Google revealed Tuesday that it is doing an early experiment in how to sell bundled flights and hotels via its travel search results. Package travel is huge in Europe, and Google's trial will be watched closely.
In the UK and Germany, users of Google’s destination product will see the first experimental sales of flight and hotel packages.
Speaking Tuesday at the first Skift Forum Europe, Oliver Heckmann, a Google vice president of engineering who heads the search engine’s travel product, said the product is still in testing. Heckmann stresses that it’s not just about selling vacation packages.
“It’s a differentiated experience,” said Heckmann. “It is a search tool that lets you buy the individual components separately or together.” Consumers are not only shown bundled options.
It is not the first time a major metasearch platform has attempted to sell packages, per se. Kayak.com/packages, and one of Kayak’s acquisitions (Sidestep), tried it first. Kayak says it launched package metasearch in Europe in 2012 and expanded it to the U.S. in 2014.
But Google says it is the first time a major metasearch platform has attempted “dynamic packaging” in a particular way. Rather than display packages put together by operators and wholesalers, it displays air and hotel combinations pulled together in an automated process. Vendors like Lufthansa Vacations agree to sell the combined products within a restricted database of hotel and flight availability.
The goal is to allow users to decide whether booking a flight and a place to stay separately or together makes “the optimal choice.” In the European market, packages remain a mainstay of travel selling. In the UK, about half of the leisure trips are sold as packages, on average.
So Google is venturing into a potentially lucrative new territory by tapping this dynamic packaging market.
Heckmann told Skift executive editor Dennis Schaal, during an onstage interview today in London, that the “very large scale experiment” adds packages to the options offered in the logistics module of its Destination pages. In this way, Google is targeting the so-called “upper funnel” of the transaction process, allowing users to get a sense of where they might travel based on their budget.
Package rates are being pulled from some major providers, such as Lufthansa Holidays and Air Berlin Holidays. Google is in discussions with TUI as well.
“We are basically going further than dynamic packaging and taking the information we have in our flight cache and our hotel cache and allowing the user to create ultimate combinations,” said Heckmann.
Giorgos Zacharia, CTO, Kayak, says via email that, “While our Peakwork integration exists everywhere, we rarely show dynamically paired packages (e.g. when we spot a flight + hotel combo that will save the user more than $50). Because over the past five years we’ve learned that the savings are often not significant and our users prefer not to do the split booking. The online travel agencies, some of which also dynamically bundle, provide the most savings most of the time, so that’s what we show to our users.”
Given that it is an experiment, only some Google users are seeing the functionality in their results. In a handful of tests in the local markets, Skift didn’t see the results on either mobile or desktop.
Google’s move follows its product launch in Europe of adding relevant intercity rail results between European destinations. It is the first of the major travel metasearch platforms to integrate rail options into search listings in Europe.
That matters because Europe’s geographic density and a heavy investment in its passenger rail infrastructure make such information heavily relevant to consumers, who spent more than $2 billion on intercity rail tickets last year.
This packages experiment is the first time Google has released a product in Europe ahead of other markets.
UPDATED: Article was amended to clarify the difference between traditional and dynamically generated packages, to note Kayak had offered package metasearch first, and to add a quote from Kayak.
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Photo Credit: Google Travel's VP of Engineering Oliver Heckman speaking with Skift's Dennis Schaal (R) at Skift Forum Europe in London on April 4, 2017. Russell Harper / Skift