The ultimate aggregator – Google, travel & mobile

In my post, Adwords, vertical search and aggregator ‘middle men’ I mentioned a simple search enhancement that could enable hoteliers to better compete with the aggregators (e.g. Expedia, Travelocity, Booking.com). When a user searches using the keyword “hotel” or “hotels” some simple filters such as room type or budget would be shown. Advertisers would be able to bid against keyword/s and filter value/s. This got me thinking about what else Google (or Microsoft) could do for the travel vertical and how the growth in mobile might precipitate this.

Google recently purchased ITA Software a provider of Flight information. This potentially enables Google to show enhance search results with lists of flights and prices for various carriers and routes. Google could piggy back Adwords adverts on the side of this; or they go further and offer advertisers the ability to advertise against specific carriers and routes. Could they do something similar for accommodation?

Google becomes an accommodation aggregator?

Google could themselves become an accommodation aggregator. Google Base or Google Places could be extended for hotels to take rates, rooms and availability information. The results of a hotel related search would be a list of hotels rather than the normal list of hotel related websites. The usual filters you see on an aggregator site would be available – including travel dates. Near each hotel result there’d be paid (Cost Per Click) links to (multiple) websites where a room in the hotel can be booked.

For users this seems like an improvement, cutting out a step and helping them compare prices from aggregators and perhaps the direct from the hotel itself. This is the most obvious move but unfortunately for the user this is perhaps also the the most unlikely.

Technically whilst this should be pretty straightforward, certainly for a company with Google’s resources, in reality it involves integrating lots of 3rd party systems and information. Room availability and pricing is ideally real-time information. Will 3rd party systems be fast enough for super speedy Google? Will they be reliable enough. Google sets the bar pretty high. What if the information becomes stale? The user finds a supplier of a particular hotel and room for £120, clicks through to discover it’s now £150 or worse no longer available. Still you could still make the case that this is better, certainly no worse for the user than the status quo.

The biggest problem is what would the aggregators make of this? Aggregators are very big spenders on Google Adwords and unlikely to voluntarily play ball on this. Getting the aggregators to put the effort into such technical integration is unlikely given they would probably stand to lose the most, at least in the short term

Currently, the name of the game is getting a big enough return per click to afford to appear in the key first few result that drive the vast majority of referral volume. The aggregators achieve this by aggregating lots of supply => lots of choice (see my previous post).

Hoteliers benefit from vertical search

Could Google circumvent the aggregators? Hoteliers could benefit hugely from such a vertical search. Their relevancy to any paid click would be tremendous, they’d be very likely to convert the click into a booking and achieve a good return on their click. Perhaps this is where Google Places is headed, adding real-time vertical specific information: rooms, rates and availability. Google could even become the preferred tool for independent hoteliers to manage their rates, availability and bookings. Perhaps Google wouldn’t want to be involved in the actual financial transaction, there are potentially numerous legal, regulatory and customer service problems (Google Checkout prohibits use for travel purchases). However, this wouldn’t stop Google offering a API through which a hoteliers website could instantly store booking information in Google’s systems or simply update their room inventory.

Holiday (vacation) lets

What about holiday (vacation) lets, villas and cottages? Google might see significant take up in this sector as it is more fragmented than hotels and technically simpler. Holiday properties are typically owned by private individuals rather than the “holiday companies” who market them. The holiday companies act as aggregators, offering advertising, calendar management and in some cases full booking service. Google could potentially offer some of these services: a simple advertising solution, calendar management and itinerary update. This is a ripe market, with plenty of opportunity for a technical innovator to come in and attack the cost base and effectiveness of the holiday companies’ traditional marketing and customer services models, both property owners and consumers would ultimately welcome this.

The mobile search problem and aggregator apps

Searching for a hotel via Google Search is painful on mobile. Often the sites listed are not designed for mobile, though no doubt in time most sites will have mobile versions. Personally I find clicking back and forth between Google Search and the sites listed far more clunky on mobile. I wonder if mobile users will adopt a preferred aggregator and stick with the aggregator’s mobile app. In time this could represent a very significant drop in Google’s ad revenue.

Google could avoid such a drift to aggregators’ mobile apps by more aggressively pursuing vertical searches on Google Mobile Search. Vertical search could reduce the steps necessary to find accommodation, pulling more of the steps into Google Search and enabling the user to enter a hotelier or an aggregator’s site at a later step in the selection and booking process.

In exchange for offering the user more relevant content, Google would be able to better understand what the user is looking for. Knowing more about the user’s goal and preferences opens up other opportunities. Having additional information about the user’s goals also enables Google to intelligently cross-link to relevant flights, cars, restaurants etc... More relevance leads to more clicks.

It’ll be interesting to watch and see, if and where Google Search, Places, Base and Adwords meet. Will aggregators’ mobile apps dent adwords revenue? Will mobile provide an impetus for vertical search? Interesting times.

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