressed it has no plans for a direct move into selling travel services to the public, Andreas Pouros, Chief Operating Officer at Greenlight, a UK-based independent search marketing agency, says "travel intermediaries should be very concerned as Google moves towards becoming central to consumers' travel purchasing behaviour. It is only a little over seven months ago since Google made a similar move with property intermediaries."

London, 5 July, 2010 - In its early years the Internet was heralded as the great disintermediator - removing the need for middle-men across the entire spectrum of commercial affairs, and allowing manufacturers and suppliers to have direct interaction with their customer bases - present and future. This was Phase 1. It was rapid. There was a dramatic increase in market transparency that allowed people to see prices and products from multiple suppliers, allowing them to price compare, become more discerning consumers and buy direct from the producer/supplier of the product/service. The internet however grew to a size that meant the consumer wasn't getting the maximum market transparency that was possible; with thousands of sites selling a product/service, how could someone determine whether they were getting the best price?

This ushered in Phase 2, new companies with innovative technologies entering the fray to provide a new level of market transparency. Sites like Travelsupermarket and Kayak, aggregating data, and essentially reintermediating the supply chain. During this time search engines have become increasingly central to the consumer's online experience, with most consumer internet sessions beginning at one of the three major search engines.

If the likes of Travelsupermarket have good technologies, the likes of Google have incredible technologies, allowing them to usher in what appears to be Phase 3 in this history of intermediation. Being so central to people's online experiences and having so much great technology (and money) has allowed Google to become the ultimate informational intermediary, essentially reintermediating an already reintermediated supply chain!

Travel Intermediaries should be very concerned, as Google moves towards becoming central to consumers' travel purchasing behaviour. All Phase 2 intermediaries should now be rethinking their business models in light of this move and at the very least determining how they should operate in the next few years.

 

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